An environmental hazard insurer for bankrupt Molycorp Minerals LLC's California mine has offered the company an up to $5 million, short-term bankruptcy loan, easing pressure on the trustee to seek liquidation or drop out of Chapter 11, court documents filed in Delaware on Wednesday show.

Paul E. Harner, Chapter 11 trustee for the company and its 19,000-acre Mountain Pass mine in San Bernardino County, California, said the loan represents the only current option for keeping the case alive during an attempted marketing and sale of the facility.

Rare earth processing company Molycorp Inc. spun the mine and related assets off into a separate Chapter 11 earlier this year, after winning confirmation for a plan that restructured a $1.8 billion debt and separated the mine from a group of surviving, reorganized processing companies.

The mine trustee is represented by Matthew G. Summers, Tobey M. Daluz, Leslie Heilman, and Vincent J. Marriott III of Ballard Spahr LLP.