Molycorp (NYSE: MCP) is starting to make moves beyond the mining of rare-earth elements; it's investing in a wind turbine company. Molycorp is contributing to a $35 million capital raise by Boulder Wind Power.

The move is a bit curious because it's such a far departure from the company's traditional mining business. The company has made moves into metal makers who use rare-earth elements to expand its business recently. Earlier this year the company purchased Santoku America, a producer of high-purity rare-earth alloys used in magnets, and also took a large stake in AS Silmet.

But Boulder Wind Power's business is building a rare-earth-magnet-powered wind turbine generator that doesn't use the rare dysprosium. Not exactly core to Molycorp's business or a logical extension of Molycorp's business. Not that it won't be a good investment, if indeed the company can help produce wind power at $0.04 per kW-hour, as it claims.

More than just minerals
It is nice to see Molycorp use its cash flow and high stock price to expand the business. This is the kind of flexibility competitors like Rare Element Resources (AMEX: REE) and Avalon Rare Metals (AMEX: AVL) don't yet have. They haven't generated the cash flow Molycorp has from rare-earth mining.

This is what makes Molycorp the best stock in the rare-earth element industry, but I still have my doubts long term. Capacity is coming online at a rapid rate over the next few years, insiders are selling, and companies are looking for alternatives to using rare-earth elements. Prices for some rare-earth elements have started falling since Lynas Corp. began production; the next 12 months will tell us if that trend continues.

Which way do you think rare-earth element prices are headed? Leave your thoughts in our comments section below.

To keep up with all of the happenings at Molycorp, click here to add it to My Watchlist, and My Watchlist will find all of our Foolish analysis on the stock.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.