MP Materials Q1 2025 Earnings Report

MP Materials EPS Results

• Actual EPS: -$0.12
• Consensus EPS: -$0.10
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: -$0.04

MP Materials Revenue Results

• Actual Revenue: $60.81 million
• Expected Revenue: $64.74 million
• Beat/Miss: Missed by -$3.93 million
• YoY Revenue Growth: +24.90%

MP Materials Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 5:00PM ET

MP Materials (NYSE:MP) is a company that has rapidly become a leading provider of rare earth materials. These materials are essential to numerous industries, including electric vehicles, wind turbines, and consumer electronics. With its headquarters in Las Vegas, Nevada, MP Materials Corp. operates the only rare earth mining and processing site in North America, in Mountain Pass, California.

The company was founded in 2017 as a special purpose acquisition company and merged with MP Materials, which acquired the Mountain Pass site from the bankruptcy of Molycorp. Since the merger, the company has successfully increased production levels. In 2020, it went public through a SPAC merger with Fortress Value Acquisition Corp, now trading on the NYSE under the ticker MP.

MP Materials' management team is led by Chief Executive Officer James Litinsky, who has over two decades of experience in the financial industry. James Litinsky is a former hedge fund manager with a restructuring and value investing background. He previously worked as a hedge fund manager at JHL Capital Group and recently served as the CEO of commercial real estate company CIVANA.

As for financial performance, MP Materials has consistently grown over the past few years. In 2022, the company generated $527 million in revenue, up from $67 million in 2018. The company also reported a net income of $289 million in 2022, compared to a net loss of $34 million in 2019. The company's gross margin increased from 6% in 2018 to 82% in 2022, reflecting the company's successful cost management strategies. In comparison, the sector media gross margin is about 30%. MP Materials has also worked hard to reduce its debt levels, primarily incurred through acquiring the Mountain Pass site.

Regarding valuation, MP Materials' stock is currently trading at a price-to-earnings ratio higher than the industry average and a price-to-book lower than the industry average, indicating that the company's shares are relatively undervalued compared to its peers. The company's stock has been volatile since going public in 2020. In the first few months of trading, the stock price increased by over 300%, driven by investor enthusiasm for rare earth materials and the company's position as North America's only rare earth mining and processing site. However, the stock has since experienced significant price fluctuations, reflecting the volatility of the broader stock market.

MP Materials operates in the broader rare earth materials industry, heavily influenced by global supply and demand trends. The industry is dominated by Chinese companies, which control over 80% of the worldwide supply of rare earth materials. However, in recent years, there has been a growing demand for alternative sources of rare earth materials, particularly in the United States and Europe. This has created opportunities for companies like MP Materials to expand their market share and capture a more significant portion of the industry's growth potential.

The rare earth materials industry has recently faced regulatory and political challenges, particularly concerning trade tensions between the United States and China. In 2019, China threatened to limit exports of rare earth materials to the United States, which would have had significant implications for the U.S. economy and national security. However, in response, the U.S. government has encouraged domestic production of rare earth materials and reduced reliance on foreign sources. This has created a favorable regulatory environment for companies like MP Materials, which are positioned to benefit from increased government support and investment in the industry.

MP Materials has identified several growth opportunities in the rare earth materials industry. One potential avenue for growth is developing new products and applications for rare earth materials. The company has already developed a proprietary process for extracting rare earth materials from waste streams, which could have significant environmental and economic benefits. MP Materials is also exploring opportunities to expand its production capacity and enter new markets, particularly in the Asia-Pacific region.

Despite these opportunities, MP Materials faces several risks and challenges. The company relies heavily on demand for rare earth materials, which can fluctuate significantly based on global economic conditions and geopolitical tensions. Additionally, the company's reliance on a single mining and processing site in Mountain Pass, California, exposes it to operational risks and potential disruptions.

Furthermore, MP Materials faces competition from established companies in the rare earth materials industry and new entrants seeking to capture a share of the market's growth potential. The company must continue to innovate and differentiate itself to maintain its competitive position in the industry.

MP Materials Q1 2025 Earnings Call Transcript

Key Takeaways

• Rising geopolitical tensions have prompted MP to halt rare earth concentrate shipments to China and accelerate development of a fully‐integrated U.S. rare earth supply chain for economic and national security.
• The materials division delivered record NDPR oxide output of 563 metric tons (up 36% sequentially) alongside second‐highest quarterly REO production, with most separated product sold to non‐Chinese customers.
• In the magnetics division, MP achieved its first on‐spec NDPR metal production and delivered automotive‐grade magnets to General Motors, generating $5.2 million in Q1 revenue and a positive adjusted EBITDA contribution.
• Consolidated revenue rose 25% year-over-year—driven by a 246% surge in NDPR sales—while adjusted EBITDA reached negative $2.7 million amid ramp-up costs; liquidity remains strong with ~$759 million in cash and expected prepayments/tax credits of ~$100 million.
• MP projects NDPR cost of production to decline from ~$60/kg in Q1 to the low $40/kg range at full throughput, aided by fixed‐cost absorption and commissioning of an on‐site chlor-alkali plant.

Presentation

[Operator]

Hello, and welcome to the MP Materials first quarter twenty twenty five earnings call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded. If you have any objections, please disconnect at this time. With that, I would like to turn the call over to Martin Sheehan, head of investor relations.

[Operator]

Mister Sheehan, you may begin.

[Martin Sheehan, SVP, IR at MP Materials]

Thank you, operator, and good afternoon, everyone. Welcome to the MP Materials first quarter twenty twenty five earnings conference call. With me today from MP Materials are Jim Lutinski, founder, chairman, and chief executive officer Michael Rosenthal, Founder and Chief Operating Officer and Ryan Corbett, Chief Financial Officer. As a reminder, today's discussion will contain forward looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation, earnings release and in our SEC filings.

[Martin Sheehan, SVP, IR at MP Materials]

In addition, we have included some non GAAP financial measures in this presentation. Reconciliations to the most directly comparable GAAP financial measures can be found in today's earnings release and the appendix to today's slide presentation. Any reference in our discussion today to EBITDA means adjusted EBITDA and tons means metric tons. Finally, the earnings release and slide presentation are available on our website. With that, I'll turn the call over to Jim.

[Martin Sheehan, SVP, IR at MP Materials]

Jim?

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Thank you, Martin, and good evening, everyone. This past month has been one of the most consequential in our company's history, fast moving, challenging, deeply clarifying, and ultimately energizing. For years, we have warned that the global rare earth supply chain was built on a single point of failure. With China's sweeping tariffs and export restrictions, that geopolitical fault line has now become a commercial reality. Regardless of how trade negotiations evolve from here, the system as it existed is broken, and the rare earth humpty dumpty, so to speak, is not getting put back together.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

What is now abundantly clear is that The United States must urgently accelerate its full scale domestic rare earth magnetic supply chain. This is not just about supply security. It is about the future of national defense with systems like drones, robotics, and other forms of physical AI and is about securing trillions of dollars in downstream enterprise value. The events of the past month are a powerful validation of the strategy we have pursued since founding MP. I know some of you will focus on our decision to halt shipments of rare earth concentrate to China.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

We will speak to the near term implications and take your questions shortly. But let me be clear. We have prepared for this moment since day one. We are now at an inflection point, not just for MP, but for the country. The vulnerabilities in global supply chains are no longer theoretical.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

They are central to United States economic and national security. What we are witnessing is the beginning of a generational industrial realignment. Our vertically integrated model developed with conviction and discipline over years has positioned MP as America's national champion in rare earth magnetics, serving as the natural partner of choice for the country's most consequential manufacturers across automotive, defense technology, consumer products, and beyond. We are confident that our business should grow to many multiples of its current scale, and recent events are accelerating that trajectory. Scaling, of course, will require significant additional capital.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

But here is what has changed. We are now in active discussions with major commercial and government stakeholders who recognize the urgency of this moment and are eager to accelerate our mission. Let me be direct. MP took on a mission that many believed was impossible. We assembled billions of dollars in assets.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

We built a shattered supply chain from the ground up and methodically invested over a billion dollars to bring rare earth refining, metal making, and magnetics back to The United States. Against the odds, we did what others would not or could not do. And as a result, America is in a fundamentally stronger position at such a critical time because of the dedication and vision of the MP team. From here, the equation evolves. We have laid the foundation, but scaling this mission requires moving in lockstep with public and private partners who understand that MP cannot and should not carry the burden of countering mercantilism alone.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Our shareholders have backed a bold vision, and they must be rewarded accordingly. We will deploy capital only where the economics are compelling, the partnerships are strong, and the returns are substantial. And today, the opportunity in front of us has both the scale and momentum to reshape this industry and to deliver transformative value for our shareholders and for the country. Through it all, our principles remain unchanged. We will continue to execute with discipline, protect our balance sheet, and align with partners who share our long term vision.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

In the intermediate term, that means executing flawlessly for General Motors, our foundational customer. I believe this will be remembered as the moment MP Materials began its transformation from a rare earth producer to a national champion and a foundational pillar of American industrial resilience. Let's now turn to Slide four and go over some of the quarter's highlights. Our materials division, made

[James Litinsky, Founder, Chairman & CEO at MP Materials]

up

[James Litinsky, Founder, Chairman & CEO at MP Materials]

of our upstream and midstream operations continued its strong execution with painstaking effort in the first quarter demonstrated in part by record NDPR oxide production of 563 metric tons, a 36% sequential increase from the fourth quarter. In addition, the upstream produced its second highest quarterly production of REO in our eight year history as our upstream 60 ks optimization projects continue to bear fruit with very strong recoveries in the quarter. We also continue to see strong sell through of our midstream production with most of our four sixty four metric tons of NDPR oxide and metal sales continuing into Japan, Korea and to other non Chinese customers. Moving to the Magnetics division, we began initial on spec metal production for GM in the quarter. This is a significant milestone for the company and the country as we believe this is the first NDPR metal production ever done at scale in The United States.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

This also resulted in us recording 5,200,000.0 in revenue and positive adjusted EBITDA for the segment in the quarter. In addition, we provided General Motors with our first automotive grade magnets for them to begin validating. This is another important step for MP as we continue to make ever higher quality magnets on our new product introduction line. There is still a lot of work to do on the commercial production equipment, which is being installed, but we remain on track to deliver commercial production of magnets for GM by year end. These recent achievements also unlocked another $50,000,000 customer prepayment, which was received on April 1.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

With that, let me turn the call over to Ryan to go through the results of the quarter.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Ryan?

[Ryan Corbett, CFO at MP Materials]

Thanks, Jim. Moving to Slide six, our consolidated revenue shown on the left side of the page increased 25% year over year, driven primarily by the 246% increase in NDPR sales volumes, as well as the initial sales of magnet precursor materials in the quarter. Consolidated adjusted EBITDA declined $1,500,000 year over year to negative $2,700,000 The driver of our EBITDA results continues to be the transition to producing separated products such as NDPR oxide, which also has the effect of reducing concentrate sales. Our per unit production costs for separated products are declining, but still temporarily elevated as we continue to optimize our processes and ramp production levels towards our targeted throughput.

[Ryan Corbett, CFO at MP Materials]

I'll have more on this in a moment. Adjusted diluted EPS fell from negative $04 a year ago to negative $0.12 this year, primarily due to higher interest expense from the issuance of our 02/1930 convert, lower interest income as well as higher depreciation from new assets brought into service over the last year. Recall also that first quarter twenty twenty four GAAP EPS was impacted by a $46,300,000 non cash gain associated with the early extinguishment of the majority of our 2026 convertible notes. Turning to Slide seven and the material segment KPIs. On the left side are upstream KPIs and on the right side are the KPIs for the midstream.

[Ryan Corbett, CFO at MP Materials]

On the far left, you can see another very strong quarter of REO production at 12,213 metric tons, up nearly 10% compared to last year's first quarter. This is virtually all driven by stronger recoveries from our upstream 60 ks projects, which Michael will provide some additional detail on shortly. As Jim mentioned, this was our second best quarter of production ever and our best first quarter on record. As we push more of that production through the midstream to make separated products, we have less REO to sell, driving the decline in concentrate sales volumes by nearly a third compared to last year. Realized pricing did recover somewhat from last year and was up slightly from Q4 in line with our expectations.

[Ryan Corbett, CFO at MP Materials]

Moving to the right side of the slide, NDPR production volumes grew 36% sequentially better than our expectations and were up 330% compared to last year. Sales volumes followed the usual roughly one quarter lag in production at four sixty four metric tons. As a reminder, with production volumes still at modest levels and with a longer sales cycle for NDPR metals, the timing of shipments can significantly shift our sales volumes in a given quarterly period. And on the far right of the slide, you can see our realized pricing was in line with our outlook, roughly flat sequentially at $52 a kilogram, which was down 16% from last year when overall market pricing was stronger. Moving to Slide eight, Materials segment revenues increased 14% driven by the 246% increase in NDPR Oxide sales as well as the 12% increase in REO realized pricing, partially offset by the 33% decline in REO sales volumes and the 16% decline in NDPR realized pricing.

[Ryan Corbett, CFO at MP Materials]

Note that because our REO realized pricing is on a much shorter lag versus the market compared to NDPR realized pricing, we had the somewhat unusual situation of a year over year increase in REO realized pricing while experiencing a year over year decline in NDPR pricing. The longer lag in NDPR realized pricing is due in part to a longer sales cycle driven by our metallization efforts in Southeast Asia as well as differing contractual arrangements for NDPR oxide and metal. Year over year segment adjusted EBITDA for the material segment declined from $7,300,000 to $3,800,000 mainly due to the lower sales of REO and the higher sales of NDPR oxide and metal. As I mentioned earlier, our production costs for separated products are temporarily elevated as we continue to ramp production levels towards our targeted throughput. Sequentially, the Materials segment adjusted EBITDA improved due to a $3,200,000 lower inventory reserve in the current quarter compared to the fourth quarter, as well as continued improvement in efficiencies in NDPR production, including improved fixed cost absorption.

[Ryan Corbett, CFO at MP Materials]

Also impacting the comparison was a larger benefit in the fourth quarter from the Section 45X tax credit, which in part resulted from a favorable final rulemaking by the IRS in October of twenty twenty four. And lastly, moving to the right side of the slide, you see that the initial metal production for General Motors resulted in revenue of $5,200,000 in the quarter and adjusted EBITDA of about $05,000,000 We couldn't be more pleased with the dedication, effort and performance of the team at Independence, which Michael will discuss in more detail shortly. Looking at the outlook for our metal production at Independence, you will note that we now carry approximately $75,000,000 of deferred revenues under our current liabilities, which by definition is our present expectation for revenues we will generate over the coming four quarters. So we expect materially improved revenues in Q2, eventually leveling out at roughly $20,000,000 a quarter over the next twelve months. And with that growth should come modestly improved EBITDA margins for the segment.

[Ryan Corbett, CFO at MP Materials]

Before turning to the balance sheet, I wanted to give an update on our current expectations regarding our cost of production for NDPR Oxide. It has been several years since we outlined our high level expectations and with our focus shifting to accelerating all parts of our mid and downstream business, we thought it would be a timely update. Turning to Slide nine, we've broken our NDPR cost of production into the fixed portion of costs in dark blue, as well as the variable portion in light blue. I would note that these are all the costs associated with making NDPR, including upstream mining and beneficiation costs. The bar on the left is where we are currently, slightly north of an average of $60 per kilogram in the first quarter.

[Ryan Corbett, CFO at MP Materials]

This is at below 40% of our target production volumes on average for the quarter. As you can see on the right side, we believe that at normalized production, our target costs would be in the low $40 per kilogram with continued opportunity for improvement. Importantly, note that as we have talked about recently, the overwhelming driver of the decline is expected to be the fixed cost absorption from increasing production. And as we announced in mid April, soon after coming out of the plant shutdown, we are exceeding 50% of our concentrate throughput being refined in the midstream circuits. And of course, we also expect some modest improvements in efficiencies on the variable side once we are consistently running at roughly 1,500 metric tons per quarter.

[Ryan Corbett, CFO at MP Materials]

One potentially material area for further improvement in our cost structure is via commissioning of the on-site chlor alkali facility. We expect the first of three trains of chlor alkali to come online next year, which we believe will be able to drive cost savings inputs, which make up the significant majority of the variable costs we have notionally highlighted on the slide. And based on the track record of the team at Mountain Pass, I am confident they will continue to find ways to improve efficiency in ways they haven't even thought of yet. Lastly, I would point out that taking our initial cost estimates from 2020 and adjusting them for inflation and the significant change in market prices of our two primary variable inputs, hydrochloric acid and caustic soda, which have increased nearly 80% net you to almost exactly our current expected run rate cost structure. While we have consistently noted no material deviations from those initial views, safer inflation, This hopefully provides further clarity on why we have such confidence in being among the low cost producers of NDPR when we achieve our target throughput.

[Ryan Corbett, CFO at MP Materials]

Moving to the balance sheet. I wanted to point out a large increase in receivables in the quarter, which was driven by us achieving the final prepayment milestone and our magnetics division during Q1, while the $50,000,000 of cash was received post quarter on April 1. Regardless, Q1 is always our major working capital consumer as we pay out annual incentive compensation and renew various annual prepaid expenditures such as property and casualty insurance. Further, we have continued to invest in greater safety stock of key inventory items and also continue to increase the level of available inventory of oxide at Tolling Partners as demand for metal from our midstream business grows. Regarding our debt balance, the small remainder of our $20.26 notes were moved to current as they are technically convertible within the next year.

[Ryan Corbett, CFO at MP Materials]

We anticipate paying these notes down with cash on hand. Looking at the $759,000,000 in cash, cash equivalents and short term investments balance as of March 31, as I just noted, we have received an incremental $50,000,000 on April 1 and still expect to receive another approximately $50,000,000 in cash from our 2024 tax credits. Turning to capital expenditures, our spend in the quarter was 30,500,000.0 split approximately equally between the materials and magnetics divisions. We continue to target between 150,000,000 and $175,000,000 for the year for the company, including our heavy rare earth separation project, the chlor alkali recommissioning noted above, as well as the completion of independence. Specifically, with regards to heavy rare earth separations, given the accelerating long term outlook for magnetics, As you know, Mountain Pass, while primarily a light rare earth ore body, as one of the world's largest sources of rare earth content, contains a significant amount of heavy rare earths.

[Ryan Corbett, CFO at MP Materials]

In fact, right now, we have over 200 tons on an REO basis of heavy rare earth concentrate stockpiled from our initial year of separated product production. In partnership with the Department of Defense, we have been executing on a project to separate the contained dysprosium and terbium in this heavies feedstock while designing the plant to also accept third party feedstocks from around the world to further bolster DY and TB production. We expect to bring the facility online next year. And importantly, we have sufficient heavy growth feedstock now and as the plant comes online to enable the rapid scaling of our magnet business. As we look at the expansion of magnetics beyond our initial independence capacity, which Jim mentioned in his opening, we believe MP is best positioned to be the refiner of choice for heavy rich feedstocks, particularly as the rare earth market further decouples from China.

[Ryan Corbett, CFO at MP Materials]

We have already invested significant capital in this effort and the vast majority of remaining spend is reflected in our current outlook for this year's capital expenditures net of government grants receivable. With that, let me turn the call over to Michael to go through our operations in a bit more detail. Michael?

[Michael Rosenthal, Founder and COO at MP Materials]

Thanks, Ryan. The materials segment had a good quarter. Upstream concentrate production was strong with improved recovery, solid grade, and good uptime. As alluded to in our last call, in January, we were hampered by somewhat poor settling and dewatering of concentrate and tailings that impacted throughput and uptime. This was in the range of normal process variability, though the new upstream 60 k assets somewhat compounded the challenge.

[Michael Rosenthal, Founder and COO at MP Materials]

We have since put the issues behind us. Throughout the quarter, we made further progress in those two previously commissioned upstream 60 k circuits. For the quarter as a whole, both generated positive impact. About 30% of our feed is now passing through the first of these assets, which is generating 65% final grade and high recovery in one pass. The cyclone and screening circuit, the newer of the two, has also largely stabilized and is contributing to improved recovery as well.

[Michael Rosenthal, Founder and COO at MP Materials]

Over time, we expect a significant narrowing of our grind distribution, and this will contribute to further improvements in mineral recovery and grade. We are working with the vendor of the screens to incorporate screening materials better suited to the fact that our concentrator operates on nearly 100% recycled water. The midstream circuits made significant progress in the quarter. I am pleased that we were able to sustain stronger uptime while increasing throughput. We did have a couple of short, though untimely, unplanned maintenance interruptions in two primary circuits that impacted our overall midstream production.

[Michael Rosenthal, Founder and COO at MP Materials]

As we progress through our ramp, we expect these types of events to continue, though hopefully to moderate in their impact and become less frequent. We experienced a similar pattern of issues during the ramp of our upstream business in 2018 through 2019 on the way to achieving 93% or greater uptime and above nameplate throughput every year since. During the quarter, we achieved more stable roasting performance and improved NDPR yield in leach. We see incremental improvement in q two to date. We also implemented adjustments in purification and separation that have begun to help leverage reagent usage per unit of production.

[Michael Rosenthal, Founder and COO at MP Materials]

These gains will become more evident in q two and beyond. Mechanical issues in product finishing have been a pain point. I will provide more detail in a moment, but we are expecting this to mitigate as we progress through 2025. At our Independence Magnetics facility, progress has been outstanding. As Jim mentioned, we began full commercial production of metal and expanded our production capability.

[Michael Rosenthal, Founder and COO at MP Materials]

We achieved extended periods of strong production with very high quality. Our teams continue to gain experience in operations and troubleshooting with further progress expected in production yield and conversion rate. The full scale strip casting equipment is running an increasing number of trial melts. Aided by developments in our prototype facility, we are working to improve flake quality and microstructure in advance of additional full scale equipment installation. In addition, our sintering furnaces to support the 1,000 metric ton initial capacity are now installed, commissioned, and running test blocks.

[Michael Rosenthal, Founder and COO at MP Materials]

In our prototype facility, our technical teams are advancing our understanding of desired equipment operating parameters while also producing prototype magnets with GBD for testing. Overall, it's been a whirlwind of activity. As pertains to our outlook for q two, in early April, Mountain Pass executed the first semiannual outage of 2025. With an expanded team of planners and ever improving coordination among planning, maintenance, projects, and operations, this was executed well, and in general, the process restarted well. During the outage, we addressed an unusual number of equipment installation deficiencies that had held us back in product finishing and had resulted in higher than acceptable ongoing maintenance and operational challenges.

[Michael Rosenthal, Founder and COO at MP Materials]

The scope of the work and necessary deinventorying and reinventorying extended the resumption of normal operating cadence after the outage. Since then, we are seeing significant improvement in performance with several key initiatives that will be addressed later this quarter. In all, despite the extended outage, we believe we will record a slight increase in q two NDPR production versus q one. We then plan for greater sequential progress in q three. On the last call, I mentioned material handling as one area of focus.

[Michael Rosenthal, Founder and COO at MP Materials]

In q one and during the April turnaround, we installed several upgrades at modest cost that appear to have made a big difference in these areas, particularly in concentrate roasting and lanthanum finishing. As a result, we have been able to improve throughput and reduce product losses. There are several more material handling improvements planned, particularly in PR and D finishing. As we address one issue, we often expose a new bottleneck. In expectation of an acceleration in progress, we are trying to get ahead of these issues in order to accelerate the trajectory of our ramp.

[Michael Rosenthal, Founder and COO at MP Materials]

In the upstream business, in light of the current environment and our decision to halt shipments of concentrate to China, we are slightly adjusting our focus towards increasing concentrate grade and evaluating other means of improving basmocyte recovery versus the recovery of other rare earth bearing minerals. We will also be trialing reagents that could improve our recycled water quality and support higher grade. Both of these initiatives may have some short term impact on operations. Despite this, in q two, we look forward to significant year over year growth in upstream production on an easy comparison with stable sequential output per operating hour. Similarly, we are not abandoning our efforts to optimize our concentrate production and resource usage.

[Michael Rosenthal, Founder and COO at MP Materials]

For the upstream 60 k initiative, we will reprioritize certain investments that have ancillary benefit of improving the performance of our midstream operation. This too focuses on concentrate grade as well as the isolation of certain more challenging impurities. Overall, our teams at all sites are energized by the opportunity and the interest brought about by the current environment, and I appreciate the hard work and additional sacrifices of many as we work to accelerate our progress. With that, I will turn it back to Jim.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Thanks, Michael. Let me summarize things. This past month validated the strategy we have pursued since founding MP to build a fully integrated rare earth supply chain that supports American industry and security. We delivered record NDPR oxide production, achieved our first on spec metal production for GM and turned EBITDA positive in our magnetics division, and our ramp is just beginning. We have reached an inflection point geopolitically, commercially and industrially, And MP is now well positioned as the national champion in rare earth magnetics.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

With intensifying engagement from both government and industry and our execution already underway, we are transforming from a producer into a pillar of American industrial resilience. With that, let's open the call for questions. Operator?

[Operator]

Thank you. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. We will wait one moment to allow the queue to form.

[Operator]

Our first question will come from David Deckelbaum with TD Cowen. Please unmute your audio and ask your question.

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

Thanks, everyone, and I appreciate you guys taking my questions today. And, Jim, perhaps for you, I I think, you know, you highlighted just given the backdrop of of what's happening now globally. You're talking to more partners out there. You know, I'm interested in just some additional details there. You know, you you obviously are not sure on capital right now.

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

When when you think about ways that partners might be able to help you accelerate your business or look at other opportunities or shoring up other parts of your supply chain, where where do you see sort of the most white space for for MP to create value here?

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Sure. Hey, David. So, hopefully, you appreciated the words freak out, from the song.

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

Of

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

course. It's chic.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Yes.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Yes. I mean, that's really the best way to describe it. This has been I think post liberation day has been one of the busiest months of all of our lives. You know, industry players, government, we're talking to government on pretty much a daily basis, and it's, you know, the the cutoff, this idea that there was a threat that has now been utilized, has really changed psychology, I think, from everybody, across the board. And so, I mean, I think there's there's frankly a lot of confusion in the supply chain.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

You know, I'm I mean, we'll see what happens in Switzerland this weekend, but, you know, there's talk of of potential shutdowns. I think you heard Ford mention rare earth specifically on their call. Tesla mentioned it. You know, pretty much every household name that you could think of in auto, in defense, You know, we we've had sort of some contact or another or visits. It's really been quite remarkable.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

And and obviously, you know, sort of validating to the the approach that we've had the whole time to be vertically integrated and and really focus on bringing this capability back. To answer your question specifically, you know, the the point I wanted to make on that is that if you look at all of these conversations, you you know, the key question is is how can you how can you do this faster? How can you accelerate this? You know, everyone everyone wants us to to go faster. And the point that, you know, we we like to make is that we we've invested a lot of capital, and we've taken a lot of risk.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

And now we've we we're in a much better place, I think, thanks to the efforts of MP. And any additional capital that we put to work, I mean, we've always had, as you know, a pretty high threshold, for return on capital to kind of put downstream capital to work. But as we do that, particularly to the extent that we were to go faster, you know, we expect, scaled commitments, and or you know, obviously, there's a variety of ways to get there with respect to commitments and other capital. And so I I the the takeaway that I think you should take from that is that I think that the the validation in the supply chain should lead to to the extent that we are putting incremental capital to work, the returns are gonna be pretty extraordinary or we're not gonna put the capital to work. So we feel really good.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

We feel really good about the dialogue. Obviously, we'll just be cautious and thoughtful about, you know, what steps we take. And, again, you know, we don't wanna take on anything that we don't think we can execute. But I I will say, again, you know, aside from the the fire hose aspect of it, it's really exciting.

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

Absolutely. The historic times. But just as follow-up, I'd be interested just how you all are thinking about the heavies. You pointed out you wanna bring on your own separation circuit next year. How do you think about managing that heavy supply chain vis a vis independence?

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

You obviously successfully sold some magnetic precursor, but how do you think about managing that feed as you move toward permanent magnets towards the end of the year?

[Ryan Corbett, CFO at MP Materials]

Yes. Hey, David, it's Ryan. It's a good question. We've talked about obviously the precursor sales already beginning and then moving into commercial production at the end of the year. As you can probably see and obviously you don't get the detail that I do on the balance sheet, but we've been very thoughtful about this risk for a very long time about the potential for heavy earths becoming an issue.

[Ryan Corbett, CFO at MP Materials]

And so what I'd say is, you know, we got ahead of the issue and we have the relevant amount of material stockpile to supply ourselves for startup of the Independence facility. And then obviously, Michael and his team are executing rapidly to bring our own facility and operations online to be able to produce from the Mountain Pass ore. I think the other thing that we're seeing, you know, that that Jim laid out well is with the increased focus on, the industry, I think a further appreciation for what Mountain Mountain Pass brings to the table as a potential refiner of choice globally for other heavy rich feedstocks. The fact that we've got the baseline production of, you know, the significant, you know, ore feed that we've got from our our own, you know, mine allows us to be probably the most flexible buyer of potential third party feedstock to refine and and bring into the fold in The United States and potentially for ourselves. And, you know, the other part of this that, you know, you hear a lot of sort of pinpoint solutions to some of these problems, but I think the great thing about our integrated strategy also is the ability to recycle.

[Ryan Corbett, CFO at MP Materials]

And so with independence and, you know, with incremental focus on this industry, we believe recycling is another pretty significant potential source of incremental heavy feedstock. And so, you know, suffice to say, we feel good about where we're positioned right now and, you know, where that could lead us for the future of independence.

[David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen]

Thanks, Ron. And thanks, guys.

[Ryan Corbett, CFO at MP Materials]

Thanks, David.

[Operator]

Our next question will come from Bill Peterson with JPMorgan. Please go ahead with your question.

[Bill Peterson, Equity Research at JP Morgan]

Yeah. Hi. Good afternoon. Thanks for taking the questions and for providing all the details. I wanted to ask about stage two and your ability to push more product in there.

[Bill Peterson, Equity Research at JP Morgan]

Recognize that Michael provided a lot of color on the efforts you're making to improve efficiencies and throughput and so forth. But how should we think about your production and sales volume in the second quarter and into the back half of the year? Just basically what areas have you been able to kind of increase your your throughput and utilization?

[Michael Rosenthal, Founder and COO at MP Materials]

Thanks, Bill. As as mentioned, we are targeting to increase production in q two versus q one despite the outage and some other events. And then we'd expect further growth in q three without having a a scheduled outage. Beyond that, for the foreseeable future, I'd suggest that the trajectory of growth should at least proceed along the lines that we've seen historically. Unfortunately, anything can happen any day, so it's hard to give a a longer term prediction.

[Michael Rosenthal, Founder and COO at MP Materials]

But we're really optimistic that, you know, the process is working, the chemistry is working, and it's just, a matter of execution and working through, you know, the issues, you know, towards reaching our our ultimate targets.

[Bill Peterson, Equity Research at JP Morgan]

Yeah. Thanks for that. And this is somewhat of an interesting question, but also I think this may be part of your own development efforts. But what are your thoughts on thrifting or limiting or eliminating the use of heavies? Maybe how should we think about content and maybe the the the vehicles today versus versus robotics and other areas?

[Bill Peterson, Equity Research at JP Morgan]

Just kind of what are your expectations about lowering the content, and what are you doing specifically in terms of kind of thrifting within your own development efforts?

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Yeah. Thanks, Bill. And, this is Jim. That's obviously been in, you know, a topic that we've had since the very beginning since we built the magnetics business. You know, we have over a hundred people in the magnetics business today.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

You've, you know, you've seen that facility. We have 40 engineers. And and really from day one, we've had a team working on formulations, IP, thinking about how we, you know, get to where we wanna get. And, obviously, we're now making auto grade magnets, are the hardest ones to make. And so, suffice to say that I I think we've generated a a central repository of some pretty extraordinary IP and knowledge, and you can imagine that quite a bit of that focus is on the concept of thrifting and reduction.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

And, obviously, depending on the use case, you know, the the heavies can be, you know, less or more. In the case of, say, robotics and drones, it might be less than, say, auto. The last thing I would say and and, touching upon something Ryan mentioned at the end of what he said that does sort of tie into this whole issue of material is just the inherent advantage that we have with the ability to have the vertically integrated assets and recycling. And so the fact that we can take Swarf, and, you know, obviously, eventually, when we're when we're fully normalized, we've got a lot to do to kinda ramp everything up. But the fact that we have the ability to input material back into our process is an enormous advantage.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

I mean, particularly now, I think when with this issue being so topical, rare earth magnetics, and I think you see probably a number of of upstarts out there trying to form capital, and and we we wish them all well. We hope we hope a number are successful. But I have to say, I I find it really difficult to see how a stand alone producer can succeed relative to somebody who's vertically integrated when you think about, you know, in the case of a typical auto application, you may have 20 or 30% of the material, in the finishing process is cut. And sometimes in the case of consumer electronics, like a smartphone, it could be more than half of the material falls off the production line as you're finishing it or, you know, somewhere in the process. And so our ability to kind of think holistically about, the business, you know, the use of material from a one from an IP heavy standpoint all the way downstream, but all the way really from the resource through downstream, and and figure out how to maximize throughout the process.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

We think it's just an inherent advantage to our vertical integration that, you know, again, allows us to be, hopefully, over time, substantially low cost than anybody else, but but frankly, able to survive in a very competitive landscape where others are just sort of structurally uneconomic.

[Bill Peterson, Equity Research at JP Morgan]

Yeah. Thanks, Jim and Michael, for sharing insights, and good luck navigating the fast and furious environment.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Thanks, Bill. Our

[Operator]

next question comes from Laurence Alexander with Jefferies. Please go ahead with your question.

[Laurence Alexander, Analyst at Jefferies Financial Group]

So good afternoon. Could you touch on two things? One is your working capital needs for the balance of the year and as you ramp up and how that ties into your views on what is appropriate minimum cash balance in this environment? And second is, have you had any are you seeing any real shift in automaker discussions, in terms of somebody else sort of coming in to help you scale up? And in your is your priority negotiations your overall return on capital?

[Laurence Alexander, Analyst at Jefferies Financial Group]

Is it to get capital to help fund, a ramp? Can you just give a sense for what your relative priorities might be?

[Ryan Corbett, CFO at MP Materials]

Sure. Hey, Laurence. It's Ryan. You know, I think an important thing to keep in mind in terms of where we sit today in our growth plan and from a balance sheet perspective is if you look at sort of the state of our various growth projects, we're really entering the harvesting mode of what has been a pretty significant amount of investment over the last several years. And so, with that and with the fact that we are accelerating pretty rapidly as Michael touched on our midstream production, sales of concentrate, which I'm sure is where this question is coming from, from a working capital perspective.

[Ryan Corbett, CFO at MP Materials]

We're always going to be a smaller and smaller part of the business. And, you know, I think it's easy enough for everyone to sort of model out our cost of production there. And, you know, assume we don't sell any kind until we're fully ramped. I mean, this is a pretty small working capital use that we view, you know, really as that and as something that was sort of an inevitability as we continue to scale the business. And so, given the state of our balance sheet, which remains incredibly strong, we're not thinking remotely in terms of minimum cash.

[Ryan Corbett, CFO at MP Materials]

I think we have ample cash on the balance sheet, which would be further supported by some of the things I laid out in my prepared remarks regarding prepayments from our foundational customer as well as another $50,000,000 coming from our tax credits from 2024, which we expect to continue to be a source of cash on a go forward basis. So we continue to feel very comfortable from that perspective. As relates to your second question on what is our priority, Every single deal is different. You know, the the analogy of drinking from a fire hose, I think, was a pretty apt one that you mentioned. You know, the desire from a pretty wide swath of of names you would know that, you know, want to see us in production yesterday from a Magnetics perspective is pretty large.

[Ryan Corbett, CFO at MP Materials]

And so, you know, every single deal is different. I think what we're prioritizing is capitalizing on what feels like a real sort of generational opportunity to to make this business many multiples of its current size. And so, you know, that may come in various forms. And I I think how Jim laid it out in terms of, you know, we've done the hard work already. There's a lot more hard work to come.

[Ryan Corbett, CFO at MP Materials]

But, you know, I think the amount of capital that we've put to work, you know, we expect to see pretty significant commitments from, you know, industry and or government alongside us to continue to accelerate this.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Yeah. And I'll I'll just touch on that. I I referenced this in in one of the, you know, in one of the questions, but I I just wanna make sure people understand this point. As we think about what's happening in the trade war, obviously, there's sort of tariffs both ways, but there

[James Litinsky, Founder, Chairman & CEO at MP Materials]

you

[James Litinsky, Founder, Chairman & CEO at MP Materials]

know, as it stands right now, and, of course, this could all change tomorrow, but they're, pretty much going back to the beginning, in April. Rare earth magnets are not leaving China. This is an enormous source of of leverage, you know, against against our government. And so this is a key national security industry. And so irrespective of which way this goes, and, obviously, we, you know, we hope that the the world evolves in in, you know, in a thoughtful constructive way that's that's great for America and and and good for everyone.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

But, regardless of how this goes, this is a a a point that, can no longer be on the table. I think there's a and, again, we we speak to the government pretty much on a daily basis, and I think there is widespread recognition that this issue must be taken off the table going forward. And so, the scale of what needs to happen, is pretty, you know, pretty remarkable, and, you know, we are the national champion here. I mean, we are you know, thanks to us, we're years and billions ahead. And, you know, the question is just how we can sort of lead that effort and and to to do something like that.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

You know, our expectation is that it should be rewarding for our shareholders.

[Laurence Alexander, Analyst at Jefferies Financial Group]

Thank you.

[Operator]

Our next question will come from Matt Summerville with DA Davidson. Please go ahead with your question.

[Matthew Summerville, Equity Analyst at D.A. Davidson]

Yeah. Excuse me. Thank you. I wanted to to just, putting aside for a second, you know, quote, help you might get for from industry or or government. Are you running a I wanna make sure I understand this.

[Matthew Summerville, Equity Analyst at D.A. Davidson]

Are you running a different stage two playbook today or different magnetics ramp playbook today in order to as you put it in your press release from a couple weeks ago, accelerate that stage two or the that stage two ramp and fast track magnets? I guess I'm trying to understand, has the operational playbook evolved in in the last month?

[Michael Rosenthal, Founder and COO at MP Materials]

Ed, this is Michael. I would say, in general, we've been trying to ramp as quickly as possible. At the margin, however, with what's going on, we are refocusing all of the operation to maximize and optimize the ability to ramp the midstream assets. So at the margin, focusing on our concentrate production that best supports the midstream operation. But in general, basically the same.

[Michael Rosenthal, Founder and COO at MP Materials]

For the magnetics business, I think it's business as usual, although thinking more about what ways we can leverage existing capacity or think about, you know, how capacity expansion might look as we talked about within the existing footprint or or outside of it.

[Matthew Summerville, Equity Analyst at D.A. Davidson]

Thanks. And then I just I wanna be clear relative to a prior question on the heavy side of things. Is there a certain intersection, if you will, that you have to get to between how the magnetics facility ramps and how your stage two separation, or excuse me, your heavy separation, operation ramps such that you can remain sort of self sufficient for somewhat of an extended period of time, or are you out kind of actively shopping and actively looking to stockpile either spent magnets or other third party feedstock? Because, I mean, to Jim's point, if earlier if their magnets aren't leaving China, I imagine there's probably not a lot of heavy rare earth refined refined heavy leaving China either, although I could be mistaken.

[Ryan Corbett, CFO at MP Materials]

Yeah, Matt. It's it's Ryan. To to clarify, we are in a position to be self sufficient as it stands. We've, you know, gotten ahead of this issue and have, you know, the required, feedstock and required end products from a heavy earth perspective to continue to scale independence on the schedule that we've anticipated.

[Matthew Summerville, Equity Analyst at D.A. Davidson]

Got it. Thanks for the clarification.

[Ryan Corbett, CFO at MP Materials]

Thanks, Matt.

[Operator]

Our next question will come from Benjamin Callow with Baird. Please go ahead with your question.

[Ben Kallo, Senior Research Analyst at Baird]

Hey, guys. Thanks for taking my question. How do you guys think about, just the timelines? I know you have you know, you're prioritizing the government industry, lots of different options, but, you know, how fast do you think some of this stuff moves? And I think that someone asked it earlier just, you know, where in, I guess, stage one, two, or three, do you think that, you know, that you would if you had an investment or, you know, a partnership where that would occur?

[Ben Kallo, Senior Research Analyst at Baird]

And then I have a follow-up.

[Ryan Corbett, CFO at MP Materials]

Yeah. Hey, Ben. It's Ryan. You know, I think to to your last part of the question, where, you know, where do we see opportunity? You know, I think what we've seen in this environment over the last month or so has been incredibly validating of the vertical integration strategy that we've pursued over the last several years, right?

[Ryan Corbett, CFO at MP Materials]

It's important for us to continue to support the diverse magnetics industry, you know, both in The United States and globally. But really what we are seeing a massive acceleration and interest in is having magnetics true, you know, magnet capacity in The United States at scale. It's something that we have always said is an imperative for industry and imperative for national security. And so, you know, the the level of interest there is like, frankly, nothing I've ever seen before. So, you know, we will continue to be extremely thoughtful there on on, you know, how and when.

[Ryan Corbett, CFO at MP Materials]

It's very hard to give you, you know, a a perfect timeline. But, you know, for context, magnetics was an idea on a piece of paper in 2020. You know, we made our first hire in 2021. We broke ground on a state of the art facility in 2022. And here we are in, you know, May of twenty twenty five when we have an EBITDA positive business.

[Ryan Corbett, CFO at MP Materials]

So, you know, from that perspective, I think we've got a pretty good track record of going fast when we're going greenfield. And and certainly, there are probably a lot of opportunities to to do brownfield and do other things of that sort. So it really depends on the opportunity. We see a lot of opportunities. And so, you know, it's sort of an unsatisfying answer in the sense that I can't give you something specific, but, we're very, very excited about the activity that we see.

[Ben Kallo, Senior Research Analyst at Baird]

And, you know, throughout earnings season, there's some companies that are kind of assuming, the trade war, deescalates. And I think, Jim, you you you kind of alluded to this. Do you think that that you lose momentum, if that occurs or or is it because this happened that, you know, this is gonna stay fresh and everyone's memory and, and the momentum continues for you guys?

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Sure. It's a great question. Well, first, let's start with if it doesn't deescalate. I would not be shocked if we see factory shutdowns, next month, whether it's aerospace or auto or consumer products. You'd be amazed at how many different things have magnets in them.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

You'd be amazed at how many producers out there have suppliers that they didn't realize had magnets in their product. And it so it it is a big issue. To the extent that there's a deal this weekend and everything is calm, my my guess would be that you're gonna see a variety of reactions. There there's I think it's fair to say that that most parties are in crisis mode right now because it's a crisis. There's probably some that will relax and, you know, not learn the lesson the second time around, so to speak.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

There are some that will, you know, have learned the lesson this time, and there are some that, you know, will be in crisis mode still because they'll recognize. So I think it'll be a mix. But I can tell you without without any reservation, it is very clear that physical AI is the future of warfare, drones, robotics, those kinds of things. And it is very clear that the United States government, and obviously, I don't speak for them, but in in my impression from conversations with them and the Department of Defense, etcetera, is that there's a full on recognition that we can't be reliant on Chinese magnetics for national security purposes. And in particular, I would say the defense tech space.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

I I you know, how how does a exciting defense tech startup or or prime or whatever, no longer answer the question of where their supply chain comes from for this exact reason. So I don't know to what extent memories will get short if there's a deal next week, so to speak, but there will be enough for us to do that it won't matter.

[Ben Kallo, Senior Research Analyst at Baird]

Thank thank you, guys.

[Operator]

Our last question comes from Corinne Blanchard with Deutsche Bank. Please go ahead with your question.

[Corinne Blanchard, Analyst at Deutsche Bank]

Hey. Good evening, team. Thanks for taking my question. I'm going to go on the obvious here question, but I I really want to understand what's your strategy in term of the shipment that are not going anymore to China? And I think the question is probably like a 40 check question here, but how long can you go without the shipment coming out?

[Corinne Blanchard, Analyst at Deutsche Bank]

What's your view on stockpiling production if, you know, in three to six months, we're still in the same situation? So just trying to understand, you know, I would say the key tech inputs here and how they're going that could impact your your EBITDA and, you know, just your strategy on six to nine months.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Yeah. So, Corinne, in the beginning, you cut in and out there like spies like us, if you've ever seen that scene with Chevy Chase. But I think the I you wanna you do you stockpile?

[Ryan Corbett, CFO at MP Materials]

Yeah. Yeah. Sure. I'm I I can jump in. It's Ryan.

[Ryan Corbett, CFO at MP Materials]

I I think I got the full question and jump in, Corinne, if I miss parts. But I think the important thing to keep in mind is if you think about how low cost we are from a cost of production perspective for concentrate, stockpiling a half a year of concentrate production as an example is like low tens of millions of dollars of working capital, which given the scale of the cash on our balance sheet, you know, is not something that we lose a ton of sleep over. You know, I think the the reality has always been that the sales of concentrate were always declining and rapidly declining the better we do on midstream ramp. And the important thing as well is having that concentrated inventory, the profit is deferred, but it's not lost. We will take that product and we will refine it over time.

[Ryan Corbett, CFO at MP Materials]

And I actually think that having some level of con inventory is actually advantageous for a variety of reasons that, you know, we're happy to get into. But, you know, from that perspective, it's something that we've got the land at Mountain Pass. You've been out there, you've seen, you know, the scale of the site. There's plenty of room to store con. And so, you know, I think Jim laid out what our strategy is going to be.

[Ryan Corbett, CFO at MP Materials]

And so, you know, this is sort of always been in some ways an eventuality. This is a little bit of a, you know, a unexpected turn perhaps, but one that we've actually prepared for in many, many ways.

[Martin Sheehan, SVP, IR at MP Materials]

Did we lose you, Corinne? I think we lost our operator. Lunch.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Okay. Who's the whole call?

[Corinne Blanchard, Analyst at Deutsche Bank]

Hey. I'm back. I don't know if you have one more minute.

[Corinne Blanchard, Analyst at Deutsche Bank]

Sure.

[Corinne Blanchard, Analyst at Deutsche Bank]

Hey. I think they had put me on mute. But, I mean, just for me to understand, so outside of your production, how much is non China? I think that's what, you know, investor are trying to understand here.

[Ryan Corbett, CFO at MP Materials]

All all of it, Grant. We're not sending anything to China right now.

[Corinne Blanchard, Analyst at Deutsche Bank]

And you have the demand for all that production ex China?

[Ryan Corbett, CFO at MP Materials]

Correct. And given what we've seen in the last several weeks, you know, we're incredibly optimistic about the ex China supply chain.

[Corinne Blanchard, Analyst at Deutsche Bank]

Okay. Thank you.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

Thank you.

[Operator]

That concludes the question and answer portion of today's call. I will now hand the call back to mister Litinski for closing remarks.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

K. Alright. Well, thank you, everyone. Obviously, it was a a very exciting quarter for us, execution wise across the board. And, I think geopolitics kept us a little busy in in May for some time.

[James Litinsky, Founder, Chairman & CEO at MP Materials]

So we will get back to work and see you all soon. Thanks.

Participants

Executives

• Martin Sheehan, SVP, IR
• James Litinsky, Founder, Chairman & CEO
• Ryan Corbett, CFO
• Michael Rosenthal, Founder and COO

Analysts

• David Deckelbaum, Managing Director: Sustainability & Energy Transition at TD Cowen
• Bill Peterson, Equity Research at JP Morgan
• Laurence Alexander, Analyst at Jefferies Financial Group
• Matthew Summerville, Equity Analyst at D.A. Davidson
• Ben Kallo, Senior Research Analyst at Baird
• Corinne Blanchard, Analyst at Deutsche Bank