MP Materials Corp. Q4 FY2024 earnings call

• In 2024, MP set a new record by producing 45,455 metric tons of REO, 9% higher than 2023. Midstream produced 1,294 metric tons of NdPr oxide in 2024, with Q1 targeting over 20% sequential growth.
• Magnetics segment achieved two critical milestones in Q4 2024: starting NdPr metal production in the US and initiating trial production of automotive-grade magnets. Total prepayments reached $100 million in 2024, with expectations of additional $50 million prepayment and tax credits.
• The company managed its balance sheet by pushing out debt maturities to 2030 and buying back 8.6% of outstanding shares.

The company has two reportable segments: Materials and Magnetics. The Material segment includes upstream and midstream businesses at Mountain Pass, with concentrate and separated rare earth product sales. In 2024, the Material segment produced 45,455 metric tons of REO, a 9% increase from 2023. Midstream operations produced 1,294 metric tons of NdPr oxide in 2024, well above 2023's 200 tons. The Magnetic segment encompasses operations at Independence, initially focusing on magnetic precursor product sales. In 2024, the Material segment accounted for 100% of revenues and cost of sales, while Magnetics costs were in SG&A and advanced projects ahead of product sales in 2026.

• Q1 2025 targets over 20% sequential growth in midstream production. Expect to reach gross margin profitability in midstream operations soon.
• 2025 CapEx expected to be roughly $150 million to $175 million, split evenly between Materials and Magnetics segments. Magnetics CapEx focused on completing manufacturing equipment for year-end production. Materials CapEx on high-return growth investments like Upstream 60K.
• Expect to receive final $50 million prepayment in the next few months and additional ~$50 million from tax credits within the year.

• Production progress may have occasional instability and downtime during equipment implementation and process enhancements.
• China's potential regulatory changes, such as prohibiting non-state companies from mining rare earths, could impact supply and pricing.
• Global tariffs and import costs could potentially affect the cost structure, though MP has limited exposure to imported materials.

Q: Production run rate for NdPr and steady state cost?

A: Michael Rosenthal said aiming to reach run rate as fast as possible balancing cost and stability, with Ryan Corbett stating strong conviction in being low-cost producer globally as progress is made.