MP Materials (NYSE:MP) is nearing targeted production levels for neodymium-praseodymium, or NdPr, oxide at its Mountain Pass facility while advancing commercial magnet deliveries for General Motors and expanding its downstream manufacturing footprint, Chief Financial Officer Ryan Corbett said during a Jefferies fireside chat.
Corbett described MP Materials as the Western world’s largest rare earth materials producer and the only scaled producer of NdPr oxide in the Western Hemisphere. He said the company has built a vertically integrated platform spanning mining, rare earth separation and magnet manufacturing.
Mountain Pass Ramp Targets Year-End Completion
MP Materials brought separation capacity online at Mountain Pass near the end of 2023 and is producing roughly 1,000 metric tons per quarter of NdPr oxide, Corbett said. The company is targeting full run-rate capacity by the end of the year.
He said the remaining work in the debottlenecking program is centered on mechanical reliability and material movement as throughput rises, rather than unresolved chemical-process issues.
“These are not sort of fundamental chemistry issues,” Corbett said. “These are very typical blocking and tackling for a facility of this scale.”
The company is also investing in a chlor-alkali facility and heavy rare earth separation capabilities at Mountain Pass. Corbett said MP Materials expects to produce dysprosium and terbium by year-end for internal use in its magnet business.
In addition, MP Materials recently announced a long-term gadolinium contract. Corbett said the agreement reflects the broader opportunity to commercialize other rare earth materials produced at Mountain Pass, including samarium, europium and gadolinium.
Magnet Deliveries and Defense Expansion
MP Materials is targeting the start of commercial magnet deliveries to General Motors at the end of the year. Corbett said the company is progressing through the production part approval process, which involves integrating specific parts and production volumes into a customer’s manufacturing supply chain.
He said MP Materials is already producing magnets that meet specifications and characterized the remaining process as supply-chain integration rather than product qualification.
The company is also building its next magnet manufacturing facility, referred to as “10X,” following a public-private partnership announced with the U.S. Department of Defense in July of last year. According to Corbett, the Defense Department is the facility’s 100% offtaker and has provided a guaranteed minimum earnings level for the operation.
MP Materials broke ground on the project and is targeting production at 10X by the end of 2028. Corbett said the company ultimately plans to syndicate capacity at the facility to commercial and defense industrial-base customers.
He added that the company’s agreements with GM and Apple included prepayment arrangements supporting investments in manufacturing and recycling capacity. As commercial magnet deliveries begin, Corbett said the Independence facility is expected to shift toward cash generation after serving as a major part of the company’s recent investment program.
Supply Risks Drive Customer Interest
Corbett said China’s export restrictions have reinforced concerns among original equipment manufacturers about dependence on Chinese rare earth supply chains. He pointed to publicly available trade data that he said showed gadolinium, yttrium and magnets containing heavy rare earth elements such as dysprosium and terbium moving into Japan at nearly zero levels, with similar conditions affecting U.S. imports.
While export licenses have flowed to some degree, Corbett said customers increasingly view reliance on approvals from Chinese export officials as an unacceptable supply-chain risk.
“You can never allow your business to be that reliant on the whim of an export official at the port coming out of China to decide if your automotive plant is going to stay open or not,” he said.
Corbett said demand for Western rare earth supply is increasing across refined materials and magnets. However, he argued that planned magnet capacity additions outside China could create an NdPr oxide bottleneck. Existing scaled NdPr production outside China is effectively limited to MP Materials and Lynas, he said.
According to Corbett, announced Western magnet manufacturing additions would require NdPr output to double immediately just to supply capacity already planned. He said either commodity prices would need to respond significantly to encourage new supply or magnet facilities could be built without sufficient oxide available to fill them.
Bipartisan Support and Capital Approach
Corbett said rare earth supply-chain security has attracted bipartisan backing in the U.S. and that MP Materials has worked with successive presidential administrations. He said there may be disagreements over policy mechanisms, but there is broad agreement on addressing supply vulnerabilities involving China.
On financing, Corbett said MP Materials believes its current balance sheet and anticipated cash generation can support the investments it has already outlined. He said the company would remain opportunistic regarding acquisitions or downstream expansion but would evaluate opportunities based on risk-adjusted returns on capital and contractual support.
MP Materials also has a previously announced letter of intent involving the Department of Defense and Saudi Arabian mining company Ma’aden to develop a rare earth refining facility in Saudi Arabia. Corbett said the company expects to approach that opportunity in a capital-light manner by leveraging its intellectual property, while potentially providing an alternative refining outlet for global feedstocks that currently serve China’s refining complex.
About MP Materials (NYSE:MP)
MP Materials Corp. is a rare earth materials company that owns and operates the Mountain Pass rare earth mine and processing facility in California. The site is one of the largest rare earth production facilities in the Western Hemisphere and produces rare earth concentrate, with an emphasis on neodymium-praseodymium (NdPr), materials used in high-performance permanent magnets.
The company is expanding its operations beyond mining and concentrate production into separated rare earth products and magnet manufacturing.
