MP Materials Corp.

Q4 2025 Earnings Call — February 26, 2026

Analyst Lawson Winder (Bank of America): Thank you very much, Operator. And hello, Jim and Ryan and Michael. Thank you for today's update. This has been super helpful. And congratulations on a first quarter realizing much higher pricing from your PPA agreement. If I could, I just ask one in a follow-up. So on the OEM, can you tell us whether or not it's a U.S.-based OEM or is it a foreign OEM?

Executive Ryan: I think Jim mentioned in his prepared remarks, you know, well, we're not going to get into specific details. This is one of America's leading technology companies. I think what this agreement speaks to broadly is what we've been talking about for a long while, which is accelerating demand for NDPR and the value of the platform that we provide, being able to be a solutions provider for these types of companies that are looking to transition their supply chain away from China, being able to address the various points in the supply chain from raw materials all the way through to magnets, I think is super important.

Analyst Lawson Winder (Bank of America): Okay. No, that's fair. I understand the desire not to give too much detail. And then just on the timeline with 10X, I mean, things seem to be moving quite quickly here. And we originally thought of 2029 as being kind of a target year. I mean, is there a possibility to move that forward? Could 10X potentially develop slightly more quickly than what you guys had originally envisioned?

Executive Ryan: Well, 10X procurement and long lead equipment focus and a lot of design and engineering. I mean, that all really started Lawson last July. Once we signed the agreement, we got to work building the new team there, coordinating that new team with our existing team, and then thinking about all of the equipment and pieces of the process that we could do while we then ran Lawson, you know, our process for site selection. What I would say is I've directed the team to think of this project like, you know, you've probably heard the term zero-based budgeting. This is a zero-based days project. We are focused on getting this online as quickly as possible. You know, we've said we'll be commissioning that in 2028. We've made a lot of progress. We think it's on track and we'll just, we'll keep trying to make up as much time as we can as aggressively as we possibly can. And it's going really well.

Analyst George Janarikas (Canaccord Genuity): Hi everyone. Thank you for taking my questions.

Executive Ryan: Hey, George.

Analyst George Janarikas (Canaccord Genuity): I wanted to ask about this OEM agreement again, in terms of just how you think about the P&L and the economics behind selling oxide directly or selling magnets. How do you think about just the trade-off between the two? Thank you.

Executive Ryan: You know, I think importantly, the way we're approaching this is, you know, effectively independence at this point is sold out. And I think we've been clear about our strategy around 10X, you know, given the offtake that's in place there, we have the luxury of continuing to be extremely methodical in how we deliver commercial syndication from that facility. I think importantly, as I mentioned earlier, we are really the only solutions provider to all of these various OEMs that are really accelerating the look at their supply chain and attempting to transition away from China as quickly as possible. And so the fact that we can play a major role there in providing raw materials into their supply chain immediately and capture that value today while opening up some pretty significant opportunities I would expect in the downstream, I think is hugely value accretive to us. And so, as I mentioned in my prepared remarks, having an oxide agreement of this scale certainly does accrue to the benefit of the material segment in the near term.

Analyst George Janarikas (Canaccord Genuity): And as a follow-up, I'd love to hear Jim opine on what he thinks is happening to NDPR prices in China. Thank you.

Executive Jim: Well, commodities prices, George, as you know, are always tough. I do think that, you know, there's a few things. One, the reaction post our deal. I think the Chinese no longer, you know, are going to be as mercantilist because there's no point. And then lastly, I would say I would I would also then say that, you know, NDPR is seeing demand from what we're seeing around physical AI and, you know, kind of what I said in the prepared remarks around a lot of excitement around everything that's happening with respect to motion in the economy. And so I think there's when you think about critical minerals, you know, there's there's kind of the scarcity. There's two kinds. There's sort of the heavies and some of the other niche metals where they're just scarce. And we need to get more here because the only option is China. But in general, the demand function for those is somewhat consistent or static.

Whereas with NDPR, especially because of the restrictions around heavies, what we're seeing, and we're seeing this live, I think we can probably give you a couple live anecdotes where we've actually seen a major consumer of rare earth magnets completely change their spec overnight to essentially eliminate heavies and focus on shifting towards more NDPR. So what we're seeing is we're seeing the traction motor, you know, the EV and hybrid makers focus on trying to maximize NDPR, shift away from heavies and actually we're seeing again real-time action on that front that is material to that as well as then all of the other use cases around. I think that NDPR will be obviously the key material of physical AI and so that's, you know, the big growth function there. So when you add it all up, I think one it's the, you know, the market reaction to getting a little bit more of a normalized price in NDPR because we're getting closer to market economics. We're still not there. And then it's a function of some of the existing use cases where we're seeing real-time substitution towards more NDPR. And then it's a lot of the sort of growth excitement that we're seeing around the board.

And I would say, I mentioned this, I kind of referenced this in the prepared remarks, but there's sort of a bifurcation happening. I think NDPR is really the growth commodity. And I think we... Again, commodities prices can always do crazy things, but I think we are going to see continued acceleration in NDPR prices.

Analyst Brian Lee (Goldman Sachs): Hey everyone, thanks for taking the questions. I guess maybe just to follow up to George's question, there's in the marketplace lots of focus and I guess policy driven as well, you know, focus on pricing floors and the like. But, you know, Jim, your prepared remarks, it sounded like there's, you know, NDPR upside that needs to be better appreciated and more of a focus here. So and we have seen some strength here recently. Is there maybe a way to think about what that NDPR pricing level or entitlement is? Could be you talked about kind of a normalized price, like what could that be or what could that range be over time? And is there a trigger or sort of time frame where you think that that could ultimately materialize?

Executive Jim: I mean, that's such a hard thing. You know, I guess the famous expression predictions tell you more about the prognosticator than the future. But I do think with respect to NDPR, I think I've consistently conveyed the view that I think that if we were actually in sort of a real free market, so to speak, in NDPR, you would see prices materially higher, way higher than today, for sure, into the hundreds of dollars just because of the what is sort of the adequate return on capital required to bring online projects, right? If there wasn't a non-market geopolitical actor in setting prices and it was just sort of what would incentivize capital, I think prices would be materially higher. But the realities of the market are the realities of the market. We've made a lot of progress, obviously, given what we've done with DOW and given some of the market developments. We're not fully there obviously and then I think on the next piece it actually comes down to sort of the pace of how quickly physical AI matures.

Analyst Brian Lee (Goldman Sachs): And just to follow up on some of the policy stuff that's still circling around the space, Project Vault and Section 232, among others. Are there any implications for you? Is it impacting your business discussions with non-DOW offtake parties or maybe even DOW discussions? And would you expect any impact on pricing? I know it's early and uncertain, but maybe any thoughts around how you might stand to benefit there?

Executive Jim: Yeah, no, it's a good thought. I think, you know, first and foremost, obviously, our deal last year kicked off a big change in our industry and it opened up the capital markets and it obviously created a bigger window here for us in the West to work on this problem. And it's exciting. But I think what you're seeing is it's not just the DOW, but there are all aspects of the administration, you know, the main verticals, whether it's state or commerce or treasury or interior or energy. Everybody is focused on this issue. It's a key directive from the president. And so I think when you look, there are a number of these things you mentioned, Volt and there's Forge and there's a few others, I would say. They're in various stages of development, each of them. Some require allied nations to kind of come to a view and have a plan. Some are things that are coordination between the private and public sector. What I would say is most of those things are, I would say, somewhat earlier, at least not done. We would expect to be a big part of how things might form in some of those categories that you mentioned. And so my guess is that any of those things will be very good for us, but there's nothing really tangible yet that I could guide you to specifically.

Analyst Corinne Blanchard (Deutsche Bank): Hey, good afternoon, gentlemen. Thank you for taking my question. Could you just talk maybe about the CapEx cabinets we can expect for the year? I believe about 500 to 600 million, mostly related to the 10X, but just wondering how that maybe breaks for the quarter. And a similar question for the EBITDA cabinets as well.

Executive Ryan: Yeah, sure, Corinne. As we think about the cadence, there'll be quite a bit of lumpiness throughout the year within that range, given the fact that we'll have some initial capital spend probably early in the year, particularly on the land that we've just acquired that was announced this morning for our site in North Lake, Texas. Throughout the course of the year, obviously the portion of that CapEx targeted at 10X will start to scale as we begin construction. And then some of the other parts of the business and growth initiatives that we're working on, namely our engagement with Apple, you know, there's capital spend really throughout the year with probably a slight bend towards the tail end of the year as we get that equipment installed and prepared for 2027, you know, commencement of that agreement. As relates to the EBITDA cadence obviously, you know, back to Jim's comment on predicting NDPR prices I think that's probably going to be the biggest driver here.

Analyst Corinne Blanchard (Deutsche Bank): And if I can, for a second question, do you share, how do you view maybe the best way to access the heavy needs beyond what you already have? Are you thinking about more recycling? Are you thinking about mine expansion, and you're looking at all the P, M&A, just trying to figure out.

Executive Michael: Yeah, we are certainly looking at recycling as an option. And I think, as I've said in the past, we think the integrated nature of our site allows us to avail ourselves of a diverse range of feedstocks. With our agreement with the Department of War, we have their support to source feedstocks from around the world. So I think there'll be a mix of perhaps traditional recycling and non-traditional feedstocks. But as Jim mentioned, our progress in reducing our heavy need makes us less overall concerned. But we think we will be the largest producer of heavy earths in the Western Hemisphere from now for as long as you can imagine.

Analyst Carlos de Alba (Morgan Stanley): Yeah, thank you very much. Congrats on the progress on the different projects. Just on 10X, the user clarification on the CapEx in the announcement had 1.25 billion plus. I mean, can you provide maybe a little bit of color on that plus? Maybe dimension that for us, quantify that for us, just on the modeling side.

Executive Carlos: Yeah, sure, Carlos. I'll start with your last question. We do intend to meet all heavy and light feedstock for both facilities from the Mountain Pass processing facility. As Michael just talked through, we have various initiatives in place in partnership with the Department of War, in partnership with Apple, from our own sourcing strategies to bring in incremental heavy worth feedstock. I think the thing that's really important to understand there as well is when you think about a business model that is centering on third-party feedstocks as part of a supplement to its ability to produce products, you really have to produce both lights and heavies in order to compete in that market. There is no way you can compete economically without being able to extract the value from all of those. And so we are extremely confident in our ability to continue to source third-party feedstock as we are, frankly, as we speak.

Analyst Lawrence Alexander (Jefferies): Just two quick ones. First, can you give an update on the progress on the Saudi JV and your bandwidth for a similar fraught JV potentially in either Europe or South America? And secondly, can you give an update on your approach to hiring formulation engineers and your strategy towards how many SKUs are you offering the customers? Are you encouraging them to focus on a narrow number of SKUs?

Executive: Sure. Well, on Modin, there's really two tracks. As you know, we signed a binding term sheet late last year. We have to finalize formal documents with our partner in that transaction, the Department of War. And then with modern to kind of do the aggregate JV obviously all of the a lot of the final details need to be associated with our final estimation on the cost of the build the process flow of the facility there's a number of pieces that we have to work on to get towards completion on that front and of course that means that the second work stream is from an operating standpoint Michael and his team are working on the process flow, all aspects of how that facility will work. And so there's sort of two main streams there. What I would tell you is, obviously, that is going to be a big, exciting project, but it's going to take some time. I mean, we're going to make sure that that is built right, and we're going to you know do that cautiously and thoughtfully so um you know we'll do that methodically i guess is the best way to say it and we're continuing to work on that.

Analyst Lawrence Alexander (Jefferies): And I think you asked also about recruiting and engineers, and we've certainly built a pretty extraordinary team in our magnetics business. That team is growing. Getting that project done is no small task. I'm obviously very focused on that. We have a whole team that we've built since we signed that deal last July, and that's underway and going really well. And so we're focused on executing that.

Executive: I think the only thing on that, Lawrence, is in your question about focusing on SKUs, I think what's interesting is from a magnet formulation perspective, I think Jim made the point earlier, we've seen a really big push from customers to really narrow their focus on heavy-earth, free, or extremely reduced magnet formulations. I think Jim also spoke about the progress that we've made there, even versus our initial formula for EV traction motors, as an example, being 60% lower than where we started out, which was already on the low end of market norms.

Analyst Bill Peterson (JP Morgan): Yeah, thanks for sneaking me in. Congrats on the results and all the great information here. Question on, I guess, offtake and further offtake agreements. Do you have, I guess you have the desire or the bandwidth or the capacity to support additional offtake agreements? Or would this be limited by expansion such as upstream 60K or having a 10X facility up and running?

Executive Ryan: Yeah, I think, Bill, you know, we continue to remain opportunistic. I think certainly if you think about the scale of demand from automakers, it's almost 30 percent of magnet content today goes in the automotive supply chain. And nearly 100 percent of that today is coming out of China. And so just the slice of the pie there that is available as those customers look to diversify their supply chains in today's market is pretty exceptional.

Analyst Bill Peterson (JP Morgan): And then I guess the second question is, can you just provide us an update on the magnet qualification that your lead auto customer, as well as the comments, Michael, you made about, you know, the troubleshoot ramp, like the double click on that. Is there anything to call out there in terms of focus on yield or throughputs, or I think the technical performance is fine, but just as anything else you can kind of speak to on that, on the magnet ramp.

Executive: I'll start with the latter part. I'll let Brian handle the PPAP. I'm, you know, the magnet ramp, I think stepping back, thinking about where we were several years ago, I couldn't be more proud. And I also couldn't be more optimistic that our team will be able to tackle this challenge. And we know that starting a new facility is challenging. But, you know, the challenges we've achieved overcome so far relative to what we have to do now, I think it's just a focus on execution.

Executive: And on PPAP Bill, as I said earlier, kind of zooming out, one of the reasons we wanted to start with an automotive customer was our desire to produce magnets at the outset that could withstand some of the highest quality standards that are required for things like EV motors. PPAP is obviously a fairly extensive process you know it audits not only the product quality but also the manufacturing processes themselves you have to demonstrate different run at rate scenarios etc. And so frankly going through that process will continue as we, you know, launch a facility we'll hone our processes and capabilities and it's going to put us in a position to accelerate and bring, you know, customers like Avalon even more quickly.

Executive: And so we are just beginning that process, but given our significant engagement from day one in building this plant in partnership with GM, we believe it'll be a relatively accelerated process compared to sort of a typical, you know, auto supplier qualification. And so that's what informs our guidance and view of back half of the year for saleable magnets.

Executive: Thank you, everyone. It was a pretty outstanding quarter to a transformational, incredible year of 2025 and 26 is off to a great start. So we will get back to work and see you all soon.

Q3 2025 Earnings Call — November 6, 2025

Analyst Name (Firm): Bill Peterson (JP Morgan) Executive Name (Title): Ryan (CEO)

I'm wondering, I guess, with your current stockpile, the SCG Plus stockpile, how long could that support your heavy production once fully ramped? And I guess... You know, you talked about engaging with other heavy feedstock suppliers. Are these foreign suppliers, domestic suppliers? I guess in the context of, you know, you're mentioning that there's not a lot of viable options out there in terms of ore bodies. I want to get into more context on what type of feedstocks you may have, or maybe if M&A may come into consideration.

In terms of the SEG Plus stockpile, we have several hundred tons on an REO basis of SEG stockpiled. Obviously, we are producing SEG every single day. And so from that perspective, we feel good about our inventory

at this time to be available for us to commission that circuit and charge that circuit.

And certainly, as we've discussed, we believe with our own internal feedstock, we will be able to satisfy the demands of the independence facility with that.

Executive Name (Title): Michael (COO)

In terms of feedstocks, I think one thing we're very excited about is how our fully integrated site with both ore based processing as well as light and heavy separation gives us and recycling gives us like very unique capability in terms of processing different types of feedstocks. So we are in touch with both domestic suppliers, suppliers of recycling material, recycled material, along with some foreign suppliers. Obviously, you see as much as we do all of the announcements from various players around the world where we have our opinion on some and are in discussions with many. But like I said, we're confident that we will find several different options.

Analyst Name (Firm): Bill Peterson (JP Morgan) Executive Name (Title): Ryan (CEO)

And then on the magnet business, I guess, how is the customer engagement going beyond Apple and GM? I guess what, you know, I guess there are people trying to test some of your sample or what's going on with the business for the further optics and independence and then ultimately 10X?

Sure, it's Ryan again. I think certainly since Liberation Day, the supply chain mindset across the space has changed very meaningfully. There's a tremendous amount of engagement across You know, really every vertical that consumes magnets, automotive, aerospace and defense, consumer electronics, robotics, you know, you name it. You know, I think fundamentally we are focused on executing first for our foundational customers. And from a 10X perspective, we have the luxury of continuing to operate in the same fashion that we have for the last several years, given the fact that we have 100% offtake secured for 10X. As we've talked about, our Apple agreement anchors the vast majority of the expansion that we've planned for independence. And so it puts us in a position where we can continue to be very selective in with our customers, but the engagement is quite significant and broadly very exciting.

Analyst Name (Firm): Lawson Winder (Bank of America) Executive Name (Title): Michael (COO)

Thank you very much, Operator. Good evening gentlemen, nice quarter and once again a very interesting and fascinating update. May I ask about a couple things? So just on the heavy rare earths, there's the dysprosium intervium 200 kilotons annually. How is that roughly split? And then secondly on the heavies, there's the samarium loam, and as the name implies, there are other rare earths that the DOE would like to access. What's the timeline to producing some of those other rare earth metals that are particularly of interest to the DOD? And has the DOD set any deadlines?

This is Michael. Thanks for the question. In our ore body, the general ratio of dysprosium to terbium is about three to one. So that would be kind of the approximate mix. Some of the other third-party feedstocks and recycled material may have slightly different mix, so ultimate production may differ from that to some extent. In terms of other heavy rare earth production, we have made a commitment to produce samarium in 2028, samarium oxide. We feel very comfortable with that type of time frame. We have made no public commitments to produce any other heavy rare earths, although gadolinium would be a logical next one to produce, probably around the same time frame. As for the others, I think we are eager in discussions with various other parties domestically and in allied countries about offtake of our other materials for them to process into other rare earths, but to the extent there's strong demand or need, we're capable of doing further separations.

Analyst Name (Firm): Lawson Winder (Bank of America) Executive Name (Title): Ryan (CEO)

Okay, that's very fascinating. Thanks, Michael. And then can I ask about the Apple $200 million prepayment? I had not expected $40 million to be paid in Q3 so quickly. Can you help us understand a timeline under which the remaining $160 million would be prepaid?

Sure, it's Ryan. We are thrilled to surprise you to the upside. We can't get into contract specifics, but certainly the way this was designed was to continue to provide capital for this build-out as we hit certain operational milestones. We actually expect a next payment of relative scale coming up in Q4. And I think that over time as we execute on this plan, we've laid out initial magnet volumes targeting mid-27 and recycling close behind. You'll continue to see those prepayments on that schedule.

Analyst Name (Firm): Matt Somerville (DA Davidson) Executive Name (Title): Management

Hey, Matt.

Analyst Name (Firm): David Deckelbaum (TD Cowen) Executive Name (Title): Ryan (CEO)

Thanks for taking my questions, guys. Hi, Jim, Ryan, and Michael. I appreciate the time. Hey, David. You know, Ryan, I think you probably astutely pointed out that the key risk here for MP with incentive prices now is execution. And if I heard right, it sounds like you're targeting the end of 26 for operating an NDPR separation nameplate. Michael, I guess you alluded to some things around just NDPR separation, you know, I guess kinks that you're ironing out now. So I guess is it fair to say as the contract becomes live now with the Department of War at $110 a kilo, should we think about you guys ramping as quickly as possible in the 26 calendar year? Or can you provide any color around what we should expect in the ensuing quarters from incremental throughput tonnage?

Hey, David. I'll start. It's Ryan. I think the important thing to keep in mind from an economic perspective here is we've talked about our concentrate stockpile, and frankly, for a variety of reasons, and now economic reasons, that actually has a lot of value to us. And so certainly, we are focused on ramping as quickly and as smartly as possible to serve the market and to prove out this capability. But it's important to remember that under the PPA, we still are paid for the NDPR content within the concentrate that we stockpile. Of course, we don't get paid twice. We get paid when we put it into the stockpile, and then once we refine that material, we'll sell it at market prices. But it's a very important value driver for us, and we can continue to look at our view of the market and nominate volumes into that stockpile as we produce them and as we see. So that gives us a lot of operational and economic flexibility in 2026 and beyond.

Analyst Name (Firm): David Deckelbaum (TD Cowen) Executive Name (Title): Jim (CFO)

I appreciate that. And then just as a follow-up, I think, Jim, you talked about really the availability of Swarth end-of-life magnetic products. You guys talked about third-party feed, and I know others have asked you about those questions. But I guess as you think about really addressing the supply chain going forward for your own needs, and really internally in this country and for allied nations, where do you prioritize looking at your own capabilities around recycling with obviously the startup of the Apple facility over the next few years? How do you think about focusing on Swarth and the ability to source that versus looking at third party feed for more bodies?

I mean, I think it's an all of the above approach. Obviously, over the next couple of years, we're maniacally focused. We have a number of projects, right? We are scaling independence. We are getting 10x underway and quickly and then doing the multiple pieces of recycling and mountain pass. As you know, David, this management team is pretty opportunistic. So we will try to take advantage of opportunities out there. I would say that, again, over the next couple of years, it's just executing all of this. And I'd remind you that we have the feedstock to serve our entire 10,000 tons of magnet capacity currently, certainly with the Apple piece being part of the deal that they're helping provide feedstock. So we have the, I guess to use Ryan's words from earlier, the luxury of being methodical about how we think about incremental feedstocks.

Executive Name (Title): Ryan (CEO)

One important point also, David, to think about, is as we look at sourcing third-party feedstocks or we look at sourcing magnet material and end-of-life material, I think despite all the focus on price floors, at the end of the day, the economics of this business depend on your cost structure. And so as you see some of these other things announced out there, what you should keep in mind is we will be one of the lowest cost producers of these products, whether refined or from mine material. And that also gives us the opportunity to be thoughtful in the acquisition of third party feedstock. And so with the platform that we've built, we think we are in pole position to be able to acquire most thoughtfully the best potential feedstocks for the business, given the fact that our cost structure will be best in class.

Analyst Name (Firm): Matt Somerville (DA Davidson) Executive Name (Title): Management

Hey, Matt.

Analyst Name (Firm): Carlos (Morgan Stanley) Executive Name (Title): Michael (COO)

Hey, Carlos. Yes. Hello. Hi. Can you hear me?

Analyst Name (Firm): Carlos (Morgan Stanley) Executive Name (Title): Michael (COO)

Great. All right. Thank you very much. Congrats on a strong performance this quarter. Just maybe on the prior response, Jim, can you clarify, maybe I misunderstood, but are you going to be able to supply recycled material or have capacity in your recycle line above and beyond the 2,000 tons that you have under contract with Apple?

Oh, are you referring to... Actually, Michael, why don't you take that and kind of...

Executive Name (Title): Michael (COO)

I think, Carlos, if I understand the question, we are building a dedicated line for Apple to manage material and feedstock that they are responsible for providing to us. We also will have the capability to process our own swarf, and we'll build that modularly to process as that market grows, which we're very optimistic about, additional feedstocks as well over time.

Analyst Name (Firm): Carlos (Morgan Stanley) Executive Name (Title): Michael (COO)

All right, got it. Yeah, okay. And it will be a separated line from the one that you were working on or building on for Apple, right?

So the Apple line will be largely separate from our existing line, but the other feedstocks we are evaluating and will leverage our existing infrastructure and capability and light and heavy rare separation in the most thoughtful way possible, depending on the nature of the feedstock and customer requirements.

Analyst Name (Firm): Carlos (Morgan Stanley) Executive Name (Title): Michael (COO)

All right, okay. And then Michael, maybe you can help us understand what is the thoughts about the ramp up of the DY and TB output post-commissioning?

Our focus initially is obviously on meeting the needs of our customers and the independence for GM. And because we have this stockpile, we'll be able to produce amounts greater than our initial ore-based material would supply on a yearly basis. And then we'll look at what third-party feedstocks we have and what pre-processing is required. But the volumes are obviously relatively modest. So I think the ability to ramp will depend on how quickly we feel comfortable pushing those volumes. Obviously, we have very high quality requirements and need to make sure we perform well.

Analyst Name (Firm): Ben Callow (Baird) Executive Name (Title): Management

Hey, guys. Good evening. I was wondering how you think about price floors for heavies as you advise the administration. If you've given any weight to that, I'll follow up to it.

Executive Name (Title): Ryan (CEO)

Hey, Ben, you mean what do we think of them intellectually? I guess when it comes to heavies, the one thing, I think this kind of comes at your question another way, but if we reference back to kind of the overall point that I was trying to make in the prepared remarks is that when you look at the supply chain in our space and the various areas of it, the heavies area is one where typically you have deposits where it makes sense that there are economics where that could be a concentrate or a feed, you know, make a concentrate or make a feedstock that can go to a refiner like ours, like we've built. But typically, at least we haven't seen, those sites, the various ones around the world of varying degrees of value, where it would make sense economically to build refining capability around that. And so we are really well positioned to accept those feedstocks. And so that's obviously the work that we are doing with DOW to make sure that we have the material for our business through 10X.

Executive Name (Title): Ryan (CEO)

And so obviously there are a variety of ways that you can incentivize that upstream production and get economics to those parties to encourage that production. But I do think it is important to think of those as sort of part of a broader supply chain. And, you know, there are not necessarily independent standalone economics for sites like that to be, you know, a full vertically integrated participant.

Analyst Name (Firm): Ben Callow (Baird) Executive Name (Title): Ryan (CEO)

Um, so just a follow on, because you, uh, you guys have, uh, I guess everyone's ear. Uh, so what is the advice, uh, to get the heavies, uh, to the admin?

Well, I'd like to, you know, obviously the, you know, the detailed advice that we would give to the government, I think we would, you know, try to keep that, you know, in confidence. But I think I can speak in general terms, which is, what I was hinting at, Ben, in my remarks is that when you, if you look at the structure of this industry and just look at how China has formed, now, obviously a lot of that is state-driven, but, you know, you know, a lot of it is sort of structural, is you should think of this industry as closer to a global structural oligopoly rather than just, oh, if we throw a bunch of money at dozens of sites and businesses, we can form a supply chain. Because the reality is, is that to have the geology, you know, we talked through the geology and the differences between lights and heavies and then the complexity of the magnet business. And when you add all that up, I mean, the best analogies are if, you know, if you were going into the aircraft production industry or the smartphone industry, you know, would, you know, think of our great companies like Apple and Boeing, right? You wouldn't necessarily say, if let's say it was reversed and you were trying to create those and the Chinese had the competitor, you wouldn't necessarily say, let's spread money around to 30 different things.

Executive Name (Title): Ryan (CEO)

So I think the way to think about it though is, we view MP as America's national champion. We have structural advantage because we're fully vertically integrated. We're years and billions ahead of others. And what I would say is if you, you know, there's various projects out there, both public and private. If you took anything that I'm aware of, now there may be a bunch of stuff I'm not aware of, but anything I'm aware of, if you gave whatever that was, the deal that MP had, I don't see anywhere where there's any equity value for any of them, public or private. Now, so I think that's a very interesting thing. Now, that doesn't mean that the government shouldn't catalyze a lot because I think the government is doing an outstanding job catalyzing private capital to come in. And so to the extent that the government can make investments, whether it's loans or other forms of support and grants, if X dollars of capital can stimulate two or three X in private capital, they should be doing that as much as possible. So I think we've seen some really great action out of the administration. And so my advice would be to keep going, keep doing what you're doing.

I think they're really thinking about it a thoughtful way. I would just also say that the message of today is, you know, for private investors, because obviously we don't want people to get burned. We want people to think that this is a good space is to just be very clear eyed about what the actual structural economics are in, you know, in amidst all the excitement.

Analyst Name (Firm): Max Yarrow (BMO Capital Markets) Executive Name (Title): Ryan (CEO)

Thank you, Brian and Michael. Thanks for taking my question this afternoon. My question is around the ramp up of the heavy rare separation facility. And I was just wondering if the ramp up time there affects your ability to deliver certain higher grade magnets to general motors. And then I guess the second part is when we look at the universe of potential feed stocks for that heavy rare separation. Are there types of concentrates that you cannot process and which ones are the most ideal for the circuit that you envision?

Yeah, sure, Max. It's Ryan. I'll start. In terms of how we're positioned from a supply chain and inventory perspective to support our ramp up at Magnetics, I think we've discussed over the last several quarters that we had anticipated some of the restrictions that had been put in place and have built a stockpile of products to allow us to commission and ramp the Independence facility. We've timed the construction and commissioning of the heavyware separation circuit to come online to support further growth as we work that inventory position down. I'll let Michael take the second part.

Executive Name (Title): Michael (COO)

Just to be clear, the question was on whether types of feedstocks for the heavy risk circuit are preferred?

Analyst Name (Firm): Max Yarrow (BMO Capital Markets) Executive Name (Title): Michael (COO)

Exactly. Certainly, to the extent we got an SEG+, that would be easier than processing a full mixed rare earth carbonate with light sand heavies. But our circuit can handle, because we have all of the capabilities, either one of those. So it will look at the economics and the distribution and compare those to other alternatives. Thank you. Appreciate you taking my question. I'll turn it back.

Analyst Name (Firm): Lawrence Alexander (Jefferies) Executive Name (Title): Ryan (CEO)

So good afternoon. I appreciate kind of the analogies you've tossed out. And I guess what I want to tease out as you talk about your opportunistic approach to creating value is the Cold War would have gone very differently if the nuclear missiles had a 10-year expiry date. And so when you think about the incentives that a 10-year support program from the DOD, D-O-W, gives you, and also the way the capital markets might perceive that as setting you up for some severe kind of cyclical risk if there's a recession or otherwise a glut at the end of the 10-year period. And what that does to your cost of capital and how you think about your balance sheet is the strategy here to...

Executive Name (Title): Ryan (CEO)

...double down on the fortress balance sheet, vertical integration, and just ride through that transition? Or do you feel either the government needs to make a decision soon about extending the support, or you need to make a decision arguably sooner rather than later about adding a second plank to sort of smooth out volatility once you make the transition back into a fully unsupported entity?

So Lawrence, I think it's actually the opposite. There's probably, I don't know how many listeners we have today because there's another exciting call happening where there's a trillion dollar pay plan being proved because we're going to have humanoid robots, whether it's Musk or Jensen talking about that. I mean, if we look out and I don't know if it's five, 10 years, whatever it is, but there's no question that physical AI is going to just create explosive growth in rare earth magnetics. The issue is that in the very short term, we can't be leveraged by the Chinese from a supply chain standpoint. We've got to have an industry that is here and thriving. And actually, if you take my remarks, I want to be clear that when I talk about the structural realities, it's not because that is a forever condition. I do think that there's room for a lot of other players and a lot of other supply. But I think that the point is that to get to that five or 10 years, you're going to need materially higher prices. So sort of the MP deal, if you will, I just don't think that's enough.

And so I think that what you're really going to see is that in the very short term, the administration has made sure that we have a successful national champion in MP. We've got to execute. But we are going to sort of open the pave the path if you will to then figure out how there's much broader supply coming online so obviously 10 years is a long enough time to not, you know, not in the short term think about kind of what that role looks like we'll think about the next couple years of getting things online but I think if we don't have some development in physical AI by then, the markets, I would be least worried about MP relative to pretty much many other places in the market. So I don't lose any sleep over what demand is going to look like in 10 years and what NDPR prices and magnetics prices are going to be. I think it's going to be amazing for us. My bigger guess is that we'll have grown our business and moved downstream, you know, just as if you think about us five years ago versus where we are today. I think on that roll date, you know, it will not be as material a portion of our business remotely compared to what it is today.

Executive Name (Title): Management

Perfect. Thank you. That concludes the question and answer portion of today's call. I'll now call the back for closing remarks.

Executive Name (Title): Management

All right, well, thank you, everyone. We think it was a great quarter of execution. We are going to get back to work and look forward to talking to you all next quarter.