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What changed in MP Materials Corp. / DE's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MP Materials Corp. / DE's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+559 added−500 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in MP Materials Corp. / DE's 2024 10-K

559 paragraphs added · 500 removed · 376 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

77 edited+25 added−26 removed39 unchanged
Biggest changeFor example, operations and maintenance workers go through specific Lock Out/Tag Out/Try Out training, confined-space work and rescue, forklift classroom, and in-the-field training. In total, during 2023, the Company’s employees completed over 22,000 hours of new hire and/or annual refresher training and 1,600 hours of emergency medical response training, including first aid and CPR.
Biggest changeFollowing their initial training, depending on their job classification, new employees complete targeted online and supervised field training specific to their roles and responsibilities. For example, operations and maintenance workers go through specific Lock Out/Tag Out/Try Out training, confined-space work and rescue, and forklift classroom and in-the-field training.
As the Company increases production of separated products over time, it expects to improve the Company’s per-unit costs of NdPr oxide, which represents a majority of the value contained in the Company’s concentrate.
As the Company increases production of separated products over time, it expects to improve the Company’s per-unit production costs of NdPr oxide, which represents a majority of the value contained in the Company’s concentrate.
Under the Offtake Agreement, Shenghe is contractually obligated to purchase the Company’s rare earth concentrate product meeting certain minimum specifications as the exclusive distributor in China on a “take-or-pay” basis (such that they are obliged to pay for product even if they are unable or unwilling to take delivery), with certain exceptions for the Company’s direct sales globally.
Under the 2024 Offtake Agreement, Shenghe is contractually obligated to purchase the Company’s rare earth concentrate product meeting certain minimum specifications as the exclusive distributor in China on a “take-or-pay” basis (such that they are obliged to pay for product even if they are unable or unwilling to take delivery), with certain exceptions for the Company’s direct sales globally.
The Company’s mission is to maximize stockholder returns over the long-term by executing a disciplined business strategy to restore the full rare earth supply chain to the United States of America. The Company believes it will generate positive outcomes for U.S. national security and industry, the U.S. workforce, and the environment.
The Company’s mission is to maximize stockholder returns over the long-term by executing a disciplined business strategy to restore the full rare earth magnetics supply chain to the United States of America. The Company believes it will generate positive outcomes for U.S. national security and industry, the U.S. workforce, and the environment.
At the core of the Company’s success is the relentless pursuit to maintain and nurture an owner-operator culture that instills an entrepreneurial spirit where its employees feel motivated and empowered to deliver results through an unwavering commitment to doing what is right in a safe environment.
At the core of the Company’s success is the relentless pursuit to maintain and nurture an owner-operator culture that instills an entrepreneurial spirit where employees feel motivated and empowered to deliver results through an unwavering commitment to doing what is right in a safe environment.
Mr. Litinsky is the Founder, Chairman and Chief Executive Officer of MP Materials. Mr. Litinsky is also the Founder, Chief Executive Officer and Chief Investment Officer of JHL Capital Group LLC (“JHL”), an alternative investment management firm. Before founding JHL in 2006, he was a member of the Drawbridge Special Opportunities Fund at Fortress Investment Group.
Mr. Litinsky is the Founder, Chairman and Chief Executive Officer of MP Materials. Mr. Litinsky is also the Founder, Chief Executive Officer and Chief Investment Officer of JHL Capital Group LLC (“JHL”), an alternative investment management firm. Before founding JHL in 2006, he was a member of the Drawbridge Special Opportunities Fund at Fortress Investment Group (“Fortress”).
Rare earth materials are used in a diverse array of end markets, including: • Electric Mobility: traction motors in passenger xEVs, commercial xEVs, special purpose vehicles, two-wheelers, and other applications; • Renewable Power Generation: wind power generators, for on- and offshore applications; • Energy-Efficient Motors, Pumps and Compressors: heating, ventilation and air conditioning (“HVAC”) systems, elevators, escalators, consumer appliances and other industrial applications; • Industrial and Service Robotics: motors, actuators, brakes and sensors used in industrial robots and welders, as well as service robots; • Consumer and Medical Applications: smart phones, tablets, laptops, hard disk drives, audio speakers, microphones, cameras, printers, cordless power tools as well as fiber optics, laser crystals, x-ray equipment, prostheses, dental crowns and more; • Critical Defense Systems: guidance and control systems, communications, avionics, global positioning systems, radar and sonar, drones, thermal barrier coatings and firearms; and • Catalysts and Phosphors: catalysts for vehicle emissions reduction and fuel refining, as well as phosphors for energy-efficient lighting and counterfeit currency detection.
Rare earth materials are used in a diverse array of end markets, including: • Electric Mobility: traction motors in passenger xEVs, commercial xEVs, special purpose vehicles, two-wheelers, and other applications; • Industrial, Consumer and Professional Service Robotics: motors, actuators, brakes and sensors used in industrial robots and welders, as well as consumer, service and humanoid robots; • Renewable Power Generation: wind power generators, for on- and offshore applications; • Energy-Efficient Motors, Pumps and Compressors: heating, ventilation and air conditioning (“HVAC”) systems, elevators, escalators, consumer appliances and other industrial applications; • Consumer and Medical Applications: smart phones, tablets, laptops, hard disk drives, audio speakers, microphones, cameras, printers, cordless power tools as well as fiber optics, laser crystals, x-ray equipment, prostheses, dental crowns and more; • Critical Defense Systems: guidance and control systems, communications, avionics, global positioning systems, radar and sonar, drones, thermal barrier coatings and firearms; and • Catalysts and Phosphors: catalysts for vehicle emissions reduction and fuel refining, as well as phosphors for energy-efficient lighting, backlighting and counterfeit currency detection.
A confluence of geopolitical and economic factors is causing downstream customers, such as automotive original equipment manufacturers (“OEMs”), to be increasingly focused on supply risk, highlighting the need to develop domestic production of REE and related products.
A confluence of geopolitical and economic factors is causing downstream customers, such as automotive and industrial original equipment manufacturers (“OEMs”), to be increasingly focused on supply risk, highlighting the need to develop domestic production of REE and related products.
Together, these changes materially increased plant uptime and reliability driving enhanced flotation throughput, REO recovery and production as well as tailings facility reliability and throughput at a lower cost per processed ton.
Together, these changes have materially increased plant uptime and reliability driving enhanced flotation throughput, REO recovery and production as well as tailings facility reliability and throughput at a lower cost per processed ton.
Environmental and Regulatory Matters The Company is subject to numerous federal, state and local environmental laws, certifications, regulations, permits, and other legal requirements applicable to the mining and mineral processing industry, including, without limitation, those pertaining to employee health and safety, air quality standards and emissions, water usage, wastewater and stormwater discharges, GHG emissions, hazardous and radioactive and other waste management, storage and handling of naturally occurring radioactive material, plant and wildlife protection, remediation of contamination, land use, reclamation and restoration of properties, procurement of certain materials used in the Company’s operations, groundwater quality and the use of explosives.
Environmental and Regulatory Matters The Company is subject to numerous federal, state and local environmental laws, certifications, regulations, permits, and other legal requirements applicable to the mining, mineral processing industry, and magnetics manufacturing industries including, without limitation, those pertaining to employee health and safety, air quality standards and emissions, water usage, wastewater and stormwater discharges, GHG emissions, hazardous and radioactive and other waste management, storage and handling of naturally occurring radioactive material, plant and wildlife protection, remediation of contamination, land use, reclamation and restoration of properties, procurement of certain materials used in the Company’s operations, groundwater quality and the use of explosives.
MP Materials is dedicated to the continual training and development of its employees, especially of those in field operations, to ensure the Company develops future managers and leaders from within its organization. The training starts on an employee’s first day with on-boarding procedures that focus on safety, responsibility, ethical conduct and inclusive teamwork.
MP Materials is dedicated to the continual training and development of its employees, especially of those in field operations, to ensure the Company develops future managers and leaders from within its organization. The training starts on an employee’s first day with on-boarding procedures that focus on safety, responsibility, ethical conduct, and collaborative teamwork.
The Company is also pursuing sales opportunities to other customers for its future magnet products. Suppliers The Company uses certain proprietary chemical reagents in its flotation process, which it currently purchases from third-party suppliers. The hydrometallurgy, separations, and product finishing processes are reliant upon certain commodity reagents.
The Company is also pursuing sales opportunities to other customers for its future magnet products. Suppliers The Materials segment uses certain proprietary chemical reagents in its flotation process, which it currently purchases from third-party suppliers. The hydrometallurgy, separations, and product finishing processes are reliant upon certain commodity reagents.
Additionally, on August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022, which, among other things, provides several tax incentives to promote clean energy adoption, including tax credits on the purchase of xEVs and the production of certain critical minerals such as NdPr oxide.
Additionally, in August 2022, the U.S. government enacted the Inflation Reduction Act of 2022, which, among other things, provides several tax incentives to promote clean energy adoption, including tax credits on the purchase of xEVs and the production of certain critical minerals such as NdPr oxide.
Since restarting operations from cold-idle status, the Company implemented changes in the milling, flotation and tailings management processes; implemented and continue to advance an improved reagent scheme to improve mineral recovery; and implemented operational best practices.
Since restarting operations from cold-idle status, the Company implemented changes in the milling, flotation and tailings management processes; implemented and continue to advance an improved reagent scheme to enhance mineral recovery; and implemented operational best practices.
Future laws, regulations, permits or legal requirements, as well as the interpretation or enforcement of existing requirements, may require substantial increases in capital or operating costs to achieve and maintain compliance or otherwise delay, limit or prohibit operations, or other restrictions upon the Company’s current or future operations, or result in the imposition of fines and penalties for failure to comply.
Future laws, regulations, permits or legal requirements, as well as the re-interpretation or change in enforcement of existing requirements, may require substantial increases in capital or operating costs to achieve and maintain compliance or otherwise delay, limit or prohibit operations, or impose other restrictions upon the Company’s current or future operations, or result in the imposition of fines and penalties for failure to comply.
Prior to Fortress, he was a Director of Finance at Omnicom Group, and he worked as a merchant banker at Allen & Company. Mr. Litinsky received a B.A. in Economics from Yale University, cum laude, and a J.D./M.B.A. from the Northwestern University School of Law and the Kellogg School of Management. He was admitted to the Illinois Bar. Mr.
Prior to Fortress, he was a Director of Finance at Omnicom Group, and he worked as a merchant banker at Allen & Company. Mr. Litinsky received a B.A. in Economics from Yale University, cum laude, and a J.D./M.B.A. from the Northwestern University School of Law and the Kellogg School of Management.
Without MP Materials’ conscientiously-mined materials, not only will the future of low-carbon technologies depend on more highly polluting traditional production methods, but the advanced research and development related to these vital applications and their manufacturing will continue to follow that supply overseas.
Without MP Materials’ conscientiously-mined materials, not only will the future of magnetic technologies depend on more highly polluting traditional production methods, but the advanced research and development related to these vital applications and their manufacturing will continue to follow that supply overseas.
MP Materials is committed to maintaining a strong safety culture and continuing to emphasize the importance of its employees’ role in identifying, mitigating and communicating safety risks.
MP Materials is committed to maintaining a strong safety culture and continues to emphasize the importance of its employees’ role in identifying, mitigating and communicating safety risks.
(“Adamas”). Further, Adamas estimates that the NdPr segment of the REO market, which makes up a significant majority of the market value, is expected to grow at an 8.5% CAGR through 2035 (excluding the impact of swarf recycling), well in excess of the overall REO market. This expected growth will be driven by secular growth in demand for NdPr magnets.
(“Adamas”). Further, Adamas estimates that the NdPr segment of the REO market, which makes up a significant majority of the market value, is expected to grow at an 8.4% CAGR through 2040 (excluding the impact of swarf recycling), well in excess of the overall REO market. This expected growth will be driven by secular growth in demand for NdPr magnets.
These chemicals are subject to pricing volatility, supply availability and other restrictions and guidelines. In the event of a supply disruption or any other restriction, the Company believes that alternative reagents could be sourced for certain processes.
These chemicals are subject to pricing volatility, supply availability and other restrictions and guidelines. In the event of a supply disruption or any other restriction, the Company believes that alternative reagents could be sourced for certain 7 Table of Contents processes.
Complying with these regulations is complicated and requires significant attention and resources. The Company expects to continue to incur significant sums for ongoing operating environmental expenditures, including salaries, and the costs for monitoring, compliance, remediation, reporting, pollution control equipment and permitting.
Complying with these regulations is complicated and requires significant attention and resources. The Company expects to continue to incur significant sums for ongoing environmental matters, including salaries, and expenditures for monitoring, compliance, remediation, reporting, pollution control equipment and permitting.
MP Materials understands that our natural resources, such as water, are precious and limited. As such, the Company is committed to limiting resource consumption, increasing efficiency, and achieving as light of an environmental footprint as possible.
MP Materials understands that our natural resources, such as water, are precious and limited. As such, the Company is committed to limiting resource consumption, increasing efficiency, and achieving as light of an environmental 6 Table of Contents footprint as possible.
Through its upstream operations (“Stage I”) (discussed below), which are comprised of the first two of these process steps, the Company produces rare earth concentrate that is marketed to refiners via a distribution arrangement.
Through its upstream operations (“Stage I”), which are comprised of the first two of these process steps, the Company produces rare earth concentrate that is marketed to refiners primarily via a distribution arrangement.
In November 2023, the Company announced its “Upstream 60K” strategy whereby the Company intends to grow its annual REO Production Volume to approximately 60,000 MTs by expanding upstream capacity via investments in further beneficiation, including the ability to process alternative feedstocks and upgrade lower-grade feedstocks.
In November 2023, the Company announced its “Upstream 60K” strategy whereby the Company intends to grow its annual REO Production Volume to approximately 60,000 MTs by expanding upstream capacity via investments in further 2 Table of Contents beneficiation, including the ability to process alternative feedstocks and upgrade lower-grade feedstocks.
Additionally, as of December 31, 2023, 49% of the Company’s workforce was composed of underrepresented minorities. Employee Engagement and Development Employee engagement efforts are critical in ensuring all employees feel heard, respected and valued, and that applicable actions are taken when feedback is received.
Additionally, as of December 31, 2024, 51% of the Company’s workforce was composed of underrepresented minorities. Employee Engagement and Development Employee engagement efforts are critical in ensuring all employees feel heard, respected, and valued, and that applicable actions are taken when feedback is received.
Environmental laws and regulation continue to evolve which may require the Company to meet stricter standards and give rise to greater enforcement, result in increased fines and penalties for non-compliance, and result in a heightened 7 Table of Contents degree of responsibility for companies and their officers, directors and employees.
Environmental laws and regulations continue to evolve which may require the Company to meet stricter standards and give rise to greater enforcement, result in increased fines and penalties for non-compliance, and result in a heightened degree of responsibility for companies and their officers, directors and employees.
Information About Our Executive Officers The persons serving as executive officers of MP Materials and their positions with the Company are as follows: Name Age Position James H. Litinsky 46 Chairman of the Board and Chief Executive Officer Michael Rosenthal 45 Chief Operating Officer Ryan Corbett 34 Chief Financial Officer Elliot Hoops 49 General Counsel and Secretary James H. Litinsky.
Information About Our Executive Officers The persons serving as executive officers of MP Materials and their positions with the Company are as follows: Name Age Position James H. Litinsky 47 Chairman of the Board and Chief Executive Officer Michael Rosenthal 46 Chief Operating Officer Ryan Corbett 35 Chief Financial Officer Elliot Hoops 50 General Counsel and Secretary James H. Litinsky.
An employee retention rate of 95% or higher, which was achieved in every calendar quarter during 2023, continues to demonstrate the Company’s priorities of ensuring its team is healthy, incentivized, proud to work for MP Materials, and believes in the Company’s mission.
An employee retention rate of approximately 95% was achieved in every calendar quarter during 2024, which continues to demonstrate the Company’s priorities of ensuring its team is healthy, incentivized, proud to work for MP Materials, and believes in the Company’s mission.
The NdPr oxide that the Company began producing in the third quarter of 2023 at Mountain Pass is essential to the permanent magnet motor technology deployed in a significant majority of current xEVs. In addition, the Company believes end consumers will demand that the materials used to build these vehicles be extracted sustainably. MP Materials is committed to environmental responsibility.
The NdPr oxide that the Company produces at Mountain Pass is essential to the permanent magnet motor technology deployed in a significant majority of current xEVs. In addition, the Company believes end consumers will demand that the materials used to build these vehicles be extracted sustainably. MP Materials is committed to environmental responsibility and sustainability.
The Company aims to achieve this initiative within the next four years with modest incremental capital investment. 2 Table of Contents Stage II Stage II advanced the Company’s operations from the production of rare earth concentrate to the separation of individual REE.
The Company aims to achieve this initiative within the next three years with modest incremental capital investment. Midstream Operations - Stage II Stage II advanced the Company’s operations from the production of rare earth concentrate to the separation of individual REE.
Employees Since relaunching production at Mountain Pass in July 2017, the Company has increased its full-time equivalent (“FTE”) employee base from eight contractors in 2017 to 681 employees as of December 31, 2023, of which approximately 81% were field-based employees. This represents a 40% increase of FTE employees in 2023, on top of a 33% increase in 2022.
Employees Since relaunching production at Mountain Pass in July 2017, the Company has increased its full-time equivalent (“FTE”) employee base from eight contractors in 2017 to 804 employees as of December 31, 2024, of which approximately 83% were field-based employees. This represents an 18% increase of FTE employees in 2024, on top of a 40% increase in 2023.
As the only scaled source in North America for critical rare earths, with a processing footprint designed to operate with best-in-class sustainability and an industry-leading cost structure, the Company believes it is well-positioned to thrive as the global economy electrifies.
As the only scaled source in North America for critical rare earths, with a processing footprint designed to operate with best-in-class sustainability and an industry-leading cost structure, the Company believes it is well-positioned to thrive as the global economy electrifies and as the United States prioritizes domestic manufacturing and secure supply chains.
The REE in the Mountain Pass ore body are contained primarily within bastnaesite and related minerals in which LREE are most abundant. 1 Table of Contents The aggregate global market for rare earth oxides (“REO”) totaled approximately 209,000 metric tons (“MTs”) in 2023 and is expected to grow at a compound annual growth rate (“CAGR”) of approximately 6.1% through 2035, according to research by Adamas Intelligence Inc.
The REE in the Mountain Pass ore body are contained primarily within bastnaesite and related minerals in which LREE are predominant. 1 Table of Contents The aggregate global market for rare earth oxides (“REO”) totaled approximately 226,000 metric tons (“MTs”) in 2024 and is expected to grow at a compound annual growth rate (“CAGR”) of approximately 5.9% through 2040, according to research by Adamas Intelligence Inc.
MP Materials strongly encourages the reporting of near-miss incidents so that it can mitigate hazards or change procedures to improve workforce safety in advance of any actual incident. As of December 31, 2023, the Company had completed over 1,300 days without a lost-time injury.
The Company tracks lost time injuries, recordable injuries, recordable injury rates, and near-miss reports. MP Materials strongly encourages the reporting of near-miss incidents so that it can mitigate hazards or change procedures to improve workforce safety in advance of any actual incident. As of December 31, 2024, the Company had completed over 1,700 days without a lost-time injury.
Patents, Trademarks and Licenses The Company relies on a combination of trade secret protection, nondisclosure and licensing agreements, patents and trademarks to establish and protect its proprietary intellectual property rights. The Company utilizes trade secret protection and nondisclosure agreements to protect its proprietary rare earth technology. Competition The rare earth mining and processing markets are capital intensive and highly competitive.
Patents, Trademarks and Licenses The Company relies on a combination of trade secret protection, nondisclosure and licensing agreements, patents and trademarks to establish and protect its proprietary intellectual property rights. The Company utilizes patents, trade secret protection and nondisclosure agreements to protect its proprietary rare earth technology.
As of December 31, 2023, based on employees’ self-reporting, veterans and women represented 4% and 17%, respectively, of the Company’s workforce and 21% of managerial or supervisory positions were occupied by women. As of December 31, 2023, women represented 28% 5 Table of Contents of the Company’s Board of Directors.
As of December 31, 2024, based on employees’ self-reporting, veterans and women represented 4% and 15%, respectively, of the Company’s workforce and 20% of managerial or supervisory positions were occupied by women. As of December 31, 2024, women represented 28% of the Company’s Board of Directors.
Diversity, Inclusion and Meritocracy MP Materials believes that a diverse, inclusive and meritocratic workforce and Board of Directors produces better overall decision-making for employees, which benefits the organization. In addition to hiring employees with requisite skills, the Company has taken steps and will continue to strive to assemble a diverse and inclusive workforce.
Diversity and Meritocracy MP Materials believes that a diverse and meritocratic workforce and Board of Directors produces better overall decision-making for employees, which benefits the organization. In prioritizing hiring employees with the requisite skills, the Company continues to assemble a diverse workforce.
Corbett was a member of alternative asset managers Brahman Capital Corp. and King Street Capital Management LP, both based in New York, where he focused on special situations investments across the capital structure. Mr.
Prior to joining MP Materials, he was a Managing Director at JHL, where he focused on JHL’s investment in MP Materials. Before JHL, Mr. Corbett was a member of alternative asset managers Brahman Capital Corp. and King Street Capital Management LP, both based in New York, where he focused on special situations investments across the capital structure. Mr.
The information contained on its website, or accessible from its website, is not incorporated into, and should not be considered part 8 Table of Contents of, this Form 10‑K or any other documents the Company files with, or furnishes to, the SEC.
The Company’s Code of Business Conduct and Ethics is also available on the investor relations section of its website. The information contained on its website, or accessible from its website, is not incorporated into, and should not be considered part of, this Form 10‑K or any other documents the Company files with, or furnishes to, the SEC.
During the third quarter of 2023, the Company began producing separated rare earth products. However, the Company expects that it may take several quarters to achieve its designed throughput of separated products.
During the second half of 2023, the Company began producing separated rare earth products. However, the Company continues to expect that it may take many quarters to achieve its designed throughput of separated products.
In addition, in the fourth quarter of 2023, the Company began utilizing a tolling partner in Southeast Asia to process the Company’s NdPr oxide into NdPr metal for delivery to the Company’s customers globally.
Additionally, beginning in the fourth quarter of 2023, the Company utilizes tolling partners in Southeast Asia to process the Company’s NdPr oxide into NdPr metal for delivery to the Company’s customers globally.
Ltd. (“Shenghe”) under the terms of the Offtake Agreement, which became effective in March 2022. Shenghe is an indirect majority-owned subsidiary of Shenghe Resources Holding Co., Ltd., a leading global rare earth company listed on the Shanghai Stock Exchange.
Shenghe is an indirect majority-owned subsidiary of Shenghe Resources Holding Co., Ltd., a leading global rare earth company listed on the Shanghai Stock Exchange.
Lastly, the Company is establishing downstream (“Stage III”) capabilities at its Fort Worth Facility to convert a portion of the REO produced at Mountain Pass into rare earth magnets and its precursor products to be marketed directly to end users.
Lastly, the Company is establishing downstream capabilities (“Stage III”) at Independence to convert a portion of the REO produced at Mountain Pass into rare earth magnets and its precursor products to be marketed directly to end users. The Company’s Materials segment includes both upstream and midstream operations, while the downstream operations constitute the Magnetics segment.
To ensure the ongoing safety of employees and any contractors working on-site, the Company has a clear set of health and safety guidelines in place and routinely conducts general as well as equipment- and process-specific safety training. The Company believes that the achievement of superior safety performance is both an important short-term and long-term strategic imperative in managing its operations.
To ensure the ongoing safety of employees and any contractors working on-site, the Company has a clear set of health and safety guidelines in place and routinely conducts general as well as equipment- and process-specific safety training.
Successful completion of this project will establish, for the first time in many years, commercial-scale processing and separation of HREE in support of commercial and defense applications in the U.S.
Successful completion of this project will establish, for the first time in many years, commercial-scale processing and separation of HREE in support of commercial and defense applications in the U.S. The HREE processing and separations facility (the “HREE Facility”) will be built at Mountain Pass and will be integrated into the rest of the Company’s facilities.
Stage I Following the acquisition of Mountain Pass in July 2017, the Company began implementing Stage I, which was designed to re-establish stable, scaled production of rare earth concentrate leveraging the site’s existing processing facility. Stage I includes the mining of primarily bastnaesite ore followed by comminution, which involves crushing and grinding the ore into a milled slurry.
Upstream Operations - Stage I Following the acquisition of Mountain Pass in July 2017, the Company began implementing Stage I, which was designed to re-establish stable and scaled production of rare earth concentrate by leveraging the site’s existing processing facilities.
Lanthanum, cerium, praseodymium, neodymium and promethium are considered “light” REE (“LREE”); samarium, europium and gadolinium are often referred to as “medium” REE; while terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium are considered “heavy” REE (“HREE”). Two additional elements, yttrium and scandium, are often classified as HREE although they are not lanthanides.
The REE group includes 17 elements, primarily the 15 lanthanide elements. Lanthanum, cerium, praseodymium, neodymium and promethium are considered “light” REE (“LREE”); samarium, europium and gadolinium are often referred to as “medium” REE; while terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium are considered “heavy” REE (“HREE”).
MP Materials is restoring the resource independence of the U.S.— removing the single point-of-failure in the supply chain for these products and ensuring that American industry can determine its own future in the automotive, robotics, aerospace, renewable energy, and information technologies industries. 6 Table of Contents Customers Currently, the Company sells the vast majority of its rare earth concentrate to Shenghe Resources (Singapore) International Trading Pte.
MP Materials is restoring the resource independence of the U.S.— removing the single point-of-failure in the supply chain for these products and ensuring that American industry can determine its own future in the automotive, robotics, aerospace, renewable energy, and information technology industries.
Then, the milled bastnaesite slurry is processed by froth flotation, whereby the bastnaesite is carried to the surface while the gangue, or non-desired, elements are suppressed and disposed as tailings.
The upstream operations include the mining of primarily bastnaesite ore followed by comminution, which involves crushing and grinding the ore into a milled slurry. Then, the slurry is processed by froth flotation, whereby the bastnaesite is carried to the surface while the gangue, or non-desired, elements are suppressed and disposed as tailings.
The Company produces rare earth concentrate products as well as refined rare earth oxides and related products.
The Materials segment operates Mountain Pass, which produces refined rare earth oxides and related products as well as rare earth concentrate products.
With continued state-sponsored consolidation, there remain two major rare earth groups in China. These groups and their affiliates control (and/or allocate to unaffiliated third parties) substantially all of China’s quota for concentrate production and rare earth refining. Outside of China, there are few other producers operating at scale, with processing capabilities located in Australia and Malaysia.
Competition The rare earth mining, processing, and magnetics manufacturing markets are capital-intensive and highly competitive. With continued state-sponsored consolidation, there remain two major rare earth groups in China. These groups and their affiliates control (and/or allocate to unaffiliated third parties) substantially all of China’s quota for concentrate production and rare earth refining.
The Company intends to enter into other short- and long-term sales contracts with existing and new customers for separated rare earth products. In April 2022, as discussed above, the Company entered into a long-term agreement with GM to supply magnets and related products manufactured at the Fort Worth Facility.
The Company also regularly enters into short- and long-term sales contracts with other customers for the sale of its rare earth concentrate and separated rare earth products. Magnetics Segment In April 2022, as discussed above, the Company entered into a long-term agreement to supply magnets and precursor products manufactured at the Independence Facility to GM as its foundational customer .
By offering magnet customers a complete, end-to-end Western supply chain solution, the Company believes vertical integration represents a material incremental value creation opportunity. The Company believes that the ability to capture significant value from magnet production requires a scaled, steady supply of NdPr, which the Company believes it is uniquely positioned to provide in the Western Hemisphere.
By offering magnet customers a complete, end-to-end Western supply chain solution, the Company believes vertical integration represents a material incremental value creation opportunity, which the Company is uniquely positioned to provide given its ownership of Mountain Pass.
Before MP Materials, he was a Partner at QVT Financial (“QVT”), an investment management firm. At QVT, Mr. Rosenthal concentrated on investments in the global automotive sector and in China. Prior to joining QVT, he worked as a senior high yield credit analyst for Shenkman Capital Management. Mr.
Rosenthal concentrated on investments in the global automotive sector and in China. Prior to joining QVT, he worked as a senior high yield credit analyst for Shenkman Capital Management. Mr. Rosenthal graduated from Duke University with an A.B. degree in Economics and Comparative Area Studies. Ryan Corbett. Mr. Corbett joined MP Materials as its Chief Financial Officer in 2019.
The low-volume nature of rare earth mining coupled with the exceptional scale and quality of the ore body results in a resource with significant viability well into the future.
More than 60 years of operations at Mountain Pass have demonstrated that the Company’s ore body is one of the world’s largest and highest-grade rare earth resources. The low-volume nature of rare earth mining coupled with the exceptional scale and quality of the ore body results in a resource with significant viability well into the future.
In the fourth quarter of 2023, the Company achieved professional certification for its engagement efforts, and will continue its focus on providing opportunities for employees to interact with executive management through events such as virtual town hall sessions, family days and routine stand-up briefings. Methodical execution is key to ensuring Company goals are achieved and exceeded.
The Company continues to hold events where collaboration occurs and contributions are recognized while continuing its focus on providing opportunities for employees to interact with executive management through events such as in-person sessions, milestone celebrations, and routine stand-up briefings. Methodical execution is key to ensuring Company goals are achieved and exceeded.
The initial term of the New Offtake Agreement is two years, with the option for the Company to extend the term for an additional one-year period. The terms of the New Offtake Agreement are substantially the same as those of the Offtake Agreement with the exception of the addition of NdPr metal into the definition of non-concentrate rare earth products.
The terms of the 2024 Offtake Agreement are substantially the same as those of the 2022 Offtake Agreement with the exception of the addition of NdPr metal into the definition of non-concentrate rare earth products.
In addition, the U.S. government is actively seeking to end the country’s reliance on foreign REE sources, and the Company believes that its constructive relationship with key regulatory agencies and the relative stability of U.S. policies provide it with an advantage relative to non-U.S. REE producers.
The Company aims to provide users of rare earths a U.S. alternative that helps avoid the risks associated with the single point-of-failure that Chinese producers represent. In addition, the U.S. government is actively seeking to end the country’s reliance on foreign REE sources, and the Company believes that this provides it with an advantage relative to non-U.S. REE producers.
Further, the Company believes businesses are increasingly prioritizing diversification and security of their global supply chains to reduce reliance on a single producer or region for critical materials.
Our integrated operations at Mountain Pass combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability. The Company believes businesses are increasingly prioritizing diversification and security of their global supply chains to reduce reliance on a single producer or region for critical materials.
None of the Company’s employees are subject to any collective bargaining agreements. The Company is committed to creating employment opportunities for U.S. workers, and with the completion of the initial commissioning of Stage II, the Company has added approximately 200 employees over the past two years.
None of the Company’s employees are subject to any collective bargaining agreements. The Company continues to advance its commitment to creating employment opportunities for U.S. workers and has added over 300 employees across the past two years, including 56 employees at the Independence Facility during 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ) has exceeded 8,500 MTs, and the Company has achieved at least 40,000 MTs of annual REO Production Volume since 2021. The Company’s Stage I optimization plan enabled it to achieve what the Company believes to be world-class production cost levels for rare earth concentrate.
Following the implementation of the Company’s Stage I optimization plan, the Company has achieved at least 40,000 MTs of annual REO Production Volume (as defined in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ) since 2021.
Throughout 2023, in living up to the owner-operator culture, all employees received a time-vested equity grant at the time of joining the Company. The Company believes equity ownership reinforces the employees’ sense of their contribution to the Company’s success.
In order to promote MP Materials’ owner-operator culture, every employee receives a discretionary grant of time-vested restricted stock units after joining the Company. The Company believes equity ownership reinforces the employees’ sense of their contribution to the Company’s success.
Furthermore, Stage II was designed to enable the Company to continue to manage its cost structure for separating REE through an optimized facility process flow. This process flow allows the Company to use less energy and raw materials per ton of separated REO.
The Company’s production achievements in Stage I have provided economies of scale to lower production costs per unit of REO produced in concentrate. Furthermore, Stage II was designed to enable the Company to continue to manage its cost structure for separating REE through an optimized facility process flow.
The rare earth concentrate is principally sold pursuant to the Offtake Agreement (as defined in Note 20 , “Related Party Transactions,” in the notes to the Consolidated Financial Statements) to Shenghe (as defined in the “Customers” section below), that, in turn, typically sells that product to refiners in China.
The Materials segment primarily generates revenue from (i) sales of rare earth concentrate, which is principally sold pursuant to the Offtake Agreements (as defined in Note 19 , “Related-Party Transactions,” in the notes to the Consolidated Financial Statements) to Shenghe (as defined in the “ Customers ” section below), that, in turn, typically sells that product to refiners in China, and (ii) sales of separated rare earth products, including neodymium-praseodymium (“NdPr”) oxide, primarily to customers in Japan, South Korea, and broader Asia.
The Company is currently pursuing vertical integration through further downstream processing of REO into finished magnet products and precursor materials, and incorporating process waste and end-of-life magnet recycling. The Company intends to accomplish this through a buy, build and/or joint venture strategy to achieve technical and cost leadership.
At Independence, with GM as a foundational customer, the Company is pursuing vertical integration through further downstream processing of REO into finished rare earth magnets and precursor products, and incorporating process waste and end-of-life magnet recycling.
By economic value, NdPr is the largest segment of the REE market. NdPr is primarily used in NdFeB permanent magnets for EV traction motors, wind power generators, drones, robotics, electronics and a growing list of other applications.
NdPr is primarily used in neodymium-iron-boron (“NdFeB”) permanent magnets for electric machines such as EV traction motors, wind power generators, drones, robotics, electronics and a growing list of other applications. The rapid growth of these and other end-use markets is expected to drive substantial demand growth for NdPr and NdFeB magnets in the years ahead.
Despite the initial phase of NdPr oxide production leading to elevated per-unit costs, the Company anticipates a decrease in per-unit production costs over time as production volumes expand. Optimization of logistics is also central to maintaining a low-cost position relative to other global producers.
This process flow allows the Company to use less energy and raw materials per ton of separated REO. Despite the initial phase of NdPr oxide production leading to elevated per-unit costs, the Company anticipates a decrease in per-unit production costs over time as production volumes expand.
The Company is currently advancing the facilitating works, engineering and procurement for the HREE Facility, which is expected to support the separating of HREE contained in the Mountain Pass ore as well as from third-party feedstocks.
The Company is currently advancing the facilitating works, engineering and procurement for the HREE Facility, which is expected to produce HREE products primarily for use in the Magnetics segment.
Depending upon the rare earth-bearing mineral, the mixture of light, medium and heavy REE will differ.
Two additional elements, yttrium and scandium, are often classified as HREE although they are not lanthanides. Depending upon the rare earth-bearing mineral, the relative abundance of light, medium and heavy REE will differ.
The Company, which is headquartered in Las Vegas, Nevada, owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”), the only rare earth mining and processing site of scale in North America, and is constructing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (the “Fort Worth Facility”), where the Company anticipates manufacturing neodymium-iron-boron (“NdFeB”) permanent magnets and its precursor products.
Headquartered in Las Vegas, Nevada, the Company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”) located near Mountain Pass, San Bernardino County, California, the only rare earth mining and processing site of scale in North America.
Litinsky also serves as a member of the Boards of the Shirley Ryan AbilityLab and the Museum of Contemporary Art Chicago. Michael Rosenthal. Mr. Rosenthal is a Founder and the Chief Operating Officer of MP Materials. He has managed the Mountain Pass operation since the Company acquired the site in 2017.
He was admitted to the Illinois Bar. 8 Table of Contents Michael Rosenthal. Mr. Rosenthal is a Founder and the Chief Operating Officer of MP Materials. He has managed the Mountain Pass operation since the Company acquired the site in 2017. Before MP Materials, he was a Partner at QVT Financial (“QVT”), an investment management firm. At QVT, Mr.
REE are used in small, but often necessary, amounts in hundreds of different technologies, materials, and chemicals worldwide for commercial, industrial, social, medical, and environmental applications. In just a period of decades, REE have deeply integrated into the foundation of modern technology and industry, and have proven to be difficult to duplicate or replace.
Rare Earth Industry Overview REE are crucial enablers of modern technologies spanning transportation, electronics, and robotics that have permeated modern society. REE are used in supporting, but often critical, amounts in hundreds of different technologies, materials, and chemicals worldwide for commercial, industrial, social, medical, and environmental applications.
All newly-hired employees at Mountain Pass complete a minimum of 24 hours of Federal Mine Safety and Health Administration (“MSHA”) training during the onboarding process and must, at a minimum, complete annual refresher training. Following their initial training, depending on their job classification, new employees complete targeted online and supervised field training specific to their roles and responsibilities.
The Company believes that the achievement of superior safety performance is both an important short-term and long-term strategic imperative in managing its operations. 5 Table of Contents All newly-hired employees at Mountain Pass complete a minimum of 24 hours of Federal Mine Safety and Health Administration (“MSHA”) training during the onboarding process and must, at a minimum, complete annual refresher training.
Further the Company’s mission and ability to capture the full rare earth value chain through downstream integration into rare earth magnet production.
Upon achieving the designed throughput of separated products, the Company’s integrated site will incur lower costs of packaging, handling and transportation as compared to competitors who lack co-located processing. 4 Table of Contents Further the Company’s mission and ability to capture the full rare earth value chain through downstream integration into rare earth magnet production.
The Company believes the self-contained nature of its operations, with mining, milling, separations, and finishing all on one site, creates additional cost advantages and operational risk mitigation. Upon achieving the designed throughput of separated products, the Company’s integrated site will incur lower costs of packaging, handling and transportation as compared to competitors who lack co-located processing.
The Company believes the self-contained nature of its operations, with mining, milling, separations, and finishing all on one site, creates additional cost advantages and operational risk mitigation. In addition, The Mountain Pass site includes a currently idle chlor-alkali facility that may be restarted in the future to produce key raw materials used in separations.
MP Materials aims to capitalize on and accelerate this opportunity by seeking to partner with current and future customers in their efforts to re-position the capital and labor in their supply chain and to meet the growth in electrification. Leverage the Company’s low-cost position to maximize earnings power in all commodity price environments.
Our goal is to support their efforts in realigning capital and labor within their supply chains to accommodate the growing demand for electrification. Leverage the Company’s low-cost position to maximize earnings power in all commodity price environments. The success of the Company’s business reflects its ability to manage its costs.
The Company utilizes a formalized digital data reporting system to track all incidents reportable to the California Occupational Health and Safety Administration and MSHA. The Company tracks lost time injuries, recordable injuries, recordable injury rates, and near-miss reports.
In total, during 2024, the Company’s employees completed over 13,000 hours of new hire and/or annual refresher training and over 1,200 hours of emergency medical response training, including first aid and CPR. The Company utilizes a formalized digital data reporting system to track all incidents reportable to the California Occupational Health and Safety Administration and MSHA.
Removed
Following the commissioning of the Company’s Stage II optimization project (“Stage II”) in the third quarter of 2023, the Company began producing separated rare earth products, including neodymium-praseodymium (“NdPr”) oxide, that it began selling to customers globally in the fourth quarter of 2023.
Added
The Company is also developing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (“Independence” or the “Independence Facility”). The Company’s operations are organized into two reportable segments: Materials and Magnetics. See Note 20 , “Segment Reporting,” in the notes to the Consolidated Financial Statements for additional information.
Removed
Additionally, in April 2022, the Company entered into a long-term agreement with General Motors Company (NYSE: GM) (“GM”) to supply U.S.-sourced and manufactured rare earth materials and finished magnets for the electric motors in more than a dozen models based on GM’s Ultium Platform. These developments are part of the Company’s Stage III downstream expansion strategy (“Stage III”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

112 edited+25 added−11 removed137 unchanged
Biggest changeThe terms of the New Offtake Agreement are substantially the same as those of the Offtake Agreement with the exception of the addition of NdPr metal into the definition of non-concentrate rare earth products. Further, Shenghe sells the rare earth concentrate it acquires under the Offtake Agreement to customers in China who separate and extract the individual rare earth elements.
Biggest changeFurther, Shenghe sells the rare earth concentrate it acquires under the 2024 Offtake Agreement to customers in China who separate and extract the individual rare earth elements. We do not control the amount and timing of resources that Shenghe will dedicate to their sales efforts.
The pricing and demand for rare earth products is affected by a number of factors beyond our control, including the global macroeconomic environment and the global supply and demand for REO products.
The pricing of and demand for rare earth products is affected by a number of factors beyond our control, including the global macroeconomic environment and the global supply and demand for REO products.
These provisions provide for, among other things: (i) no cumulative voting with respect to the election of our Board; (ii) the division of the our Board into three classes, with only one class of directors being elected in each year; (iii) the ability of our Board to issue one or more series of preferred stock; (iv) advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; (v) certain limitations on convening special stockholder meetings; (vi) limiting the ability of stockholders to act by written consent; (vii) the ability of our Board to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director in certain circumstances; (viii) providing that our Board is expressly authorized to make, alter or repeal our bylaws; (ix) the removal of directors only for cause; and (x) that certain provisions may be amended only by the affirmative vote of at least 66.7% of the shares of common stock entitled to vote generally in the election of our directors.
These provisions provide for, among other things: (i) no cumulative voting with respect to the election of our Board; (ii) the division of our Board into three classes, with only one class of directors being elected in each year; (iii) the ability of our Board to issue one or more series of preferred stock; (iv) advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; (v) certain limitations on convening special stockholder meetings; (vi) limiting the ability of stockholders to act by written consent; (vii) the ability of our Board to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director in certain circumstances; (viii) providing that our Board is expressly authorized to make, alter or repeal our bylaws; (ix) the removal of directors only for cause; and (x) that certain provisions may be amended only by the affirmative vote of at least 66.7% of the shares of common stock entitled to vote generally in the election of our directors.
Because the vast majority of our rare earth concentrate product is currently sold to Shenghe under our Offtake Agreement for further processing by third-party customers in China, the possibility of adverse changes in trade or political relations with China, political instability in China, increases in labor or shipping costs, subsidies to related industries, the occurrence of prolonged adverse weather conditions or a natural disaster such as an earthquake or typhoon, or an outbreak of a global pandemic disease could severely interfere with the sale and/or shipment of our products and would have a material adverse effect on our operations.
Because the vast majority of our rare earth concentrate product is currently sold to Shenghe under the 2024 Offtake Agreement for further processing by third-party customers in China, the possibility of adverse changes in trade or political relations with China, political instability in China, increases in labor or shipping costs, subsidies to related industries, the occurrence of prolonged adverse weather conditions or a natural disaster such as an earthquake or typhoon, or an outbreak of a global pandemic disease could severely interfere with the sale and/or shipment of our products and would have a material adverse effect on our operations.
You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “Risks Relating to our Business and Industry” above and the following: (a) fluctuations in demand for, and prices of, REE and magnet products; (b) results of operations that vary from the expectations of securities analysts and investors; (c) changes in expectations as to the Company’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors; (d) declines in the market prices of stocks generally and market prices of mining-related companies in particular; (e) strategic actions by the Company or its competitors; (f) announcements by the Company or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; (g) any significant change in the Company’s management; (h) changes in general economic or market conditions or trends in the Company’s industry or markets; (i) changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to the Company’s business; (j) future sales of the Company’s common stock or other securities; (k) investor perceptions of the investment opportunity associated with the Company’s common stock relative to other investment alternatives; (l) the public’s response to press releases or other public announcements by the Company or third parties, including the Company’s filings with the SEC; (m) litigation involving the Company, the Company’s industry, or both, or investigations by regulators into the Company’s operations or those of our competitors; (n) guidance, if any, that the Company provides to the public, any changes in this guidance or the Company’s failure to meet this guidance; (o) the development and sustainability of an active trading market for the Company’s stock; (p) actions by institutional or activist stockholders; (q) declines in the market price of our stock as a result of negative reports on the Company by research firms that engage in short selling; (r) changes in accounting standards, policies, guidelines, interpretations or principles; and (s) other events or factors, including those resulting from natural disasters, war, acts of terrorism, health pandemics or responses to these events.
You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “Risks Relating to our Business and Industry” above and the following: (a) fluctuations in demand for, and prices of, REE and magnet products; (b) results of operations that vary from the expectations of securities analysts and investors; (c) changes in expectations as to the Company’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors; (d) declines in the market prices of stocks generally and market prices of mining-related companies in particular; (e) strategic actions by the Company or its competitors; (f) announcements by the Company or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; (g) any significant change in the Company’s management; (h) changes in general economic or market conditions or trends in the Company’s industry or markets; (i) changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to the Company’s business; (j) future sales of the Company’s common stock or other securities; (k) investor perceptions of the investment opportunity associated with the Company’s common stock relative to other investment alternatives; (l) the public’s 22 Table of Contents response to press releases or other public announcements by the Company or third parties, including the Company’s filings with the SEC; (m) litigation involving the Company, the Company’s industry, or both, or investigations by regulators into the Company’s operations or those of our competitors; (n) guidance, if any, that the Company provides to the public, any changes in this guidance or the Company’s failure to meet this guidance; (o) the development and sustainability of an active trading market for the Company’s stock; (p) actions by institutional or activist stockholders; (q) declines in the market price of our stock as a result of negative reports on the Company by research firms that engage in short selling; (r) changes in accounting standards, policies, guidelines, interpretations or principles; and (s) other events or factors, including those resulting from natural disasters, war, acts of terrorism, health pandemics or responses to these events.
While Shenghe is obligated under the Offtake Agreement to purchase all of the rare earth concentrate product meeting certain minimum specifications on a “take-or-pay” basis (such that they are obliged to pay for product even if they are unable or unwilling to take delivery), we cannot guarantee that Shenghe will continue to purchase all of the products that it is contractually bound to purchase or that they will purchase products that do not meet these specifications.
While Shenghe is obligated under the 2024 Offtake Agreement to purchase all of the rare earth concentrate product meeting certain minimum specifications on a “take-or-pay” basis (such that they are obliged to pay for product even if they are unable or unwilling to take delivery), we cannot guarantee that Shenghe will continue to purchase all of the products that it is contractually bound to purchase or that they will purchase products that do not meet these specifications.
If major disasters such as earthquakes, wildfires, health epidemics or pandemics, floods or other events occur, or our information system or communications network breaks down or operates improperly, our ability to continue operations at Mountain Pass may be seriously damaged, or we may have to stop or delay production and shipment of our products.
If major disasters such as earthquakes, wildfires, health epidemics or pandemics, floods or other events occur, or our information system or communications network breaks down or operates improperly, our ability to continue operations at Mountain Pass or Independence may be seriously damaged, or we may have to stop or delay production and shipment of our products.
Fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport could decrease our competitiveness or impair our ability to supply REE or magnet products to our customers, which could adversely affect our results of operations. We currently transport our rare earth concentrate and NdPr oxide products via ocean freight.
Fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport could decrease our competitiveness or impair our ability to supply REE or magnet products to our customers, which could adversely affect our results of operations. We currently transport our rare earth concentrate and NdPr oxide products via ocean freight to customers and tollers.
Upon conversion of the Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted.
Upon conversion of the Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion of 2030 Notes (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted.
Because our revenue is, and will be for the foreseeable future, from the sale of rare earth products, changes in demand for, and the market price of, and taxes and other tariffs and fees imposed upon REE and magnet materials could significantly affect our profitability.
Because our revenue is, and will be for the foreseeable future, from the sale of rare earth products, changes in demand for, and the market price of (including taxes and other tariffs and fees imposed upon) REE and magnet materials could significantly affect our profitability.
In February 2022, we commenced construction of our initial rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas, in support of our Stage III initiatives. The building portion of the Fort Worth Facility was completed in 2023.
In February 2022, we commenced construction of our initial rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas, in support of our Stage III initiatives. The building portion of the Independence Facility was completed in 2023.
China accounts for the significant majority of global separated REO production and also dominates the manufacture of metals and NdFeB magnets from rare earths, capabilities that are not currently present in the U.S. Over the past few years, there has been significant restructuring of the Chinese rare earth production industry, further centralizing control over production by state-owned enterprises.
China accounts for the significant majority of global separated REO production and also dominates the manufacture of metals and NdFeB magnets from rare earths, capabilities that are not currently present at scale in the U.S. Over the past few years, there has been significant restructuring of the Chinese rare earth production industry, further centralizing control over production by state-owned enterprises.
REE and magnet material prices may fluctuate and are affected by numerous factors beyond our control such as interest rates, exchange rates, taxes, inflation or deflation, fluctuation in the relative value of the U.S. dollar against foreign currencies 10 Table of Contents on the world market, shipping and other transportation and logistics costs, global and regional supply and demand for rare earth minerals and products, potential industry trends, such as competitor consolidation or other integration methodologies, and the political and economic conditions of countries that produce and procure REE and magnet materials.
REE and magnet material prices may fluctuate and are affected by numerous factors beyond our control such as interest rates, exchange rates, taxes, inflation or deflation, fluctuation in the relative value of the U.S. dollar against foreign currencies on the world market, shipping and other transportation and logistics costs, global and regional supply and demand for rare earth minerals and products, potential industry trends, such as competitor consolidation or other integration methodologies, and the political and economic conditions of countries that produce and procure REE and magnet materials.
If we are unsuccessful in reaching and maintaining expected production rates for REO at Mountain Pass, including by failing to reach anticipated throughput, recoveries, uptimes, yields, product quality, or any combination thereof, within expected timeframes or at all, we may not be able to reach our full revenue potential or achieve our anticipated cost structure.
If we are unsuccessful in reaching and maintaining expected production rates for REE at Mountain Pass, including by failing to reach anticipated throughput, recoveries, uptimes, yields, product quality, or any combination thereof, within expected timeframes or at all, we may not be able to reach our full revenue potential or achieve our anticipated cost structure.
If we do not comply with investor or stockholder expectations and standards in connection with our ESG initiatives, or are perceived to have not responded appropriately to address ESG issues within our company, our brand and reputation, as well as our business, financial condition, and results of operations could be negatively impacted, and our share price could be materially and adversely affected.
If we do not comply with investor or stockholder expectations and standards in connection with our sustainability initiatives, or are perceived to have not responded appropriately to address sustainability issues within our company, our brand and reputation, as well as our business, financial condition, and results of operations could be negatively impacted, and our share price could be materially and adversely affected.
The extent to which an outbreak, epidemic or pandemic will impact our operations, our business and the economy is highly uncertain and will also depend on future developments that cannot be predicted, including new information which may emerge concerning the severity of the disease, the duration and spread of the outbreak, including the spread of variants, the scope of travel restrictions imposed, mandatory or voluntary business closures, the impact on businesses and financial and capital markets, and the extent and effectiveness of actions taken throughout the world to contain the virus or treat its impact, including the effectiveness and availability of vaccines.
The extent to which an outbreak, epidemic or pandemic will impact our operations, our business and the economy is highly uncertain and will 16 Table of Contents also depend on future developments that cannot be predicted, including new information which may emerge concerning the severity of the disease, the duration and spread of the outbreak, including the spread of variants, the scope of travel restrictions imposed, mandatory or voluntary business closures, the impact on businesses and financial and capital markets, and the extent and effectiveness of actions taken throughout the world to contain the virus or treat its impact, including the effectiveness and availability of vaccines.
The publication of our ESG report may result in increased investor, media, employee, and other stakeholder attention to our ESG initiatives, and such stakeholders may not be satisfied with our ESG practices or initiatives. Organizations that inform investors on ESG matters have developed rating systems for evaluating companies on their approach to ESG.
The publication of our sustainability report may result in increased investor, media, employee, and other stakeholder attention to our sustainability initiatives, and such stakeholders may not be satisfied with our sustainability practices or initiatives. Organizations that inform investors on such matters have developed rating systems for evaluating companies on their approach to sustainability.
We may be impacted by natural disasters, wars, health epidemics or pandemics or other events outside of our control. For example, Mountain Pass is located in San Bernardino County, California, near active faults, that could lead to nearby earthquakes.
We may be impacted by natural disasters, wars, health epidemics or pandemics or other events outside of our control. For example, Mountain Pass is located in San Bernardino County, California, near active faults, which could lead to nearby earthquakes.
However, given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, operating results and financial condition.
However, given the unpredictability of the timing, nature and scope of information technology disruptions, we have been in the past or could potentially be subject to downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, operating results and financial condition.
Certain provisions of our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.
Certain provisions of our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other 23 Table of Contents change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.
Upon reaching anticipated production rates for REO and other planned downstream products at Mountain Pass, we expect to produce approximately 20,000 MTs of separated REO per year, which includes approximately 6,075 MTs of NdPr oxide per year, excluding cerium concentrate.
Upon reaching anticipated production rates for REO and other planned midstream products at Mountain Pass, we expect to produce approximately 20,000 MTs of separated REO per year, which includes approximately 6,075 MTs of NdPr oxide per year, excluding cerium concentrate.
Our ability to reach anticipated production rates as part of our Stage II project at Mountain Pass, the completion of our Stage III project, as well as the execution of other capital projects such as the HREE Facility, all require the commitment of substantial resources and capital expenditures.
Our ability to reach anticipated production rates as part of our Stage II project at Mountain Pass, the completion of Independence, as well as the execution of other capital projects such as the HREE Facility, all require the commitment of substantial resources and capital expenditures.
If our ESG practices do not meet the standards set by these investors, they may choose not to invest in our common stock, or if our peer companies outperform us in their ESG initiatives, potential or current investors may elect to invest with our competitors instead.
If our sustainability practices do not meet the standards set by these investors, they may choose not to invest in our common stock, or if our peer companies outperform us in their sustainability initiatives, potential or current investors may elect to invest with our competitors instead.
The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. These impacts may adversely impact the cost, production and financial performance of our operations.
The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. These impacts may adversely affect the cost, production and financial performance of our operations.
If one or more holders elect to convert their Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If one or more holders elect to convert their Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), which only applies to the 2030 Notes, we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
We expect that our emissions will continue to increase as our separations production ramps, which would require us to purchase additional allowances, with the price of allowances subject to market volatility. Any adopted future climate change regulations could negatively impact our ability to compete with companies situated in areas and countries not subject to such limitations.
We expect that our emissions will continue to increase as our separations production ramps, which would require us to purchase additional allowances, with the price of allowances subject to market volatility. Any adopted future climate change regulations could 21 Table of Contents negatively impact our ability to compete with companies situated in areas and countries not subject to such limitations.
Under the federal Comprehensive Environmental Response, 20 Table of Contents Compensation and Liability Act, and analogous state statutes, our liability for claims for contamination at our current or former properties, and at third-party sites at which we disposed of waste, may be joint and several, so that we may be held responsible for more than our share of any contamination, or even for the entire share.
Under the federal Comprehensive Environmental Response, Compensation and Liability Act, and analogous state statutes, our liability for claims for contamination at our current or former properties, and at third-party sites at which we disposed of waste, may be joint and several, so that we may be held responsible for more than our share of any contamination, or even for the entire share.
Certain provisions in the indenture governing the Convertible Notes may delay or prevent an otherwise beneficial takeover attempt of us. Certain provisions in the indenture governing the Convertible Notes may make it more difficult or expensive for a third party to acquire us.
Certain provisions in the indentures governing the Convertible Notes may delay or prevent an otherwise beneficial takeover attempt of us. Certain provisions in the indentures governing the Convertible Notes may make it more difficult or expensive for a third party to acquire us.
In the event that we are unable to hire, train and retain the necessary number of skilled technicians, engineers and other personnel there could be an adverse impact on our labor costs and our ability to reach anticipated production levels in a timely manner, which could have a material adverse effect on our results of operations.
If we are unable to hire, train and retain the necessary number of skilled technicians, engineers and other personnel there could be an adverse impact on our labor costs and our ability to reach anticipated production levels in a timely manner, which could have a material adverse effect on our results of operations.
There can be no assurance that such equipment and materials will be procured on time or not be delayed due to circumstances beyond our control. Further, we will need to hire a sufficient number of engineers, operators and other professionals to successfully design and operate the Fort Worth Facility.
There can be no assurance that such equipment and materials will be procured on time or not be delayed due to circumstances beyond our control. Further, we need to hire a sufficient number of engineers, operators and other professionals to successfully design and operate the Independence Facility.
(“VREX Holdco”). • The conditional conversion feature of our Convertible Notes (as defined in Note 10 , “ Debt Obligations ” in the notes to the Consolidated Financial Statements), if triggered, may adversely affect our financial condition and operating results. • Conversion of our Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock. • Certain provisions in the indenture governing the Convertible Notes may delay or prevent an otherwise beneficial takeover attempt of us. • Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
(“VREX Holdco”). • The conditional conversion features of our Convertible Notes (as defined in Note 10 , “Debt Obligations ” in the notes to the Consolidated Financial Statements), if triggered, may adversely affect our financial condition and operating results. • Conversion of our Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock. • Certain provisions in the indentures governing the Convertible Notes may delay or prevent an otherwise beneficial takeover attempt of us. • Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
Design, engineering or construction delays may impair our ability to perform under our long-term supply agreement with GM. In addition, we will need to procure the necessary equipment and materials needed to produce magnets and their precursor materials, some of which may be difficult to obtain.
Design, engineering or construction delays may impair our ability to perform under our long-term supply agreement with GM. In addition, we need to procure the necessary equipment and materials to produce magnets and their precursor products, some of which may be difficult to obtain.
If we are unsuccessful in being able to commence production at our Fort Worth Facility, within the expected time frame or at all, we will not be able to take advantage of our downstream value creation opportunity and thus we may not be able to reach our full revenue potential.
If we are unsuccessful in being able to commence production at the Independence Facility, within the expected time frame or at all, we will not be able to take advantage of our downstream value creation opportunity and thus we may not be able to reach our full revenue potential.
If the market for these critical existing and emerging technologies does not grow as we expect, grows more slowly than we expect, or if the demand for our products in these markets decreases, then our business, prospects, financial condition and operating results could be harmed.
If the market for these critical existing and emerging technologies does not grow as we expect, grows slower than we expect, or if the demand for our products in these markets decreases, then our business, prospects, financial condition and operating results could be harmed.
These competitors may have greater financial resources, as well as other strategic advantages to operate, maintain, improve and possibly expand their facilities. Additionally, our Chinese competitors have historically been able to produce at relatively low costs due to domestic economic and regulatory factors, including less stringent environmental and governmental regulations and lower labor and 11 Table of Contents benefit costs.
These competitors may have greater financial resources, as well as other strategic advantages to operate, maintain, improve, and possibly expand their facilities. Additionally, our Chinese competitors have historically been able to produce at relatively low costs due to domestic economic and regulatory factors, including less stringent environmental and governmental regulations and lower labor and benefit costs.
For example, the indenture governing the Convertible Notes requires us to repurchase the notes for cash upon the occurrence of a fundamental change (as defined in the indenture governing the Convertible Notes) of us and, in certain circumstances, to increase the conversion rate for a holder that converts their Convertible Notes in connection with a make-whole fundamental change (as defined in the indenture governing the Convertible Notes).
For example, each of the indentures governing the Convertible Notes requires us to repurchase the notes for cash upon the occurrence of a fundamental change (as defined in each of the indentures governing the Convertible Notes) of us and, in certain circumstances, to increase the conversion rate for a holder that converts their Convertible Notes in connection with a make-whole fundamental change (as defined in each of the indentures governing the Convertible Notes).
Any changes in U.S. and China relations, including through changes in policies by the Chinese government, could adversely affect our financial condition and results of operations, including changes in laws, regulations or the interpretation thereof, confiscatory taxation, governmental royalties, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises.
Any changes in U.S. and China relations, including through changes in policies by the Chinese government, could adversely affect our financial condition and results of operations, including changes 13 Table of Contents in laws, regulations or the interpretation thereof, tariffs, confiscatory taxation, governmental royalties, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises.
Our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our confidential information to competitors, and confidentiality 14 Table of Contents agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential or proprietary information.
Our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential or proprietary information.
In addition, our business faces increasing scrutiny related to ESG issues, including sustainable development, renewable resources, environmental stewardship, supply chain management, climate change, diversity, inclusion and meritocracy, workplace conduct, human rights, philanthropy and support for local communities. Implementation of our environmental and sustainability initiatives will require financial expenditures and employee resources.
In addition, our business faces increasing scrutiny related to issues such as sustainable development, renewable resources, environmental stewardship, supply chain management, climate change, diversity, inclusion and meritocracy, workplace conduct, human rights, philanthropy and support for local communities. Implementation of our environmental and sustainability initiatives will require financial expenditures and employee resources.
The technology we currently use to beneficiate REO is a sustainable process with dry tailings that limits the need for fresh water usage. Although we believe our current process is sustainable, any disruption in the process could prompt the need for significant access to fresh water.
The technology we currently use to beneficiate REO is a sustainable process with dry tailings that limits the need for freshwater usage. Although we believe our current process is sustainable, any disruption in the process could prompt the need for significant access to freshwater.
Our ability to sell products to customers in China or obtain materials from suppliers in China may be adversely affected by changes in Chinese laws and regulations, including those relating to 12 Table of Contents taxation, import and export tariffs and regulations, raw materials, environmental regulations, land use rights, property and other matters. The U.S.
Our ability to sell products to customers in China or obtain materials from suppliers in China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs and regulations, raw materials, environmental regulations, land use rights, property and other matters. The U.S.
The progress, the amounts and timing of expenditures and the success of these projects will depend in part on the following: (a) the ability of the Stage II facilities to separate REO as designed and engineered; (b) our ability to timely produce metal at the metal processing plant and related facilities in Vietnam under our tolling agreement with VREX Holdco (the “Tolling Agreement”); (c) our ability to timely procure new equipment and materials, certain of which may involve long lead-times, or to repair existing equipment; (d) the ability of service providers or vendors to meet contractually-negotiated delivery or completion deadlines or meet performance specifications or guarantees; (e) maintaining, and procuring, as required, applicable federal, state and local permits; (f) the incorporation of project change orders, due to engineering, process, health and safety, or other considerations; (g) negotiating contracts for equipment, earthwork, construction, equipment installation, labor and completing infrastructure and construction work following commissioning; (h) impact of planned and unplanned shut-downs and delays in our production; (i) impact of stoppages or delays on construction projects; (j) disputes with contractors or other third parties; (k) negotiating sales and offtake contracts for our planned production; (l) the execution of any joint venture agreements or similar arrangements with strategic partners; and (m) other factors, many of which are beyond our control.
The progress, the amounts and timing of expenditures and the success of these projects will depend in part on the following: (a) the ability of the Stage II facilities to separate REO as designed and engineered; (b) our ability to timely produce metal for magnets; (c) our ability to timely procure new equipment and materials, certain of which may involve long lead-times, or to repair existing equipment; (d) the ability of service providers or vendors to meet contractually-negotiated delivery or completion deadlines or meet performance specifications or guarantees; (e) maintaining, and procuring, as required, applicable federal, state and local permits; (f) the incorporation of project change orders, due to engineering, process, health and safety, or other considerations; (g) negotiating contracts for equipment, earthwork, construction, equipment installation, labor and completing infrastructure and construction work following commissioning; (h) impact of planned and unplanned shut-downs and delays in our production; (i) impact of stoppages or delays on construction projects; (j) disputes with contractors or other third parties; (k) negotiating sales and offtake contracts for our planned production; (l) the execution of any joint venture agreements or similar arrangements with strategic partners; and (m) other factors, many of which are beyond our control.
Our proposed timeline for producing magnet materials is based on certain estimates and assumptions we have made about our business over the next few years, including reaching anticipated production rates for the separation of REE and the ability to obtain equipment on a timely basis from third party vendors.
Our proposed timeline for producing magnet materials is based on certain estimates and assumptions we have made about our business, including reaching anticipated production rates for the separation of REE and the ability to obtain equipment on a timely basis from third party vendors.
To implement this vertical integration strategy successfully, we may need to 15 Table of Contents license certain intellectual property related to these downstream processes and/or develop the ability, or collaborate with, purchase, or form a joint venture with existing participants in the metal, alloy, and magnet production supply chain.
To implement this vertical integration strategy successfully, we may need to license certain intellectual property related to these downstream processes and/or develop the ability, or collaborate with, purchase, or form a joint venture with existing participants in the metal, alloy, and magnet production supply chain.
See “Cautionary Note Regarding Forward-Looking Statements” above. Risk Factor Summary Our business is subject to a number of risks and uncertainties, including those highlighted immediately following this summary.
See “Cautionary Note Regarding Forward-Looking Statements” above. 9 Table of Contents Risk Factor Summary Our business is subject to a number of risks and uncertainties, including those highlighted immediately following this summary.
In addition, customer needs and specifications may change with time. Any delay or failure in developing processes to meet changing customer needs and specifications may have a material adverse effect on our financial condition or results of operations. Diminished access to water may adversely affect our operations. Processing of REO requires significant amounts of water.
Any delay or failure in developing processes to meet changing customer needs and specifications may have a material adverse effect on our financial condition or results of operations. Diminished access to water may adversely affect our operations. Processing of REO requires significant amounts of water.
We are still in the process of delineating the extent of groundwater contamination at and around the facility and cannot assure you that we will not incur material costs relating to the remediation of such contamination.
We are still in the process of delineating the extent of groundwater contamination at and around Mountain Pass and cannot assure you that we will not incur material costs relating to the remediation of such contamination.
If any of these estimates or assumptions prove to be wrong, it may significantly hinder our ability to complete the Fort Worth Facility within the expected time frame or at all.
If any of these estimates or assumptions prove to be wrong, it may significantly hinder our ability to complete the Independence Facility within the expected time frame or at all.
Uncertainty in our estimates related to our REO reserves could result in lower-than-expected revenues and higher-than-expected costs or a shortened estimated life for the mine at Mountain Pass.
Uncertainty in our estimates related to our REO reserves could result in lower-than-expected revenues and higher-than-expected costs or a shortened estimated life-of-mine for Mountain Pass.
Some of these risks are: • We may be adversely affected by fluctuations in demand for, and prices of, REE and magnet materials. • The success of our business will depend, in part, on the growth of existing and emerging uses for rare earth products. • An increase in the global supply of rare earth products, dumping, predatory pricing and other tactics designed to inhibit our further downstream integration by our competitors may materially adversely affect our profitability. • We operate in a highly competitive industry. • Our ability to generate revenue will be diminished if we are unable to compete with substitutions for our rare earth materials. • We currently rely on Shenghe to purchase the vast majority of our rare earth concentrate product on a “take-or-pay” basis and sell that product to end users in China; we cannot assure you that they will continue to honor their contractual obligations to purchase and sell our products, or that they will make optimum efforts to market and sell our products. 9 Table of Contents • Changes in China’s political environment and policies, including changes in export policy or the interpretation of China’s export policy and policy on rare earths production or the import of rare earth feedstock, may adversely affect our financial condition and results of operations. • The production of rare earth products is a capital-intensive business that requires the commitment of substantial resources; if we do not have sufficient resources to provide for such production, it could have a material adverse effect on our financial condition or results of operations. • Our continued growth depends on our ability to reach anticipated production rates for the separation of REE as part of the Stage II project at Mountain Pass, our only rare earth mining and processing facility. • The production of magnet materials in Stage III is dependent upon our ability to complete the buildout of our Fort Worth Facility; an unanticipated delay in the completion of Stage III could have a material adverse effect on our ability to produce magnets. • If we infringe, or are accused of infringing, the intellectual property rights of third parties, it may increase our costs or prevent us from being able to commercialize new products. • We may not be able to adequately protect our intellectual property rights.
Some of these risks are: • We may be adversely affected by fluctuations in demand for, and prices of, REE and magnet materials. • The success of our business will depend, in part, on the growth of existing and emerging uses for rare earth products. • An increase in the global supply of rare earth products, dumping, predatory pricing and other tactics designed to inhibit our further downstream integration by our competitors may materially adversely affect our profitability. • We operate in a highly competitive industry. • Industry consolidation may result in increased competition, which could result in a reduction in revenue. • Our ability to generate revenue will be diminished if we are unable to compete with substitutions for our rare earth materials. • We currently rely on Shenghe to purchase the vast majority of our rare earth concentrate product on a “take-or-pay” basis and sell that product to end users in China; we cannot assure you that they will continue to honor their contractual obligations to purchase and sell our products, or that they will make optimum efforts to market and sell our products. • Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations. • Changes in China’s political environment and policies, including changes in export policy or the interpretation of China’s export policy and policy on rare earths production or the import of rare earth feedstock, may adversely affect our financial condition and results of operations. • The production of rare earth products is a capital-intensive business that requires the commitment of substantial resources; if we do not have sufficient resources to provide for such production, it could have a material adverse effect on our financial condition or results of operations. • Our continued growth depends on our ability to reach anticipated production rates for the separation of REE as part of the Stage II project at Mountain Pass, our only rare earth mining and processing facility. • The production of magnets and magnetic precursor products in Stage III is dependent upon our ability to complete the buildout of the Independence Facility; an unanticipated delay in the completion of the Independence Facility could have a material adverse effect on our ability to produce magnets. • If we infringe, or are accused of infringing, the intellectual property rights of third parties, it may increase our costs or prevent us from being able to commercialize new products. • We may not be able to adequately protect our intellectual property rights.
Our strategy is to produce REE and magnet products that are used in critical existing and emerging technologies, such as hybrid and electric vehicles, wind turbines, robotics, medical equipment, military equipment and other high-growth, advanced motion technologies.
Our strategy is to produce REE and magnet products that are used in critical existing and emerging technologies, such as hybrid and electric vehicles, wind turbines, robotics, medical equipment, military equipment and other high-growth, advanced 11 Table of Contents motion technologies.
Our facilities at Mountain Pass are currently powered by a natural gas-powered combined heat and power (“CHP”) plant that produces electricity and steam and eliminates reliance on the regional electric power grid. Operation of the CHP plant is necessary to support the entire energy demand of Stage II.
Our facilities at Mountain Pass are currently powered by a natural gas-powered combined heat and power (“CHP”) plant that produces electricity and steam and eliminates reliance on the regional electric power grid. Operation of the CHP plant is necessary to support the entire energy demand of our upstream and midstream operations.
Various measures have been implemented to manage our risks related to information technology systems and network disruptions.
We have implemented various measures to manage our risks related to information technology systems and network disruptions.
This could cause substantial reductions to, or a suspension of, REO production operations, impair asset values and reduce our proven and probable rare earth ore reserves.
This could cause substantial reductions to, or a suspension of, REO production operations, impair asset values and reduce our proven and probable REO reserves.
Patents also will not protect our products and processes if competitors devise ways of making products without infringing our patents. If we are unable to perform the obligations under our long-term supply agreement with GM, this could have a material adverse effect on our financial position and results of operations. We entered into a binding long-term supply agreement with GM.
Patents also will not protect our products and processes if competitors devise ways of making products without infringing our patents. 15 Table of Contents If we are unable to perform the obligations under our long-term supply agreement with GM, this could have a material adverse effect on our financial position and results of operations.
While we will be relying on a number of experienced engineers and other third parties in the design, engineering and construction of the Fort Worth Facility, we will be making a number of judgments and assumptions on process design, equipment selection and design, and plant operations, that may or may not prove to be correct.
While we are relying on a number of experienced engineers and other third parties in the design, engineering and construction of the Independence Facility, we are making a number of judgments and assumptions on process design, equipment selection and design, and plant operations, that may or may not prove to be correct.
Our financial results may be significantly adversely affected by declines in the prices of REE and magnet materials. For example, as a result of the decrease in the market price of NdPr oxide in 2023, our Realized Price per REO MT (as defined in Item 7.
Our financial results may be significantly adversely affected by declines in our realized prices for REE and magnet materials. For example, as a result of the decrease in the market price of NdPr oxide in 2024, our NdPr Realized Price per KG (as defined in Item 7.
Production at Mountain Pass is dependent upon the efforts of our employees. Although none of our employees are currently subject to any collective bargaining arrangements, our employees could, in the future, choose to be represented as a collective unit, which may result in labor disputes, work stoppages or other disruptions in our production efforts that could adversely affect us.
Although none of our employees are currently subject to any collective bargaining arrangements, our employees could, in the future, choose to be represented as a collective unit, which may result in labor disputes, work stoppages or other disruptions in our production efforts that could adversely affect us.
Ltd (“China Rare Earth Group”), that will account for more than half of China’s heavy rare earths supplies. China Rare Earth Group will have enhanced pricing power of key rare earths, such as dysprosium and terbium, which will likely bring changes to the global rare earth supply chain. These competitive pressures could have a material adverse effect on our business.
Ltd (“China Rare Earth Group”), that accounts for more than half of China’s heavy rare earths supplies. China Rare Earth Group has enhanced pricing power of key rare earths, such as dysprosium and terbium, which has brought changes to the global rare earth supply chain. These competitive pressures could have a material adverse effect on our business.
In the event the conditional conversion feature of our Convertible Notes is triggered, holders of the Convertible Notes will be entitled to convert them at any time during specified periods at their option.
In the event the conditional conversion features of our Convertible Notes are triggered, holders of the Convertible Notes will be entitled to convert them at any time during specified periods at their option.
These requirements may result in significant costs, liabilities and obligations, impose conditions that are difficult to achieve or otherwise delay, limit or prohibit current or planned operations and future growth. Consequently, the modernization and expansion of Mountain Pass and the development of our Fort Worth Facility may be delayed, limited or prevented and current operations may be curtailed.
These requirements may result in significant costs, liabilities and obligations, impose conditions that are difficult to achieve or otherwise delay, limit or prohibit current or planned operations and future growth. 20 Table of Contents Consequently, the modernization and expansion of Mountain Pass and the development of the Independence Facility may be delayed, limited or prevented and current operations may be curtailed.
A shortage of skilled technicians and engineers may further increase operating costs, which may materially adversely affect our results of operations. Efficient production of rare earth products and magnet materials using modern techniques and equipment requires skilled technicians and engineers.
A shortage of skilled technicians and engineers may further increase operating costs, which may materially adversely affect our results of operations. Efficient production of rare earth products, magnets and magnetic precursor products using modern techniques and equipment requires skilled technicians and engineers.
Additionally, with the commencement of Stage II operations, we require an even greater amount of water for our CHP plant, separation and extraction processes, and product finishing operations, including significant demand for highly-pure water.
Additionally, with the commencement of our midstream operations in 2023, we require an even greater amount of water for our CHP plant, separation and extraction processes, and product finishing operations, including significant demand for highly-pure water.
There can be no assurance that we will be able to purchase the necessary chemical reagents from third parties on 16 Table of Contents terms that are acceptable to us. The failure to obtain chemical reagents as needed will have an adverse effect on our financial condition and results of operations.
There can be no assurance that we will be able to purchase the necessary chemical reagents or other raw materials from third parties on terms that are acceptable to us. The failure to obtain chemical reagents or other raw materials as needed will have an adverse effect on our financial condition and results of operations.
Our ability to fulfil the obligations under our long-term agreement with GM to supply them with magnet materials is subject to a number of risks and contingencies. We are embarking on building the first scaled rare earth magnet manufacturing facility in the U.S. in several decades.
We entered into a binding long-term supply agreement with GM. Our ability to fulfill the obligations under our long-term agreement with GM to supply them with magnet materials is subject to a number of risks and contingencies. We are building the first scaled rare earth magnet manufacturing facility in the U.S. in several decades.
We depend upon information technology systems in the conduct of our operations. Our information technology systems are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks, natural disasters and defects in design.
Our information technology systems are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks, natural disasters and defects in design.
We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition. 19 Table of Contents We are dependent upon information technology systems, which are subject to cyber threats, disruption, damage and failure.
We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition. We are dependent upon information technology systems, which are subject to cyber threats, disruption, damage and failure. We depend upon information technology systems in the conduct of our operations.
If we fail to adequately enforce or defend our intellectual property rights, our business may be harmed. • If we are unable to perform the obligations under our long-term supply agreement with GM, this could have a material adverse effect on our financial position and results of operations. • We may not be able to convert current commercial discussions with customers for the sale of REO products into contracts, which may have a material adverse effect on our financial position and results of operations. • We may not successfully establish or maintain collaborative, joint venture and licensing arrangements, which could adversely affect our ability to vertically integrate into further downstream processing of our REO. • Outbreaks, epidemics or pandemics could have an adverse effect on our business. • We are subject to a number of operational risks of our business, including power outages or shortages at the Mountain Pass facility; increasing costs or limited access to raw materials; disruptions in transportation or other services; inability to process REO that meet individual customer specifications; access to water; uncertainty in our estimates of REO reserves; labor matters/labor relations; cybersecurity breaches; and/or environmental, social and governance (“ESG”) matters. • We are subject to regulatory and business risks associated with our investment in VREX Holdco Pte.
If we fail to adequately enforce or defend our intellectual property rights, our business may be harmed. • We may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately protect our rights or permit us to gain or keep any competitive advantage. • If we are unable to perform the obligations under our long-term supply agreement with GM, this could have a material adverse effect on our financial position and results of operations. • We may not be able to convert current commercial discussions with customers for the sale of REO products into contracts, which may have a material adverse effect on our financial position and results of operations. • We may not successfully establish or maintain collaborative, joint venture and licensing arrangements, which could adversely affect our ability to vertically integrate into further downstream processing of our REO. • Outbreaks, epidemics or pandemics could have an adverse effect on our business. • We are subject to a number of operational risks of our business, including power outages or shortages at Mountain Pass; increasing costs or limited access to raw materials; disruptions in transportation or other services; inability to process REO that meet individual customer specifications; access to water; uncertainty in our estimates of REO reserves; labor matters/labor relations; information technology and cybersecurity breaches; and/or sustainability matters. 10 Table of Contents • We are subject to regulatory and business risks associated with our investment in VREX Holdco Pte.
We currently sell the vast majority of our rare earth concentrate to Shenghe, which typically sells that product to refiners in China. Demand for rare earth concentrate is currently constrained to a relatively limited number of refiners, a significant majority of which are based in China.
We currently sell the vast majority of our rare earth concentrate to Shenghe, which typically sells that product to refiners in China. Demand for rare earth concentrate is currently constrained to a relatively limited number of refiners, a significant majority of which are based in China. In January 2024, the Company entered into the 2024 Offtake Agreement.
There is a risk that we may infringe, or may be accused of infringing, the proprietary rights of third parties under patents and pending patent applications belonging to third parties that may exist in the U.S. and elsewhere in the world that relate to our rare earth products and processes, including our planned future production of magnet materials in Stage III.
There is a risk that we may infringe, or may be accused of infringing, the proprietary rights of third parties under patents and pending patent applications belonging to third parties that may exist in the U.S. and elsewhere in the world that relate to our 14 Table of Contents rare earth products and processes, including our planned future production of magnets at Independence.
A work stoppage by any of the third parties providing services in connection with construction projects at Mountain Pass and our magnet facility being developed in Fort Worth, Texas, could significantly delay completion of such projects and disrupt our operations, reduce our revenues and materially adversely affect our results of operations.
A work stoppage by any of the third parties providing services in connection with construction projects at Mountain Pass or Independence could significantly delay the completion of such projects and disrupt our operations, reduce our revenues, and materially adversely affect our results of operations.
If a court were to find these provisions of our Second Amended and Restated Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. 23 Table of Contents Increased scrutiny regarding our sustainability and ESG practices could impact our reputation and our stock price.
If a court were to find these provisions of our Second Amended and Restated Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
In addition, our ability to reach our full revenue potential will be dependent on our ability to finish the buildout of our Fort Worth Facility and commence the production of magnet materials.
In addition, our ability to reach our full revenue potential will be dependent on our ability to finish the buildout of the Independence Facility and commence the production of magnets.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ) decreased from $11,974 for the year ended December 31, 2022, to $6,854 for the year ended December 31, 2023, which negatively impacted our results of operations and cash flows.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ) decreased from $70 for the year ended December 31, 2023, to $51 for the year ended December 31, 2024, which negatively impacted our results of operations and cash flows.
The production of magnet materials in Stage III is dependent upon our ability to complete the buildout of our Fort Worth Facility; an unanticipated delay in the completion of Stage III could have a material adverse effect on our ability to produce magnets.
The production of magnets and magnetic precursor products in Stage III is dependent upon our ability to complete the buildout of the Independence Facility; an unanticipated delay in the completion of the Independence Facility could have a material adverse effect on our ability to produce magnets.
Estimates of our total reclamation and mine closing liabilities are based upon our reclamation plan, third-party expert reports, current applicable laws and regulations, certain permit terms, our engineering expertise related to these requirements and review by regulatory agencies.
Federal, state, and local laws and regulations establish reclamation and closure standards applicable to our surface mining and other operations as well. Estimates of our total reclamation and mine closing liabilities are based upon our reclamation plan, third-party expert reports, current applicable laws and regulations, certain permit terms, our engineering expertise related to these requirements and review by regulatory agencies.
A takeover of us may trigger the requirement that we repurchase the Convertible Notes and/or increase the conversion rate, which could make it more costly for a potential acquirer to engage in such takeover.
A takeover of us may trigger the requirement that we repurchase the Convertible Notes and/or increase the conversion rate, which could make it more costly for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.
We have limited experience operating our Stage II assets. In the event that certain equipment fails to consistently perform as designed or we are unable to maintain consistent uptime, we may struggle to meet individual customer specifications, which may have a material adverse effect on our financial condition or results of operations.
In the event that certain equipment fails to consistently perform as designed or we are unable to maintain consistent product quality, we may struggle to meet individual customer specifications, which may have a material adverse effect on our financial condition or results of operations. In addition, customer needs and specifications may change with time.
At times during 2021 and 2022, there was a backlog of container ships off the coast of Southern California that delayed shipments in and out of the ports of Los Angeles and Long Beach, the ports that we use to ship our rare earth concentrate product.
In the past, there have been backlogs of container ships off the coast of Southern California that delayed shipments in and out of the ports of Los Angeles and Long Beach, the ports that we use to ship our rare earth concentrate product.
We currently rely on Shenghe to purchase the vast majority of our rare earth concentrate product on a “take-or-pay” basis and sell that product to end users in China; we cannot assure you that they will continue to honor their contractual obligations to purchase and sell our products, or that they will make optimum efforts to market and sell our products.
If the demand for our rare earth materials or NdFeB magnets decreases, it will have a material adverse effect on our business and the results of our operations. 12 Table of Contents We currently rely on Shenghe to purchase the vast majority of our rare earth concentrate product on a “take-or-pay” basis and sell that product to end users in China; we cannot assure you that they will continue to honor their contractual obligations to purchase and sell our products, or that they will make optimum efforts to market and sell our products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−0 removed2 unchanged
Biggest changeCybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected nor are they reasonably likely to affect the Company, including its business strategy, results of operations or financial condition. 25 Table of Contents
Biggest changeThe information security program is regularly evaluated by the CTO with the results of those reviews reported to the CIRC, the Audit Committee of the Company’s Board of Directors, and the Board of Directors, as appropriate. 26 Table of Contents Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected nor are they reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.
The Company’s Cybersecurity Incident Response Committee (the “CIRC”), which is comprised of the Company’s CTO, Chief Financial Officer, General Counsel, Senior Vice President of Financial Reporting and Technical Accounting, and Senior Director of Internal Audit, meets periodically and more often, as needed, in the event cybersecurity incidents are identified.
The Company’s Cybersecurity Incident Response Committee (the “CIRC”), which is comprised of the Company’s CTO, Chief Financial Officer, General Counsel, Senior Vice President of Financial Reporting and Technical Accounting, and Vice President of Internal Audit, meets periodically and more often, as needed, in the event cybersecurity incidents are identified.
The Company’s CTO provides periodic reports to the Audit Committee of the Company’s Board of Directors, as well as the CIRC, as appropriate. These periodic reports include updates on the Company’s cyber risks and threats, the status of projects to strengthen its information security systems, assessments of the information security program, and the emerging threat landscape.
These periodic reports include updates on the Company’s cyber risks and threats, the status of projects to strengthen its information security systems, assessments of the information security program, and the emerging threat landscape.
The Company actively engages with key vendors, industry participants, and intelligence and law enforcement communities as part of its continuing efforts to evaluate and enhance the effectiveness of its information security policies and procedures. In addition, the Company’s vendor management program addresses cybersecurity risks associated with its use of third-party service providers including suppliers, software and cloud-based service providers.
The Company actively engages with key vendors, industry participants, and intelligence and law enforcement communities as part of its continuing efforts to evaluate and enhance the effectiveness of its information security policies and procedures. Additionally, the Company provides cybersecurity awareness training to its employees, incident response personnel, and senior management.
The Company proactively evaluates the cybersecurity risk of a third party by utilizing a repository of risk assessments, external monitoring sources, threat intelligence during contracting, and vendor selection processes. Security issues are documented and tracked, and periodic monitoring of third parties is conducted in an effort to mitigate risk.
Furthermore, the Company’s vendor management program addresses cybersecurity risks associated with its use of third-party service providers including suppliers, software, and cloud-based service providers. The Company proactively evaluates the cybersecurity risk of a third party by utilizing a repository of risk assessments, external monitoring sources, threat intelligence during contracting, and vendor selection processes.
The information security program is regularly evaluated by the CTO with the results of those reviews reported to the CIRC, the Audit Committee of the Company’s Board of Directors, and the Board of Directors, as appropriate.
Security issues are documented and tracked, and periodic monitoring of third parties is conducted to mitigate risk. The Company’s CTO provides periodic reports to the Audit Committee of the Company’s Board of Directors, as well as the CIRC, as appropriate.

Item 2. Properties

Properties — owned and leased real estate

39 edited+10 added−11 removed39 unchanged
Biggest changeMeasured mineral resources have been converted to proven reserves. • Reserves are diluted at the contact of the 2% TREO geological model triangulation (further to dilution inherent to the resource model and assume selective mining unit of 15 feet x 15 feet x 30 feet). • Mineral reserves tonnage and grade are reported as diluted. • Pit optimization is based on an average TREO% equivalent concentrate price of $10,836 per dry ST of 60% TREO concentrate, average mining cost at the pit exit of $1.70 per dry ST mined plus $0.068 per dry ST mined for each 15 feet bench above or below the pit exit, combined milling and SG&A costs of $78.94 per dry ST ore milled, separations facility costs of $1,551 per dry ST of 60% TREO concentrate treated, freight of $163 per ST of dry product shipped, sustaining capital costs of $30.48 per dry ST of ore mined, and overall pit slope angles of 39° to 45° including ramps. • Reserves contain material inside and outside permitted mining but within mineral lease. • Reserves assume 100% mining recovery. • The strip ratio for the remaining reserves is 6.3 to 1 (waste to ore ratio). • The mineral reserves were estimated by SRK.
Biggest changeMeasured mineral resources have been converted to proven reserves. • Reserves are diluted at the contact of the 2% TREO geological model triangulation (further to dilution inherent to the resource model and assume selective mining unit of 15 feet x 15 feet x 30 feet). • Mineral reserves tonnage and grade are reported as diluted. 33 Table of Contents • Pit optimization is based on pit slope angles of 39° to 45° including ramps and the following assumed prices: Rare Earth Mineral Concentrate $10.20/kg, PrNd Oxide $124.83/kg, SEG+ Precipitate $48.22/kg, La Carbonate $1.44/kg and Ce Chloride $2.57/kg. • Pit optimization is based on concentrator recovery that varies based on the grade of the ore fed to the concentrator.
Estimates of economically recoverable REO reserves, however, necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, such as: • geological, mining and processing conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience; • the strategic approach to mining and processing the deposit may change depending upon market demand, corporate strategy and other prevailing economic conditions; • assumptions concerning future prices of rare earth products, foreign exchange rates, process recovery rates, transportation costs, operating costs, capital costs, and reclamation costs; and 32 Table of Contents • assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies and foreign government policy relating to import or export of rare earth products.
Estimates of economically recoverable REO 34 Table of Contents reserves, however, necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, such as: • geological, mining and processing conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience; • the strategic approach to mining and processing the deposit may change depending upon market demand, corporate strategy and other prevailing economic conditions; • assumptions concerning future prices of rare earth products, foreign exchange rates, process recovery rates, transportation costs, operating costs, capital costs, and reclamation costs; and • assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies and foreign government policy relating to import or export of rare earth products.
ITEM 2. PROPERTIES Mountain Pass The Company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (previously defined as “Mountain Pass”), which is located on 2,222 fee simple acres of land, approximately 50 miles southwest of Las Vegas, Nevada, near Mountain Pass, San Bernardino County, California, at geographic coordinates 35°28’56”N latitude and 115°31’54”W longitude.
ITEM 2. PROPERTIES Mountain Pass The Company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (previously defined as “Mountain Pass”), which is located on 2,232 fee simple acres of land, approximately 50 miles southwest of Las Vegas, Nevada, near Mountain Pass, San Bernardino County, California, at geographic coordinates 35°28’56”N latitude and 115°31’54”W longitude.
The Company holds the necessary permits to operate Mountain Pass, including conditional use and minor use permits from San Bernardino County, California, and an associated environmental impact report, all of which were issued in 2004, which currently allow continued operation of Mountain Pass through 2042, though the Company expects to extend such permits to allow for continued operation through at least 2056.
The Company holds the necessary permits to operate Mountain Pass, including conditional use and minor use permits from San Bernardino County, California, and an associated environmental impact report, all of which were issued in 2004, which currently allow continued operation of Mountain Pass through 2042, though the Company expects to extend such permits to allow for continued operation through at least 2053.
These mining claims and mill sites provide land for mining, ancillary facilities and expansion capacity around Mountain Pass. 26 Table of Contents Mountain Pass represents the largest commercial source of rare earth materials in the Western hemisphere. Molybdenum Corporation of America began REE mining operations at Mountain Pass in 1952.
These mining claims and mill sites provide land for mining, ancillary facilities, and expansion capacity around Mountain Pass. 27 Table of Contents Mountain Pass represents the largest commercial source of rare earth materials in the Western hemisphere. Molybdenum Corporation of America began REE mining operations at Mountain Pass in 1952.
QA/QC generated by previous laboratories has undergone check assays at independent third-party laboratories, and generally demonstrate no consistent bias. The quality analytical database is also supported by a limited 28 Table of Contents amount of blind quality control samples inserted during a re-assay program, including site-specific standards of known TREO content, a variety of duplicate samples, and blank samples.
QA/QC generated by previous laboratories has undergone check assays at independent third-party laboratories, and generally demonstrate no consistent bias. The quality analytical database is also supported by a limited amount of blind quality control samples inserted during a re-assay program, including site-specific standards of known TREO content, a variety of duplicate samples, and blank samples.
Mountain Pass includes an open-pit mine in the production stage, infrastructure supporting mining and processing operations, overburden and ore stockpiles, a crusher, a mill/flotation plant, hydrometallurgy facilities, separation plants, product finishing facilities, tailings processing and storage facilities, a water treatment plant, an idle chlor-alkali facility, and on-site evaporation ponds, as well as laboratory facilities to support product analysis and research and development activities, offices, maintenance shops, warehouses and support buildings.
Mountain Pass supports the Company’s Materials segment and includes an open-pit mine in the production stage, infrastructure supporting mining and processing operations, overburden and ore stockpiles, a crusher, a mill/flotation plant, hydrometallurgy facilities, separation plants, product finishing facilities, tailings processing and storage facilities, a water treatment plant, an idle chlor-alkali facility, and on-site evaporation ponds, as well as laboratory facilities to support product analysis and research and development activities, offices, maintenance shops, warehouses and support buildings.
The optimized pit shell selected to guide final pit design was based on a combination of the revenue factor (“RF”) 0.70 pit (used on the north half of the deposit) and the RF 1.00 pit shell (used on the south half of the deposit).
The optimized pit shell selected to guide final pit design was based on a combination of the revenue factor (“RF”) 0.45 pit (used on the north half of the deposit) and the RF 1.00 pit shell (used on the south half of the deposit).
For economic modeling of the mineral reserves, SRK assumed that 2024 production will be a combination of bastnaesite concentrate sales and sales of four individual REO products: neodymium and praseodymium (previously defined as “NdPr”) oxide; samarium, europium, and gadolinium (“SEG+”) oxalate; lanthanum carbonate; and cerium chloride.
For economic modeling of the mineral reserves, SRK assumed that production will be a combination of bastnaesite concentrate sales and sales of four individual REO products: neodymium and praseodymium (previously defined as “NdPr”) oxide; samarium, europium, and gadolinium (“SEG+”) precipitate; lanthanum carbonate; and cerium chloride.
The calculated COG for the reserves is 2.43% TREO, which was applied to indicated blocks contained within an ultimate pit, the design of which was guided by economic pit optimization.
The calculated COG for the reserves is 2.50% TREO, which was applied to indicated blocks contained within an ultimate pit, the design of which was guided by economic pit optimization.
Fort Worth Facility The Company owns approximately 18 acres of land in Fort Worth, Texas, on which it is constructing a metal, alloy, and magnet manufacturing facility as part of its Stage III strategy. The building and building improvements were substantially completed in the fourth quarter of 2023.
Independence Facility The Company owns approximately 18 acres of land in Fort Worth, Texas, on which it is developing Independence , a metal, alloy, and magnet manufacturing facility as part of its Stage III strategy. The building and building improvements were substantially completed in the fourth quarter of 2023.
The total orebody strike length is approximately 2,750 feet and dip extent is 3,000 feet; true thickness of the more than 2% total rare earth oxide (“TREO”) grade zone ranges between 15 feet and 250 feet.
The total orebody strike length is approximately 2,750 feet and dip extent is 3,000 feet; true thickness of the more than 2% total rare earth oxide (“TREO”) grade 28 Table of Contents zone ranges between 15 feet and 250 feet.
Pursuant to the requirements of Regulation S-K Subpart 1300 (“S-K 1300”), SRK prepared a pre-feasibility level Technical Report Summary for Mountain Pass with an effective date of October 1, 2023 (the “2023 TRS”) (refer to Exhibit 96.1 to this Annual Report).
Pursuant to the requirements of Regulation S-K Subpart 1300 (“S-K 1300”), SRK prepared a pre-feasibility level Technical Report Summary for Mountain Pass with an effective date of October 1, 2024 (the “2024 TRS”) (refer to Exhibit 96.1 to this Annual Report).
Corporate Office The Company has a lease for corporate office space at 1700 S. Pavilion Center Drive, Suite 800, Las Vegas, Nevada 89135. The lease has an initial term of 91 months expiring in October 2030, with an option to renew for one five-year period at the Company’s election.
The Independence Facility supports the Magnetics segment. Corporate Office The Company has a lease for corporate office space at 1700 S. Pavilion Center Drive, Suite 800, Las Vegas, Nevada 89135. The lease has an initial term of 91 months expiring in October 2030, with an option to renew for one five-year period at the Company’s election.
The following table states the amount of the Company’s proven and probable mineral reserves as of December 31, 2023.
The following table states the amount of the Company’s proven and probable mineral reserves as of December 31, 2024.
The Mountain Pass facilities and infrastructure, the majority of which were constructed between 2012 and 2023, are in good operating condition and benefit from routine maintenance. The net carrying amount of property, plant and equipment used in the operation of Mountain Pass was approximately $577 million as of December 31, 2023.
The Mountain Pass facilities and infrastructure, the majority of which were constructed between 2012 and 2023, are in good operating condition and benefit from routine maintenance. The net carrying amount of property, plant and equipment (excluding mineral rights) used in the operation of Mountain Pass was approximately $621 million as of December 31, 2024.
The difference as compared to the previous year is due to inferred resources located within the mineral reserve pit that were mined and processed during 2023, and a change in the mineral resource COG due to updated project economics.
The difference as compared to the previous year is due to inferred resources located within the mineral reserve pit that were mined and processed during 2024, assumed improvements in metallurgical recovery, and a change in the mineral resource COG due to updated project economics.
Since restarting operations at the facility in the fourth quarter of 2017, the Company’s activities initially focused on the milling and flotation processes, leading to production of a bastnaesite concentrate, rich in REE, with the first concentrate sales in the first quarter of 2018.
Since restarting operations at the facility in the fourth quarter of 2017, the Company’s activities initially focused on the milling and flotation processes, leading to production of a bastnaesite concentrate, rich in REE, with the first concentrate sales in the first quarter of 2018. In the second half of 2023, the Company commenced production of separated rare earth products.
Category Description Run-of-Mine TREO% MY% Concentrate Million Short Tons (dry) Million Short Tons (dry) Proven Current Stockpiles 0.64 4.28 3.68 0.02 In situ — — — — Proven Totals 0.64 4.28 3.68 0.02 Probable Current Stockpiles — — — — In situ 27.82 6.25 6.60 1.84 Probable Totals 27.82 6.25 6.60 1.84 Proven + Probable Current Stockpiles 0.64 4.28 3.68 0.02 In situ 27.82 6.25 6.60 1.84 Proven + Probable Totals 28.46 6.20 6.54 1.86 31 Table of Contents General Notes: • Reserves stated as contained within an economically mineable open pit design stated above a 2.43% TREO COG. • Mineral reserves tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. • MY% (mass yield) calculation is based on 60% concentrate grade of the product and the ore grade dependent metallurgical recovery.
Category Description Run-of-Mine TREO% MY% Concentrate Million Short Tons (dry) Million Short Tons (dry) Proven Current Stockpiles 0.81 4.06 4.15 0.03 In situ — — — — Proven Totals 0.81 4.06 4.15 0.03 Probable Current Stockpiles — — — — In situ 28.88 6.02 6.96 2.01 Probable Totals 28.88 6.02 6.96 2.01 Proven + Probable Current Stockpiles 0.81 4.06 4.15 0.03 In situ 28.88 6.02 6.96 2.01 Proven + Probable Totals 29.69 5.97 6.88 2.04 General Notes: • Reserves stated as contained within an economically mineable open pit design stated above a 2.50% TREO COG. • Mineral reserves tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. • MY% (mass yield) calculation is based on 60% concentrate grade of the product and the ore grade dependent metallurgical recovery.
The reference point for the mineral reserves is material delivered to the Mountain Pass mill and flotation facilities. Based on these estimated reserves, the Company’s expected remaining mine life is approximately 33 years (2024 through 2056) to complete the processing of stockpiles and separations.
The reference point for the mineral reserves is material delivered to the Mountain Pass crushing facility. Based on these estimated reserves, the Company’s expected remaining mine life as of December 31, 2024, is approximately 29 years (2025 through 2053) to complete the processing of stockpiles and separations.
The Mountain Pass REE deposit is located within an uplifted block of Precambrian metamorphic and igneous rocks that are bounded to the south and east by basin-fill deposits in California’s Ivanpah Valley.
The bastnaesite ore body at Mountain Pass has been mined as a principal source of REE for a period of over 60 years. The Mountain Pass REE deposit is located within an uplifted block of Precambrian metamorphic and igneous rocks that are bounded to the south and east by basin-fill deposits in California’s Ivanpah Valley.
It is noted that reserves depletion due to mining and processing during 2023 was partially offset by additional above COG material that was identified by closely spaced blasthole sampling.
The primary reasons for the differences between the two reserves estimates are: • The reserves were depleted by mining and processing that occurred during 2024. It is noted that reserves depletion due to mining and processing during 2024 was partially offset by additional above COG material that was identified by closely spaced blasthole sampling.
The depletion removed by SRK represents resources and reserves that were extracted from the Mountain Pass open pit from October 1, 2023, through December 31, 2023. 27 Table of Contents Mineral Resource and Mineral Reserve Definitions Mineral Resources Item 1300 of S-K 1300 defines a “mineral resource” as a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction.
Mineral Resource and Mineral Reserve Definitions Mineral Resources Item 1300 of S-K 1300 defines a “mineral resource” as a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction.
Mineral Reserves As of December 31, 2023, SRK estimates total proven reserves of 0.64 million STs of ore with an average grade of 4.28% TREO and 27.82 million STs of probable reserves with an average ore grade of 6.25%. The Company’s total proven and probable reserves are estimated as 28.46 million STs with an average grade of 6.20%.
Mineral Reserves As of December 31, 2024, SRK estimates total proven reserves of 0.81 million STs of ore with an average grade of 4.06% TREO and 28.88 million STs of probable reserves with an average ore grade of 6.02%. The Company’s total proven and probable reserves are estimated as 29.69 million STs with an average grade of 5.97%.
The mineral resource and mineral reserve estimated in the 2023 TRS were subsequently depleted by SRK to present an estimate of our resources and reserves as of December 31, 2023.
The mineral resource and mineral reserve estimated in the 2024 TRS were subsequently depleted by SRK to present an estimate of our resources and reserves as of December 31, 2024. The depletion removed by SRK represents resources and reserves that were extracted from the Mountain Pass open pit from October 1, 2024, through December 31, 2024.
For mineral resources, a revenue factor of 1.0 is selected which corresponds to a break-even pit shell volume. SRK notes that the pit selected for mineral resources has been influenced by setbacks relative to critical infrastructure such as the tailing storage and the mill and flotation facilities.
SRK notes that the pit selected for mineral resources has been influenced by setbacks relative to critical infrastructure such as the tailing storage and the mill and flotation facilities. A description of the methodology used to calculate mineral resources is provided in Exhibit 96.1 to this Annual Report.
The following table is provided to show the change in mineral resources from December 31, 2022, to December 31, 2023: Description Estimate Date Million Short Tons (dry) TREO La 2 O 3 CeO 2 Pr 6 O 11 Nd 2 O 3 Sm 2 O 3 (%) (%) (%) (%) (%) (%) Indicated Mineral Resources December 31, 2023 1.45 2.75 0.89 1.37 0.12 0.33 0.02 Indicated Mineral Resources December 31, 2022 1.43 2.83 0.92 1.41 0.12 0.34 0.03 Difference 0.02 (0.08) (0.03) (0.04) 0.00 (0.01) (0.01) % Difference (1) 1.4 % (2.8) % (2.8) % (2.7) % (2.0) % (2.1) % (21.6) % Inferred Mineral Resources December 31, 2023 9.09 5.05 1.65 2.52 0.21 0.61 0.04 Inferred Mineral Resources December 31, 2022 8.90 5.13 1.67 2.56 0.22 0.62 0.04 Difference 0.19 (0.08) (0.02) (0.04) (0.01) (0.01) 0.00 % Difference (1) 2.1 % (1.7)% (1.3)% (1.8)% (1.7)% (1.8)% (3.8)% (1) Percentages do not recompute as presented due to rounding.
While other REE, often referred to as HREE, are present in the deposit, they are not accounted for in this estimate due to historic data limitations. 32 Table of Contents The following table is provided to show the change in mineral resources from December 31, 2023, to December 31, 2024: Description Estimate Date Cut-off TREO (%) Million Short Tons (dry) TREO La 2 O 3 CeO 2 Pr 6 O 11 Nd 2 O 3 Sm 2 O 3 (%) (%) (%) (%) (%) (%) Indicated Mineral Resources December 31, 2024 2.35 4.35 3.71 1.21 1.85 0.16 0.45 0.03 Indicated Mineral Resources December 31, 2023 2.18 1.45 2.75 0.89 1.37 0.12 0.33 0.02 Difference 2.90 0.96 0.32 0.48 0.04 0.12 0.01 % Difference (1) 200.1 % 34.9 % 36.0 % 35.0 % 33.3 % 36.4 % 50.0 % Inferred Mineral Resources December 31, 2024 2.35 13.35 4.79 1.56 2.39 0.21 0.58 0.04 Inferred Mineral Resources December 31, 2023 2.18 9.09 5.05 1.65 2.52 0.21 0.61 0.04 Difference 4.26 (0.26) (0.09) (0.13) 0.00 (0.03) 0.00 % Difference (1) 46.9 % (5.1)% (5.5)% (5.2)% —% (4.9)% —% (1) Percentages may not recompute as presented due to rounding.
An “indicated mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling.
Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve. 29 Table of Contents An “indicated mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling.
Mountain Pass directly abuts Interstate 15 and may be accessed by existing hard-surface roads. Water at Mountain Pass is supplied through active water wells, pit dewatering, and process water recovery.
Mountain Pass directly abuts Interstate 15 and may be accessed by existing hard-surface roads. Water at Mountain Pass is supplied through active water wells, pit dewatering, and process water recovery. MP Materials’ facilities at Mountain Pass are powered by a natural gas-powered CHP plant, which produces electricity and steam, minimizing reliance on the regional electric power grid.
The following table is provided to show the change in reserves from December 31, 2022, to December 31, 2023: Description Estimate Date Run-of-Mine TREO% MY% Concentrate Million Short Tons (dry) Million Short Tons (dry) Proven + Probable Reserves December 31, 2023 28.46 6.20 6.54 1.86 Proven + Probable Reserves December 31, 2022 29.30 6.32 6.69 1.96 Difference (0.84) (0.12) (0.15) (0.10) % Difference (2.9)% (1.9)% (2.2)% (5.1)% The reason for the differences between the two estimates is due to reserves that were mined and processed during 2023.
The following table is provided to show the change in reserves from December 31, 2023, to December 31, 2024: Description Estimate Date Run-of-Mine TREO% MY% Concentrate Million Short Tons (dry) Million Short Tons (dry) Proven + Probable Reserves December 31, 2024 29.69 5.97 6.88 2.04 Proven + Probable Reserves December 31, 2023 28.46 6.20 6.54 1.86 Difference 1.23 (0.23) 0.34 0.18 % Difference (1) 4.3% (3.7)% 5.2% 9.8% (1) Percentages may not recompute as presented due to rounding.
Category Resource Type Cut-Off TREO (%) Mass Average Value Million Short Tons (dry) TREO (1) (%) La 2 O 3 (2) (%) CeO 2 (2) (%) Pr 6 O 11 (2) (%) Nd 2 O 3 (2) (%) Sm 2 O 3 (2) (%) Indicated Within the Reserve Pit 2.18 0.94 2.31 0.75 1.15 0.10 0.28 0.02 Within the Resource Pit 2.18 0.51 3.56 1.16 1.78 0.15 0.43 0.03 Total Indicated 2.18 1.45 2.75 0.89 1.37 0.12 0.33 0.02 Inferred Within the Reserve Pit 2.18 6.68 5.52 1.80 2.75 0.23 0.67 0.05 Within the Resource Pit 2.18 2.41 3.74 1.22 1.86 0.16 0.45 0.03 Total Inferred 2.18 9.09 5.05 1.65 2.52 0.21 0.61 0.04 (1) TREO% represents the total of individually assayed light rare earth oxides on a 99.7% basis of total contained TREO, based on the historical site analyses.
The reference point for mineral resources is in situ material. 31 Table of Contents Category Resource Type Cut-Off TREO (%) Mass Average Value Million Short Tons (dry) TREO (1) (%) La 2 O 3 (2) (%) CeO 2 (2) (%) Pr 6 O 11 (2) (%) Nd 2 O 3 (2) (%) Sm 2 O 3 (2) (%) Indicated Within the Reserve Pit 2.35 0.73 2.43 0.79 1.21 0.10 0.29 0.02 Within the Resource Pit 2.35 3.62 3.97 1.29 1.98 0.17 0.48 0.04 Total Indicated 2.35 4.35 3.71 1.21 1.85 0.16 0.45 0.03 Inferred Within the Reserve Pit 2.35 6.85 5.77 1.88 2.88 0.24 0.70 0.05 Within the Resource Pit 2.35 6.50 3.76 1.23 1.88 0.16 0.46 0.03 Total Inferred 2.35 13.35 4.79 1.56 2.39 0.21 0.58 0.04 (1) TREO% represents the total of individually assayed light rare earth oxides on a 99.7% basis of total contained TREO, based on the historical site analyses.
This above COG material was not included in the previous reserves estimate because the material had not been identified by the wider spaced resource drilling that informed the resource block model utilized for the 2023 TRS.
This above COG material was not included in the previous reserves estimate because the material had not been identified by the wider spaced resource drilling that informed the resource block model utilized for the 2023 TRS. • For the 2024 end-of-year reserves, it has been assumed that pre-concentration (ore sorting) will be applied to mined material having an in-situ grade that is in the 2.5% to 5.0% TREO grade range.
Mineral resources have been constrained within an optimized economic pit shell based on reserve input parameters, with the exception of the assumed equivalent concentrate price ($12,461 per dry short ton (“ST”) of 60% TREO concentrate), which is set 15% higher than the reserves price.
Mineral resources have been constrained within an optimized economic pit shell based on reserve input parameters, with the exception of the assumed REO selling prices, which are set 15% higher than the reserves price. For mineral resources, a revenue factor of 1.0 is selected which corresponds to a break-even pit shell volume.
Results Mineral Resources As of December 31, 2023, SRK estimates total indicated resources of 1.45 million STs with an average grade of 2.75% TREO and 9.09 million STs of inferred resources with an average grade of 5.05% TREO. Mineral resources are reported exclusive of mineral reserves. The reference point for mineral resources is in situ material.
Results Mineral Resources As of December 31, 2024, SRK estimates total indicated resources of 4.35 million STs with an average grade of 3.71% TREO and 13.35 million STs of inferred resources with an average grade of 4.79% TREO. Mineral resources are reported exclusive of mineral reserves.
An economic COG of 2.18% TREO has been developed to ensure that material reported as a mineral resource can satisfy the definition of having reasonable prospects for economic extraction as required for the SEC definition.
Bulk density is based on average density measurements collected from the various rock types over the years, and carbonatite density in particular is supported by extensive mining and processing experience with the materials. 30 Table of Contents An economic COG of 2.35% TREO has been developed to ensure that material reported as a mineral resource can satisfy the definition of having reasonable prospects for economic extraction as required for the SEC definition.
SRK generated a cash flow model which indicated positive economics for the LoM plan, which provides the basis for the reserves. Reserves within the new ultimate pit are sequenced for the remaining 33-year LoM (2024 through 2056). The costs used for pit optimization include estimated mining, processing, sustaining capital, transportation, and administrative costs, including an allocation of corporate costs.
Reserves within the new ultimate pit are sequenced for approximately 25 years (Q4 2024 through 2048), with processing of stockpile material to occur for a further approximately 5 years (2049 through early 2053). The costs used for pit optimization include estimated mining, processing, sustaining capital, transportation, and administrative costs, including an allocation of corporate costs.
During 2023 the Company completed construction of a separations facility at Mountain Pass that allows the Company to separate bastnaesite concentrate into four individual REO products for sale. The separations facility is currently ramping up and the Company expects the plant to operate at full design capacity by the end of 2024.
Mineral Reserves SRK developed a life-of-mine (“LoM”) plan for the Mountain Pass operation in support of mineral reserves. The Company operates a separations facility at Mountain Pass that allows it to separate bastnaesite concentrate into four individual REO products for sale.
There is no certainty that all or any part of the mineral resources estimated will be converted into the mineral reserves estimate. • Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, any apparent rounding errors are considered insignificant. • Mineral resource tonnage and grade are reported as diluted. 30 Table of Contents • The mineral resource model has been depleted for historical mining based on the December 31, 2023, pit topography. • Pit optimization is based on an average TREO% equivalent concentrate price of $12,461 per dry ST of 60% TREO concentrate, average mining cost at the pit exit of $1.70 per dry ST mined plus $0.068 per dry ST mined for each 15 feet bench above or below the pit exit, combined milling and SG&A costs of $78.94 per dry ST ore milled, separations facility costs of $1,551 per dry ST of 60% TREO concentrate treated, freight of $163 per ST of dry product shipped, sustaining capital costs of $30.48 per dry ST of ore mined, and overall pit slope angles of 39° to 45° including ramps. • The mineral resource statement reported herein only includes the REE cerium, lanthanum, neodymium, praseodymium, and samarium (often referred to as LREE).
There is no certainty that all or any part of the mineral resources estimated will be converted into the mineral reserves estimate. • Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, any apparent rounding errors are considered insignificant. • The mineral resource model has been depleted for historical mining based on the December 31, 2024, pit topography. • Pit optimization is based on pit slope angles of 39° to 45° including ramps and the following assumed prices: Rare Earth Mineral Concentrate $11.73 per kilogram (“kg”), PrNd Oxide $143.55/kg, SEG+ Precipitate $55.45/kg, La Carbonate $1.66/kg and Ce Chloride $2.96/kg. • Pit optimization is based on concentrator recovery that varies based on the grade of the ore fed to the concentrator.
MP Materials’ facilities at Mountain Pass are powered by a natural gas-powered CHP plant, which was installed at Mountain Pass to produce electricity and steam and to minimize or eliminate reliance on the regional electric power grid. As of December 31, 2023, approximately 1,118 acres of the 2,222 acres were in use (e.g., existing buildings, infrastructure or active disturbance).
As of December 31, 2024, approximately 1,128 acres of the 2,232 acres were in use (e.g., existing buildings, infrastructure or active disturbance).
Removed
In third quarter of 2023, the Company also commenced production of separated finished rare earth oxides and compounds. The bastnaesite ore body at Mountain Pass has been mined as a principal source of REE for a period of over 60 years.
Added
In the fourth quarter of 2024, the Company commissioned machinery and equipment used in the manufacturing of NdPr metal, including electrolysis cells, and placed into service certain other machinery and equipment necessary for the production of other magnetic precursor products, such as strip casters. Installation and c onstruction related to certain magnet manufacturing processes and equipment continues within the building.
Removed
Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Added
The Company further expects to install an ore sorting (pre-concentration) facility during 2025 to upgrade mined ore that is in the 2.5% to 5.0% TREO grade range. The Company expects that the separations and ore sorting facilities will both achieve full design capacity during 2026.
Removed
Bulk density is based on average density measurements collected from the various rock types over the years, and carbonatite density in particular is supported by extensive mining and processing experience with the materials.
Added
Pit optimization was performed based on prices that were established by the preliminary market study. The results of pit optimization guided the design and scheduling of the ultimate pit. SRK generated a cash flow model which indicated positive economics for the 30-year LoM plan, which provides the basis for the reserves.
Removed
The equivalent concentrate price used for pit optimization reflects the gross contained value realized from sales of the four individual REO products (see below) produced from the onsite separations facility.
Added
The average REO distribution in the concentrate is PrNd (15.7%), SEG+ (1.8%), Lanthanum (32.3%) and Cerium (50.2%).
Removed
The equivalent concentrate price is calculated based on (i) the expected percentage distribution of the REO products in the bastnaesite concentrate, (ii) the expected metallurgical recoveries for the separations facility and (iii) the expected sales prices for the REO products.
Added
Overall recoveries at the onsite separations plant as applied to concentrate containing on average 60% TREO are: PrNd Oxide (89.7%), SEG+ Precipitate (97.9%), La Carbonate (75.0%) and Ce Chloride (11.5%). • Pit optimization is based on the following costs: mining cost at the pit exit of $1.50 per ST mined plus $0.05 per ST mined for each 15 feet bench above or below the pit exit, sorted ore rehandling ($2.55 per ST of sorted ore mined); non-sorted ore rehandling ($2.17 per ST of non-sorted ore mined), crushing ($3.66 per ST of ore crushed); ore sorting ($1.80 per ST ore fed to ore sorters), concentrating ($50.05 per ST of ore fed to concentrator), general and administrative ($28.82 per ST of ore fed to the concentrator), separations (includes a fixed annual cost and a variable cost of $1,080.59 per ST of concentrate processed on site), finished product shipping ($146.92 per ST shipped) and sustaining capital ($33.23 per ST of ore fed to the concentrator). • The mineral resource statement reported herein only includes the REE cerium, lanthanum, neodymium, praseodymium, and samarium (often referred to as LREE).
Removed
For purposes of calculating the end-of-year (“EOY”) 2022 mineral resources, the equivalent concentrate price was reflected net of the operating costs of the separations facility, while the equivalent concentrate price for EOY 2023 mineral resources is reflected gross of these costs, with the operating costs instead included along with the other estimated operating costs (mining; processing; selling, general and administrative (“SG&A”); etc.) that were used in the pit optimization.
Added
The average REO distribution in the concentrate is PrNd (15.7%), SEG+ (1.8%), Lanthanum (32.3%) and Cerium (50.2%).
Removed
A description of the methodology used to calculate mineral resources is provided in Exhibit 96.1 to this Annual Report. Mineral Reserves SRK developed a life-of-mine (“LoM”) plan for the Mountain Pass operation in support of mineral reserves.
Added
Overall recoveries at the onsite separations plant as applied to concentrate containing on average 60% TREO are: PrNd Oxide (89.7%), SEG+ Precipitate (97.9%), La Carbonate (75.0%) and Ce Chloride (11.5%). • Pit optimization is based on the following costs: mining cost at the pit exit of $1.50 per ST mined plus $0.05 per ST mined for each 15 feet bench above or below the pit exit, sorted ore rehandling ($2.55 per ST of sorted ore mined); non-sorted ore rehandling ($2.17 per ST of non-sorted ore mined), crushing ($3.66 per ST of ore crushed); ore sorting ($1.80 per ST ore fed to ore sorters), concentrating ($50.05 per ST of ore fed to concentrator), general and administrative ($28.82 per ST of ore fed to the concentrator), separations (includes a fixed annual cost and a variable cost of $1,080.59 per ST of concentrate processed on site), finished product shipping ($146.92 per ST shipped) and sustaining capital ($33.23 per ST of ore fed to the concentrator). • Reserves contain material inside and outside permitted mining but within mineral lease. • Reserves assume 100% mining recovery. • The strip ratio for the remaining reserves is 5.8 to 1 (waste to ore ratio). • The mineral reserves were estimated by SRK.
Removed
From this evaluation, pit optimization was performed based on an equivalent concentrate price of $10,836 per dry ST of 60% TREO concentrate. The equivalent concentrate price reflects the gross contained value realized from sales of the four individual REO products produced from the onsite separations facility.
Added
As a result of pre-concentration, the average grade will be increased for the fraction of sorted material that is advanced to the concentrator.
Removed
The equivalent concentrate price is calculated based on (i) the expected percentage distribution of the REO products in the bastnaesite concentrate, (ii) the expected metallurgical recoveries for the separations facility and (iii) the expected sales prices for the REO products.
Added
This grade uplift, which is supported by the results of test work performed during 2023 and 2024 on Mountain Pass ores, is expected to allow for improved recovery because metallurgical recovery at the concentrator is positively correlated with feed grade. • For the 2024 end-of-year reserves, it also has been assumed that overall metallurgical recovery at the concentrator will improve due to the installation of a boiler that has enabled flotation to be conducted at a constant higher temperature, as well as new reagent testing and blending of historically problematic ores.
Removed
For purposes of calculating the EOY 2022 mineral reserves, the equivalent concentrate price was reflected net of the operating costs of the separations facility, while the equivalent concentrate price for EOY 2023 mineral reserves is reflected gross of these costs, with the operating costs instead included along with the other estimated operating costs (mining, processing, SG&A, etc.) that were used in the pit optimization. 29 Table of Contents The results of pit optimization guided the design and scheduling of the ultimate pit.
Added
The overall improvements in metallurgical recovery are supported by a plant monitoring campaign that was conducted to evaluate concentrator performance during July and August of 2024.
Removed
While other REE, often referred to as HREE, are present in the deposit, they are not accounted for in this estimate due to historic data limitations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−0 removed6 unchanged
Biggest changeAll rights reserved. 11/18/20 12/31/20 12/31/21 12/31/22 12/31/23 MP Materials Corp. $ 100.00 $ 213.19 $ 300.99 $ 160.90 $ 131.54 Russell 2000 Index $ 100.00 $ 128.68 $ 147.75 $ 117.55 $ 137.45 S&P MidCap 400 Index $ 100.00 $ 121.73 $ 151.87 $ 132.03 $ 153.74 Peer Group $ 100.00 $ 112.07 $ 170.93 $ 180.34 $ 186.27
Biggest changeAll rights reserved. 37 Table of Contents 11/18/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 MP Materials Corp. $ 100.00 $ 213.19 $ 300.99 $ 160.90 $ 131.54 $ 103.38 Russell 2000 Index $ 100.00 $ 128.68 $ 147.75 $ 117.55 $ 137.45 $ 153.31 S&P MidCap 400 Index $ 100.00 $ 121.73 $ 151.87 $ 132.03 $ 153.74 $ 175.15 2023 Peer Group $ 100.00 $ 112.07 $ 170.93 $ 180.34 $ 186.27 $ 161.46 2024 Peer Group $ 100.00 $ 111.57 $ 169.20 $ 165.18 $ 172.07 $ 147.47 ITEM 6. [RESERVED]
The stock price performance shown in this graph is based on historical data and is neither indicative of, nor intended to forecast, future stock price performance. *$100 invested on November 18, 2020, in stock or October 31, 2020, in index, including reinvestment of dividends. Fiscal year ended December 31 st . Copyright © 2024 Russell Investment Group.
The stock price performance shown in this graph is based on historical data and is neither indicative of, nor intended to forecast, future stock price performance. *$100 invested on November 18, 2020, in stock or October 31, 2020, in index, including reinvestment of dividends. Fiscal year ended December 31 st . Copyright © 2025 Russell Investment Group.
The total cumulative return calculations are for the period commencing November 18, 2020, for investments in stock, or October 31, 2020, for investments in index, and ending December 31, 2023, and include the reinvestment of dividends.
The total cumulative return calculations are for the period commencing November 18, 2020, for investments in stock, or October 31, 2020, for investments in index, and ending December 31, 2024, and include the reinvestment of dividends.
The peer group consists of the following companies: Albemarle Corporation, Westlake Chemical Corporation, CF Industries Holdings, Inc., Reliance Steel & Aluminum Co., The Mosaic Company, Steel Dynamics, Inc., Axalta Coating Systems Ltd., Ashland Global Holdings Inc., Quaker Chemical Corporation, Cleveland-Cliffs Inc., Alcoa Corporation, Commercial Metals Company, Cabot Corporation and Compass Minerals International, Inc.
The 2023 Peer Group consisted of the following companies: Albemarle Corporation, Westlake Chemical Corporation, CF Industries Holdings, Inc., Reliance Steel & Aluminum Co., The Mosaic Company, Steel Dynamics, Inc., Axalta Coating Systems Ltd., Ashland Global Holdings Inc., Quaker Chemical Corporation, Cleveland-Cliffs Inc., Alcoa Corporation, Commercial Metals Company, Cabot Corporation and Compass Minerals International, Inc.
Pursuant to the terms of the agreement to acquire the license, 152,504 shares were issued immediately and the remaining shares will be issued as follows: 43,573 shares on each of the first, second, and third anniversaries of the acquisition date and an additional 152,506 shares on the fourth anniversary of the acquisition date.
Pursuant to the terms of the agreement to acquire the license, 152,504 shares were issued immediately and 35 Table of Contents the remaining shares have been or will be issued as follows: 43,573 shares on each of the first, second, and third anniversaries of the acquisition date and an additional 152,506 shares on the fourth anniversary of the acquisition date.
Repurchase of Securities During the three months ended December 31, 2023, neither the Company nor any of its affiliates repurchased shares of the Company’s common stock registered under Section 12 of the Exchange Act. 33 Table of Contents Stock Performance Graph The following graph compares the cumulative total stockholder return for the Company’s common stock to the cumulative total returns for the Russell 2000 Index, S&P MidCap 400 Index and a peer group.
Repurchase of Securities During the three months ended December 31, 2024, neither the Company nor any of its affiliates repurchased shares of the Company’s common stock registered under Section 12 of the Exchange Act. 36 Table of Contents Stock Performance Graph The following graph compares the cumulative total stockholder return for the Company’s common stock to the cumulative total returns for the Russell 2000 Index, S&P MidCap 400 Index and peer groups (the “2023 Peer Group” and the “2024 Peer Group”).
Copyright © 2024 Standard & Poor’s, a division of S&P Global.
Copyright © 2025 Standard & Poor’s, a division of S&P Global.
Holders of Record According to Continental Stock Transfer & Trust Company, the Company’s transfer agent, there were 128 active holders of record of the Company’s common stock as of February 15, 2024.
Holders of Record According to Continental Stock Transfer & Trust Company, the Company’s transfer agent, there were 123 active holders of record of the Company’s common stock as of February 17, 2025.
Added
The Company evaluates its peer group on an annual basis to ensure the peer group closely aligns with the Company’s size and line of business. Effective December 31, 2024, the Company revised its peer group.
Added
The 2024 Peer Group consists of the following companies: Alcoa Corporation, Alpha Metallurgical Resources, Inc., Ashland Global Holdings Inc., Axalta Coating Systems Ltd., Cabot Corporation, The Chemours Company, Commercial Metals Company, Compass Minerals International, Inc., Element Solutions Inc., Hecla Mining Company, Materion Corporation, The Mosaic Company, Inc., Olin Corporation, and Quaker Chemical Corporation.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

127 edited+115 added−76 removed26 unchanged
Biggest changeDemand for REE The key demand drivers for REE are a diverse array of growing end markets, including: electric mobility (e.g., traction motors in passenger and commercial xEVs, etc.); renewable power generation (e.g., wind power generators); energy-efficient motors, pumps, and compressors (e.g., heating, ventilation and air conditioning (“HVAC”) systems, elevators, escalators, etc.); 38 Table of Contents industrial and service robotics (e.g., motors, actuators, brakes and sensors used in industrial and service robots); consumer and medical applications (e.g., smart phones and other mobile devices, computing devices, speakers and microphones, fiber optics, laser crystals, x-ray equipment, etc.); critical defense systems (e.g., guidance and control systems, avionics, global positioning systems, radar and sonar, drones, etc.); and catalysts and phosphors (e.g., vehicle emissions reduction, fuel refining, energy-efficient lighting, etc.).
Biggest changeDemand for REE The key demand drivers for REE are a diverse array of growing end markets, including electric mobility; industrial, consumer and professional service robotics; renewable power generation; energy-efficient motors, pumps, and compressors; consumer and medical applications; critical defense systems; and catalysts and phosphors.
Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs (including salaries, benefits, bonuses, and stock-based compensation) of our administrative functions such as executives, accounting and finance, legal, and information technology; professional services (including legal, regulatory, audit and others); certain engineering expenses; insurance, license and permit costs; corporate office lease cost; office supplies; and certain environmental, health and safety expenses.
Selling, general and administrative Selling, general and administrative (“SG&A”) expenses consist primarily of personnel costs (including salaries, benefits, bonuses, and stock-based compensation) of our administrative functions such as executives, accounting and finance, legal, and information technology; professional services (including legal, regulatory, audit and others); certain engineering expenses; insurance, license and permit costs; corporate office lease cost; office supplies; and certain environmental, health and safety expenses.
Start-up costs relate to costs associated with restarting an existing facility or commissioning a new facility, circuit or process of our production, manufacturing, or separations facilities prior to the achievement of commercial production, that do not qualify for capitalization.
Start-up costs Start-up costs relate to costs associated with restarting an existing facility or commissioning a new facility, circuit or process of our production, manufacturing, or separations facilities prior to the achievement of commercial production, that do not qualify for capitalization.
Advanced projects and development consists principally of costs incurred in connection with research and development of new processes or to significantly enhance our existing processes, and certain government contracts, as well as costs incurred to support growth initiatives or pursue other opportunities.
Advanced projects and development Advanced projects and development consists principally of costs incurred in connection with research and development of new processes or to significantly enhance our existing processes, and certain government contracts, as well as costs incurred to support growth initiatives or pursue other opportunities.
(2) Included in “Start-up costs” within our Consolidated Statements of Operations and excludes any applicable stock-based compensation, which is included in the “Stock-based compensation expense” line above.
(2) Included in “Start-up costs” within our Consolidated Statements of Operations and excludes any applicable stock-based compensation, which is included in the “Stock-based compensation expense” line above.
These costs include labor of incremental employees hired in advance to work directly on such commissioning activities, training costs, costs of testing and commissioning the new circuits and processes, and other related costs.
These costs include labor of incremental employees hired in advance to work directly on such commissioning activities, training costs, costs of testing and commissioning the new circuits and processes, and other related costs.
Given the nature and scale of the related costs and activities, management does not view these as normal, recurring operating expenses, but rather as non-recurring investments to initially develop our separations and magnet-making capabilities.
Given the nature and scale of the related costs and activities, management does not view these as normal, recurring operating expenses, but rather as non-recurring investments to initially develop our separations and magnet-making capabilities.
Therefore, we believe it is useful and necessary for investors to understand our core operating performance in current and future periods by excluding the impact of these start-up costs.
Therefore, we believe it is useful and necessary for investors to understand our core operating performance in current and future periods by excluding the impact of these start-up costs.
To the extent additional start-up costs are incurred in the future to expand our separations and magnet-making capabilities after initial achievement of commercial production (e.g., significantly expanding production capacity at an existing facility or building a new separations or magnet manufacturing facility), such costs would not be considered an adjustment for this non-GAAP financial measure.
To the extent additional start-up costs are incurred in the future to expand our separations and magnet-making capabilities after initial achievement of commercial production (e.g., significantly expanding production capacity at an existing facility or building a new separations or magnet manufacturing facility), such costs would not be considered an adjustment for this non-GAAP financial measure.
We present Adjusted Net Income and Adjusted Diluted EPS because it is used by management to evaluate our underlying operating and financial performance and trends. These non-GAAP financial measures are intended to supplement our GAAP results and should not be used as a substitute for financial measures presented in accordance with GAAP.
We present Adjusted Net Income (Loss) and Adjusted Diluted EPS because it is used by management to evaluate our underlying operating and financial performance and trends. These non-GAAP financial measures are intended to supplement our GAAP results and should not be used as a substitute for financial measures presented in accordance with GAAP.
Accordingly, the demand for our products may be impacted by demand for these downstream products, particularly the continued growth in xEVs. Despite the current macroeconomic conditions, we continue to believe we benefit from the growth of the rare earth market, particularly the market for NdPr and permanent magnets, and from several demand tailwinds for REE.
Accordingly, the demand for our products may be impacted by demand for these downstream products, particularly the continued growth in xEVs. Despite the current macroeconomic conditions, we continue to believe that we benefit from the growth of the rare earth market, particularly the market for NdPr and permanent magnets, and from several demand tailwinds for REE.
Prior to January 1, 2026, at their election, holders of the Convertible Notes may convert their outstanding notes under the following circumstances: (i) during any calendar quarter commencing with the third quarter of 2021 if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the indenture governing the Convertible Notes) per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) if we call any or all of the Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events set forth in the indenture governing the Convertible Notes.
Prior to January 1, 2026, at their election, holders of the 2026 Notes may convert their outstanding notes under the following circumstances: (i) during any calendar quarter commencing with the third quarter of 2021 if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “2026 Notes measurement period”) in which the trading price (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of 2026 Notes for each trading day of the 2026 Notes measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) if we call any or all of the 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events set forth in the indenture governing the 2026 Notes.
The significant decrease in the market price of rare earth products in 2023 negatively impacted our cash flows from operations and liquidity. Our current working capital needs relate mainly to our mining, beneficiation, and separation operations.
The significant decrease in the market price of rare earth products in 2023 and 2024 negatively impacted our cash flows from operations and liquidity. Our current working capital needs relate mainly to our mining, beneficiation, and separation operations.
In November 2023, we announced our “Upstream 60K” strategy whereby we intend to grow our annual REO Production Volume to approximately 60,000 MTs by expanding upstream capacity via investments in further beneficiation, including the ability to process alternative feedstocks and upgrade lower-grade feedstocks. We aim to achieve this initiative within the next four years with modest incremental capital investment.
In November 2023, we announced our “Upstream 60K” strategy whereby we intend to grow our annual REO Production Volume to approximately 60,000 MTs by expanding upstream capacity via investments in further beneficiation, including the ability to process alternative feedstocks and upgrade lower-grade feedstocks. We aim to achieve this initiative within the next three years with modest incremental capital investment.
On or after January 1, 2026, and prior to the maturity date of the Convertible Notes, holders may convert their outstanding notes at any time, regardless of the foregoing circumstances.
On or after January 1, 2026, and prior to the maturity date of the 2026 Notes, holders may convert their outstanding notes at any time, regardless of the foregoing circumstances.
If we undergo a fundamental change (as defined in the indenture governing the Convertible Notes), holders may require us to repurchase for cash all or any portion of their outstanding notes at a price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
If we undergo a fundamental change (as defined in the indenture governing the 2026 Notes), holders may require us to repurchase for cash all or any portion of their outstanding 2026 Notes at a price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
Consequently, only a small portion of these outstanding purchase orders relate to firm, non-cancelable and unconditional obligations. We have also entered into long-term supply arrangements for certain chemical reagents used in our operations, which is based on current consumption requirements.
Consequently, only a small portion of these outstanding purchase orders relate to firm, non-cancellable and unconditional obligations. We have also entered into long-term supply arrangements for certain chemical reagents used in our operations, which is based on current consumption requirements.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes appearing elsewhere in this annual report on Form 10-K for the year ended December 31, 2023 (this “Annual Report”).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes appearing elsewhere in this annual report on Form 10-K for the year ended December 31, 2024 (this “Annual Report”).
The timing lag may be the result of, or influenced by, factors such as the timing and duration of shipments or the time required to convert materials. In addition, quarterly production of concentrate is impacted by the timing of scheduled outages of our production facilities for maintenance, which typically occur in the second and fourth quarters.
The timing lag may be the result of, or influenced by, factors such as the timing and duration of shipments or the time required to convert materials. In addition, quarterly production of concentrate and separated products is impacted by the timing of scheduled outages of our production facilities for maintenance, which typically occur in the second and fourth quarters.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Comparison of the Years Ended December 31, 2022, 2021, and 2020,” of our annual report on Form 10-K for the year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission on February 28, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Comparison of the Years Ended December 31, 2023, 2022, and 2021,” of our annual report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission on February 28, 2024.
To calculate the income tax impact of such adjustments on a year-to-date basis, we utilize an effective tax rate equal to our income tax expense excluding material discrete costs and benefits, with any impacts of changes in effective tax rate being recognized in the current period.
To calculate the income tax impact of such adjustments on a year-to-date basis, we utilize an effective tax rate equal to our income tax expense or benefit excluding material discrete costs and benefits, with any impacts of changes in effective tax rate being recognized in the current period.
Although we believe that our cash flows from operations and cash on hand are adequate to meet our liquidity requirements for the foreseeable future, uncertainty continues to exist as to the market price of REO, as evidenced by the volatility experienced in 2022 and the significant decrease seen in 2023, primarily due to concerns over the global economic conditions and actual or perceived concerns over increases in the supply of and/or decreases in demand for rare earth products.
Although we believe that our cash flows from operations and cash on hand are adequate to meet our liquidity requirements for the foreseeable future, uncertainty continues to exist as to the market price of rare earth products, as evidenced by the volatility experienced in 2022 and the significant decrease in the market price of REO subsequently experienced, primarily due to concerns over the global economic conditions and actual or perceived concerns over increases in the supply of and/or decreases in demand for rare earth products.
Free Cash Flow We calculate Free Cash Flow as net cash provided by operating activities less additions to property, plant and equipment, net of proceeds from government awards used for construction. We believe Free Cash Flow is useful for comparing our ability to generate cash with that of our peers.
Free Cash Flow We calculate Free Cash Flow as net cash provided by or used in operating activities less additions to property, plant and equipment, net of proceeds from government awards used for construction. We believe Free Cash Flow is useful for comparing our ability to generate cash with that of our peers.
Asset Retirement Obligations We recognize asset retirement obligations for estimated costs of legally and contractually required closure, dismantlement, and reclamation activities associated with Mountain Pass. Asset retirement obligations are initially recognized at their estimated fair value in the period in which the obligation is incurred.
Asset Retirement Obligations (“ARO”) We recognize ARO for estimated costs of legally and contractually required closure, dismantlement, and reclamation activities associated with Mountain Pass. ARO are initially recognized at their estimated fair value in the period in which the obligation is incurred.
Income tax expense consists of an estimate of U.S. federal and state income taxes in the jurisdictions in which we conduct business, adjusted for federal, state and local allowable income tax benefits, the effect of permanent differences and any valuation allowance against deferred tax assets.
Income tax expense (benefit) Income tax expense or benefit consists of an estimate of U.S. federal and state income taxes in the jurisdictions in which we conduct business, adjusted for federal, state and local allowable income tax benefits, the effect of permanent differences and any valuation allowance against deferred tax assets.
NdPr Realized Price per KG We calculate the NdPr Realized Price per kilogram (“KG”) for a given period as the quotient of: (i) our NdPr oxide and metal sales, which are determined in accordance with GAAP, for a given period and (ii) our NdPr Sales Volume for the same period.
NdPr Realized Price per KG We calculate the NdPr Realized Price per kilogram (“KG”) for a given period as the quotient of: (i) our Materials segment NdPr oxide and metal sales, which are determined in accordance with GAAP, for a given period and (ii) our NdPr Sales Volume for the same period.
In addition, several of our current and potential competitors are government supported and may have access to substantially more capital, which may allow them to make similar or greater efficiency improvements or undercut market prices for our product.
In addition, several of our current and potential competitors are government supported and may have access to substantially more capital, which may allow them to make similar or greater efficiency improvements or undercut market prices for our products.
With the construction portion of our Stage II optimization project complete, our principal capital expenditure requirements relate mainly to further investment in Mountain Pass, including the development of the HREE Facility, Upstream 60K, and other growth and investment projects, completing the buildout of the Fort Worth Facility, as well as periodic repairs and maintenance of mining and rare earth processing equipment.
With the construction portion of our Stage II optimization project complete, our principal capital expenditure requirements relate mainly to further investment in Mountain Pass, including the development of the HREE Facility, Upstream 60K, and other growth and investment projects, completing the buildout of Independence, as well as periodic repairs and maintenance of mining and rare earth processing equipment.
The initial term of the New Offtake Agreement is two years, with the option for us to extend the term for an additional one-year period. The terms of the New Offtake Agreement are substantially the same as those of the Offtake Agreement with the exception of the addition of NdPr metal into the definition of non-concentrate rare earth products.
The initial term of the 2024 Offtake Agreement is two years, with the option for us to extend the term for an additional one-year period. The terms of the 2024 Offtake Agreement are substantially the same as those of the 2022 Offtake Agreement with the exception of the addition of NdPr metal into the definition of non-concentrate rare earth products.
Our REO Production Volume is a key indicator of our mining and processing capacity and efficiency. The rare earth concentrate is a processed, concentrated form of our mined rare earth-bearing ores.
REO Production Volume is a key indicator of the mining and processing capacity and efficiency of our upstream operations. The rare earth concentrate is a processed, concentrated form of our mined rare earth-bearing ores.
Although we base our estimates on historical experience and reevaluate our estimated timing and cash flows regularly, since the majority of the cash flows to settle our asset retirement obligations occur decades in the future, it is inherently difficult to accurately predict the ultimate cash flows used to settle such obligations.
Although we base our estimates on historical experience and reevaluate our estimated timing and cash flows regularly, since the majority of the cash flows to settle our ARO occur decades in the future, it is inherently difficult to accurately predict the ultimate cash flows used to settle such obligations.
A discussion of changes in our results of operations and cash flows between years ended December 31, 2022 and 2021, has been omitted from this Annual Report, but may be found in “Part II, Item 7.
A discussion of changes in our consolidated results of operations and cash flows between years ended December 31, 2023 and 2022, has been omitted from this Annual Report, but may be found in “Part II, Item 7.
Furthermore, we designed our Stage II process flow to capitalize on the inherent advantages of the bastnaesite ore at Mountain Pass, that is well-suited to low-cost refining by selectively eliminating the need to carry cerium, a lower-value mineral, through the separations process.
Furthermore, we designed our Stage II process flow to capitalize on the inherent advantages of the bastnaesite ore at Mountain Pass, which is well-suited to low-cost refining by selectively eliminating the need to carry cerium, a lower-value element, through the separations process.
Purchase Obligations: Our outstanding purchase obligations as of December 31, 2023, primarily consist of purchase orders initiated with vendors and suppliers in the ordinary course of business for operating and maintenance capital 45 Table of Contents expenditures that will be settled within one year. In certain instances, we are permitted to cancel, reschedule or adjust these orders.
Purchase Obligations: Our outstanding purchase obligations as of December 31, 2024, primarily consist of purchase orders initiated with vendors and suppliers in the ordinary course of business for operating and maintenance capital expenditures that will be settled within one year. In certain instances, we are permitted to cancel, reschedule or adjust these orders.
This measure refers to the REO content contained in the rare earth concentrate we produce and, beginning in the second quarter of 2023, includes volumes fed into downstream circuits for commissioning and starting up our separations facilities and for producing separated NdPr product, the latter of which is also included in our KPI, NdPr Production Volume.
This measure refers to the REO content contained in the rare earth concentrate we produce and, beginning in the second quarter of 2023, includes volumes fed into downstream circuits for commissioning and starting up our separations facilities and for producing separated rare earth products, a portion of which is also included in our KPI, NdPr Production Volume.
These results were achieved by optimizing the reagent scheme, reducing process temperatures, improving tailings facility management, and committing to operational excellence, which has allowed us to achieve approximately 92% uptime in 2023. Our Stage I optimization plan enabled us to achieve what we believe to be world-class production cost levels for rare earth concentrate.
These results were achieved by optimizing the reagent scheme, reducing process temperatures, improving tailings facility management, and committing to operational excellence, which allowed us to achieve record production levels in 2024. Our Stage I optimization plan has enabled us to achieve what we believe to be world-class production cost levels for rare earth concentrate.
Our integrated operations at Mountain Pass combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability.
Our integrated operations combine low production costs with high environmental standards, thereby restoring American leadership to a critical industry with a strong commitment to sustainability.
Relates to certain costs incurred in connection with the commissioning and starting up of our initial separations capability at Mountain Pass and our initial magnet-making capabilities at Fort Worth prior to the achievement of commercial production.
Relates to certain costs incurred in connection with the commissioning and starting up of our initial separations capability at Mountain Pass and our initial magnet-making capabilities at the Independence Facility prior to the achievement of commercial production.
Relates to certain costs incurred in connection with the commissioning and starting up of our initial separations capability at Mountain Pass and our initial magnet-making capabilities at Fort Worth prior to the achievement of commercial production.
Relates to certain costs incurred in connection with the commissioning and starting up of our initial separations capability at Mountain Pass and our initial magnet-making capabilities at the Independence Facility prior to the achievement of commercial production.
We expect to have a mix of contracts with customers where we will sell NdPr as (i) oxide, (ii) metal, where the amount of oxide required to produce such metal is variable, and (iii) metal, where we have a guarantee of the amount produced and sold based on the amount of oxide consumed.
For the Materials segment, we have a mix of contracts with customers where we sell NdPr as (i) oxide, (ii) metal, where the amount of oxide required to produce such metal is variable, and (iii) metal, where we have a guarantee of the amount produced and sold based on the amount of oxide consumed.
These estimates use an estimated economical cut-off grade of 2.43% total rare earth oxide. Based on these estimated reserves and our expected annual production rate of REO upon production ramp-up of Stage II, our expected mine life was approximately 33 years as of December 31, 2023.
These estimates use an estimated economical cut-off grade of 2.50% total rare earth oxide. Based on these estimated reserves and our expected annual production rate of REO upon production ramp-up of Stage II, our expected mine life was approximately 29 years as of December 31, 2024.
Actual, or perceived, decreases in demand for REE, whether through changes in technology or slower growth in the end markets that utilize REE, could result in a decline in the market price of REE, including NdPr, and/or result in pricing volatility.
Actual, or perceived, decreases in demand for REE, whether through changes in technology or slower growth in the end markets that utilize REE, could result in a decline in the market price of REE, including NdPr, and/or result in pricing volatility. We also operate in a competitive industry.
Leases: We have lease arrangements for certain equipment and facilities, including office space, vehicles and equipment used in our operations. As of December 31, 2023, we had future expected lease payment obligations totaling $10.4 million, with $1.7 million due within the next 12 months. See Note 11 , “Leases,” in the notes to the Consolidated Financial Statements for further information.
Leases: We have lease arrangements for certain equipment and facilities, including office space, vehicles and equipment used in our operations. As of December 31, 2024, we had future expected lease payment obligations totaling $9.1 million, with $2.0 million due within the next 12 months. See Note 11 , “Leases,” in the notes to the Consolidated Financial Statements for further information.
We calculate Adjusted Diluted EPS as our GAAP diluted EPS excluding the per share impact, using adjusted diluted weighted-average shares outstanding as the denominator, of stock-based compensation expense; initial start-up costs; transaction-related and other costs; gain or loss on disposals of long-lived assets; certain write-downs of inventories; tariff rebates; and other items that we do not consider representative of our underlying operations; adjusted to give effect to the income tax impact of such adjustments; and the release of valuation allowance.
We calculate Adjusted Diluted EPS as our GAAP diluted earnings or loss per share excluding the per share impact, using adjusted diluted weighted-average shares outstanding as the denominator, of stock-based compensation expense; initial start-up costs; transaction-related and other costs; gain or loss on disposals of long-lived assets; gain or loss on early extinguishment of debt; and other items that we do not consider representative of our underlying operations; adjusted to give effect to the income tax impact of such adjustments; and the release of valuation allowance.
We recognize revenue at the point in time control of the products transfers to the customer and, under our offtake agreements with Shenghe, our performance obligation is typically satisfied when we deliver products to the agreed-upon shipping point.
We recognize revenue at the point in time control of the products transfers to the customer and our performance obligation is typically satisfied when we deliver products to the agreed-upon shipping point.
Recently Adopted and Issued Accounting Pronouncements Recently adopted and issued accounting pronouncements are described in Note 2 , “Significant Accounting Policies,” in the notes to the Consolidated Financial Statements.
Recently Adopted and Issued Accounting Pronouncements Recently adopted and issued accounting pronouncements are described in Note 2 , “Significant Accounting Policies,” in the notes to the Consolidated Financial Statements. 57 Table of Contents
(1) Excludes depreciation, depletion and amortization. (2) Non-GAAP financial measures are defined and reconciled to the most directly comparable GAAP financial measures in the “Non-GAAP Financial Measures” section below. Rare earth concentrate revenue consists primarily of sales of traditional and roasted rare earth concentrate.
(1) Non-GAAP financial measures are defined and reconciled to the most directly comparable GAAP financial measures in the “Non-GAAP Financial Measures” section below. Revenue Rare earth concentrate revenue consists of sales of traditional and roasted rare earth concentrate.
However, as we continue to ramp up production of separated rare earth 41 Table of Contents materials, we expect that significant volumes of REO produced from Stage I operations will be retained for separation and not sold as concentrate.
However, as we continue to ramp up 47 Table of Contents production of separated rare earth materials, we expect that significant volumes of REO produced from upstream operations will continue to be consumed for separation and not sold as concentrate.
Adjusted EBITDA, Adjusted Net Income, 46 Table of Contents Adjusted Diluted EPS, Free Cash Flow, Production Costs, and Total Value Realized are not intended to be substitutes for any GAAP financial measures and, as calculated, may not be comparable to other similarly titled measures of performance or liquidity of other companies within our industry or in other industries.
Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Diluted EPS, and Free Cash Flow are not intended to be substitutes for any GAAP financial measures and, as calculated, may not be comparable to other similarly titled measures of performance or liquidity of other companies within our industry or in other industries.
Among other factors, differences between quarterly NdPr Production Volume and NdPr Sales Volume may be caused by the time required for the conversion of NdPr oxide to NdPr metal, including time in-transit.
Among other factors, differences between quarterly NdPr Production Volume and NdPr Sales Volume may be caused by the time required for the conversion of NdPr oxide to NdPr metal, including time in-transit, as well as differences in actual versus assumed yields of oxide to metal in the calculation of NdPr Sales Volume.
A unit, or MT, is considered sold once we recognize revenue on its sale as determined in accordance with GAAP. Our REO Sales Volume is a key measure of our ability to convert our concentrate production into revenue.
A unit, or MT, is considered sold once we recognize revenue on its sale as determined in accordance with generally accepted accounting principles in the United States (“GAAP”). Our REO Sales Volume is a key measure of our ability to convert our concentrate production into revenue.
Development of Our REE Refining and Downstream Manufacturing Capabilities Stage II advanced our operations from the production of rare earth concentrate to the separation of individual REE. The project incorporated upgrades and enhancements to the prior facility process flow intended to reliably produce separated REE at a low cost while minimizing our impact on the environment.
Stage II advanced our operations from the production of rare earth concentrate to the separation of individual REE. The Stage II optimization project incorporated upgrades and enhancements to the prior facility process flow to produce separated REE at a lower cost while minimizing our impact on the environment.
The adjusted effective tax rates were 25.9%, 16.3% and 17.5% for the years ended December 31, 2023, 2022 and 2021, respectively. See Note 12 , “Income Taxes, ” in the notes to the Consolidated Financial Statements for more information on the effective tax rate. (2) The Convertible Notes were antidilutive for GAAP purposes for the year ended December 31, 2023.
The adjusted effective tax rates were 31.3%, 25.9% and 16.3% for the years ended December 31, 2024, 2023 and 2022, respectively. See Note 12 , “Income Taxes,” in the notes to the Consolidated Financial Statements for more information on the effective tax rate.
Historically, our REO Sales Volume had generally tracked our REO Production Volume over time with slight period-to-period differences caused by the timing of shipments.
Until we commenced our midstream operations, our REO Sales Volume generally tracked our REO Production Volume over time with slight period-to-period differences caused by the timing of shipments.
Adjusted EBITDA We define Adjusted EBITDA as our GAAP net income before interest expense, net; income tax expense or benefit; and depreciation, depletion and amortization; further adjusted to eliminate the impact of stock-based compensation expense; initial start-up costs; transaction-related and other costs; accretion of asset retirement and environmental obligations; gain or loss on disposals of long-lived assets; certain write-downs of inventories; tariff rebates; and other income or loss.
Adjusted EBITDA We define Adjusted EBITDA as our GAAP net income or loss before interest expense, net; income tax expense or benefit; and depreciation, depletion and amortization; further adjusted to eliminate the impact of stock-based compensation expense; initial start-up costs; transaction-related and other costs; accretion of asset retirement and environmental obligations; gain or loss on disposals of long-lived assets; gain or loss on early extinguishment of debt; other income or loss; and other items that we do not consider representative of our underlying operations.
The success of our business reflects our ability to continue to manage our costs. Our production achievements in Stage I have provided economies of scale to lower production costs per MT of REO produced in concentrate.
Our production achievements in Stage I have provided economies of scale to lower production costs per MT of REO produced in concentrate.
As of December 31, 2023, SRK Consulting (U.S.), Inc., an independent consulting firm that we retained to assess our reserves, estimated total proven and probable reserves of 1.86 million short tons of REO contained in 28.46 million short tons of ore at Mountain Pass, with an average ore grade of 6.20%.
As of December 31, 2024, SRK Consulting (U.S.), Inc., an independent consulting firm that we retained to assess our reserves, estimated total proven and probable reserves of 2.04 million short tons of REO contained in 29.69 million short tons of ore at Mountain Pass, with an average ore grade of 5.97%.
For purposes of calculating Adjusted Diluted EPS, we have added back the assumed conversion of the Convertible Notes since they would not be antidilutive when using Adjusted Net Income as the numerator in the calculation of Adjusted Diluted EPS.
(4) For the year ended December 31, 2023, the 2026 Notes were antidilutive for GAAP purposes. For purposes of calculating Adjusted Diluted EPS, we have added back the assumed conversion of the 2026 Notes since they would not be antidilutive when using Adjusted Net Income (Loss) as the numerator in the calculation of Adjusted Diluted EPS.
We also operate in a competitive industry, and many of our key competitors are based in China, where competitors may not be subject to the same rigorous environmental standards and production costs are typically lower than in the U.S.
Many of our key competitors are based in China, where competitors may not be subject to the same rigorous environmental standards or may receive disproportionate government subsidies, and production costs are typically lower than in the U.S.
The following table presents a reconciliation of our Adjusted Net Income, which is a non-GAAP financial measure, to our net income, which is determined in accordance with GAAP: For the year ended December 31, (in thousands) 2023 2022 2021 Net income $ 24,307 $ 289,004 $ 135,037 Adjusted for: Stock-based compensation expense (1) 25,236 31,780 22,931 Initial start-up costs (2) 20,607 7,432 378 Transaction-related and other costs (3) 11,435 1,784 3,338 Loss on disposals of long-lived assets, net (4) 6,326 391 569 Write-down of inventories (4)(5) — — 1,809 Tariff rebate (6) — — (2,050) Other (7) (51) (273) (3,754) Tax impact of adjustments above (8) (16,482) (6,716) (4,071) Release of valuation allowance — (2,845) — Adjusted Net Income $ 71,378 $ 320,557 $ 154,187 (1) Principally included in “Selling, general and administrative” within our Consolidated Statements of Operations.
The following table presents a reconciliation of our Adjusted Net Income (Loss), which is a non-GAAP financial measure, to our net income or loss, which is determined in accordance with GAAP: For the year ended December 31, (in thousands) 2024 2023 2022 Net income (loss) $ (65,424) $ 24,307 $ 289,004 Adjusted for: Stock-based compensation expense (1) 23,183 25,236 31,780 Initial start-up costs (2) 5,303 20,607 7,432 Transaction-related and other costs (3) 8,367 11,435 1,784 Loss on environmental obligations (4) 1,998 — — Loss on disposals of long-lived assets, net (4) 1,421 6,326 391 Gain on early extinguishment of debt (52,911) — — Other — (51) (273) Tax impact of adjustments above (5) 3,959 (16,482) (6,716) Release of valuation allowance — — (2,845) Adjusted Net Income (Loss) $ (74,104) $ 71,378 $ 320,557 (1) Principally included in “Selling, general and administrative” within our Consolidated Statements of Operations.
Our REO Sales Volume for the year ended December 31, 2023, included both traditional concentrate as well as roasted concentrate. 37 Table of Contents Realized Price per REO MT We calculate the Realized Price per REO MT for a given period as the quotient of: (i) our rare earth concentrate sales, which are determined in accordance with GAAP, for a given period and (ii) our REO Sales Volume for the same period.
Realized Price per REO MT We calculate the Realized Price per REO MT for a given period as the quotient of: (i) our rare earth concentrate sales, which are determined in accordance with GAAP, for a given period and (ii) our REO Sales Volume for the same period.
These include the trend toward electrification; geographic supply chain diversification, particularly in relation to China; the U.S. government initiatives to restore domestic supply of critical minerals; and the increasing acceptance of environmental, social and governance mandates.
These include the trend toward electrification; geographic supply chain diversification, particularly in relation to China; the U.S. government initiatives to restore domestic supply of critical minerals; and the increasing requirement for environmentally-conscious production methods.
The following table presents a reconciliation of our Adjusted EBITDA, which is a non-GAAP financial measure, to our net income, which is determined in accordance with GAAP: For the year ended December 31, (in thousands) 2023 2022 2021 Net income $ 24,307 $ 289,004 $ 135,037 Adjusted for: Depreciation, depletion and amortization 55,709 18,356 24,382 Interest expense, net 5,254 5,786 8,904 Income tax expense 8,768 52,148 25,158 Stock-based compensation expense (1) 25,236 31,780 22,931 Initial start-up costs (2) 20,607 7,432 378 Transaction-related and other costs (3) 11,435 1,784 3,338 Accretion of asset retirement and environmental obligations (4) 908 1,477 2,375 Loss on disposals of long-lived assets, net (4) 6,326 391 569 Write-down of inventories (4)(5) — — 1,809 Tariff rebate (6) — — (2,050) Other income, net (7) (56,048) (19,527) (3,754) Adjusted EBITDA $ 102,502 $ 388,631 $ 219,077 (1) Principally included in “Selling, general and administrative” within our Consolidated Statements of Operations.
The following table presents a reconciliation of our Adjusted EBITDA, which is a non-GAAP financial measure, to our net income or loss, which is determined in accordance with GAAP: For the year ended December 31, (in thousands) 2024 2023 2022 Net income (loss) $ (65,424) $ 24,307 $ 289,004 Adjusted for: Depreciation, depletion and amortization 78,057 55,709 18,356 Interest expense, net 23,010 5,254 5,786 Income tax expense (benefit) (27,923) 8,768 52,148 Stock-based compensation expense (1) 23,183 25,236 31,780 Initial start-up costs (2) 5,303 20,607 7,432 Transaction-related and other costs (3) 8,367 11,435 1,784 Accretion of asset retirement and environmental obligations (4) 929 908 1,477 Loss on environmental obligations (4) 1,998 — — Loss on disposals of long-lived assets, net (4) 1,421 6,326 391 Gain on early extinguishment of debt (52,911) — — Other income, net (46,178) (56,048) (19,527) Adjusted EBITDA $ (50,168) $ 102,502 $ 388,631 (1) Principally included in “Selling, general and administrative” within our Consolidated Statements of Operations.
The sales price of rare earth concentrate sold to Shenghe under both agreements is based on an agreed-upon price per MT, with an adjustment for the ultimate market price of the product realized by Shenghe upon sales to their customers, including the impact of changes in the exchange rate between the Chinese Yuan and the U.S. dollar.
For the majority of our sales of rare earth concentrate, the sales price is based on preliminary market price per MT, with an adjustment for the ultimate market price of the product realized upon final sale, including the impact of changes in the exchange rate between the Chinese Yuan and the U.S. dollar.
A significant portion of the REO produced, which could otherwise have been sold as rare earth concentrate, was used to charge the Stage II circuits, establish separations work-in-process inventory, or produce packaged and finished separated rare earth products, the majority of which have not yet been sold.
The decrease in REO Sales Volume for the year ended December 31, 2023, as compared to the prior year, was due to the start-up of midstream operations, where a significant portion of the REO produced, which could otherwise have been sold as rare earth concentrate, was used to charge the Stage II circuits, establish separations work-in-process inventory, or produce packaged and finished separated rare earth products, the majority of which had not yet been sold.
Cost of sales (excluding depreciation, depletion and amortization) consists of production- and processing-related labor costs (including wages and salaries, benefits, bonuses, and stock-based compensation), mining and processing supplies (such as reagents), parts and labor for the maintenance of our mining fleet and processing facilities, other facilities-related costs (such as property taxes and utilities), packaging materials, and shipping and freight costs.
See the “ Materials Segment” section below for further discussion of year-over-year changes in revenue. 43 Table of Contents Cost of sales (excluding depreciation, depletion and amortization) Cost of sales (excluding depreciation, depletion and amortization) (“COS”) consists of mining, processing, and separations-related labor costs (including wages and salaries, benefits, bonuses, and stock-based compensation); mining, processing, and separations-related supplies and reagents; parts and labor for the maintenance of our mining fleet and processing and separating facilities; other facilities-related costs (such as property taxes and utilities); packaging materials; and shipping and freight costs.
As of December 31, 2023, we had $997.8 million of cash, cash equivalents and short-term investments and $690.0 million principal amount of long-term debt. Our results of operations and cash flows depend in large part upon the market prices of REO and particularly the price of rare earth concentrate.
As of December 31, 2024, we had $850.9 million of cash, cash equivalents and short-term investments and $930.5 million of principal amount of long-term debt. Our results of operations and cash flows depend in large part upon the market prices of rare earth products.
Other operating costs and expenses for the year ended December 31, 2023, increased by $5.4 million year over year as a result of $5.5 million in demolition costs associated with demolishing and removing certain out-of-use older facilities and infrastructure from the Mountain Pass site to accommodate future expansion in rare earth processing.
For the year ended December 31, $ Change % Change (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 2024 vs. 2023 2023 vs. 2022 Other operating costs and expenses $ 4,348 $ 7,234 $ 1,868 $ (2,886) $ 5,366 (40) % 287 % Other operating costs and expenses for the year ended December 31, 2024, decreased year over year as a result of $5.5 million of demolition costs incurred in 2023, associated with demolishing and removing certain out-of-use older facilities and infrastructure from the Mountain Pass site to accommodate future expansion in rare earth processing.
Accordingly, to the extent we are able to sell a greater portion of NdPr oxide and NdPr metal, we expect that rare earth concentrate revenue will decline in future periods.
As we ramp up production of separated rare earth products, we expect our NdPr oxide and metal revenue to become a larger portion of our total revenue. Accordingly, to the extent we sell a greater volume of NdPr oxide and NdPr metal, we expect that rare earth concentrate revenue will decline in future periods.
See Note 12 , “ Income Taxes ,” in the notes to the Consolidated Financial Statements for more information on the effective tax rate. 48 Table of Contents The following table presents a reconciliation of our Adjusted Diluted EPS, which is a non-GAAP financial measure, to our diluted EPS, which is determined in accordance with GAAP: For the year ended December 31, 2023 2022 2021 Diluted EPS $ 0.14 $ 1.52 $ 0.73 Adjusted for: Stock-based compensation expense 0.13 0.16 0.12 Initial start-up costs 0.11 0.04 — Transaction-related and other costs 0.06 0.01 0.02 Loss on disposals of long-lived assets, net 0.03 — — Write-down of inventories — — 0.01 Tariff rebate — — (0.01) Other — — (0.02) Tax impact of adjustments above (1) (0.08) (0.04) (0.02) Release of valuation allowance — (0.01) — Adjusted Diluted EPS $ 0.39 $ 1.68 $ 0.83 Diluted weighted-average shares outstanding 178,152,212 193,453,087 189,844,028 Assumed conversion of Convertible Notes (2) 15,584,409 — — Adjusted diluted weighted-average shares outstanding 193,736,621 193,453,087 189,844,028 (1) Tax impact of adjustments is calculated using an adjusted effective tax rate, which excludes the impact of discrete tax costs and benefits, to each adjustment.
The following table presents a reconciliation of our Adjusted Diluted EPS, which is a non-GAAP financial measure, to our diluted earnings or loss per share, which is determined in accordance with GAAP: For the year ended December 31, 2024 2023 2022 Diluted earnings (loss) per share $ (0.57) $ 0.14 $ 1.52 Adjusted for: Stock-based compensation expense 0.14 0.13 0.16 Initial start-up costs 0.03 0.11 0.04 Transaction-related and other costs 0.05 0.06 0.01 Loss on environmental obligations 0.01 — — Loss on disposals of long-lived assets, net 0.01 0.03 — Gain on early extinguishment of debt (0.32) — — Tax impact of adjustments above (1) 0.02 (0.08) (0.04) Release of valuation allowance — — (0.01) 2026 Notes if-converted method (2) 0.19 — — Adjusted Diluted EPS $ (0.44) $ 0.39 $ 1.68 Diluted weighted-average shares outstanding 169,882,640 178,152,212 193,453,087 Assumed conversion of 2026 Notes (3)(4) (3,042,029) 15,584,409 — Adjusted diluted weighted-average shares outstanding 166,840,611 193,736,621 193,453,087 (1) Tax impact of adjustments is calculated using an adjusted effective tax rate, which excludes the impact of discrete tax costs and benefits, to each adjustment.
Cash Flows The following table summarizes our cash flows: For the year ended December 31, Amount Change % Change (in thousands, except percentages) 2023 2022 2021 2023 vs 2022 2022 vs 2021 2023 vs 2022 2022 vs 2021 Net cash provided by (used in): Operating activities $ 62,699 $ 343,514 $ 101,971 $ (280,815) $ 241,543 (82) % 237 % Investing activities $ 68,697 $ (1,356,971) $ (119,363) $ 1,425,668 $ (1,237,608) N/M N/M Financing activities $ (9,917) $ (24,191) $ 666,109 $ 14,274 $ (690,300) (59) % N/M N/M = Not meaningful.
Cash Flows The following table summarizes our cash flows: For the year ended December 31, $ Change % Change (in thousands, except percentages) 2024 2023 2022 2024 vs 2023 2023 vs 2022 2024 vs 2023 2023 vs 2022 Net cash provided by (used in): Operating activities $ 13,349 $ 62,699 $ 343,514 $ (49,350) $ (280,815) (79) % (82) % Investing activities $ 10,057 $ 68,697 $ (1,356,971) $ (58,640) $ 1,425,668 (85) % N/M Financing activities $ (4,791) $ (9,917) $ (24,191) $ 5,126 $ 14,274 (52) % (59) % N/M = Not meaningful.
The effective tax rate for the year ended December 31, 2023, differed from the statutory tax rate of 21% primarily due to a deduction limitation on officers’ compensation and a valuation against certain deferred tax assets, offset by the California Competes Tax Credit.
The effective tax rate for the year ended December 31, 2024, differed from the statutory tax rate of 21% primarily due to state income tax expense, percentage depletion in excess of basis, the 45X Credit, and the California Competes Tax Credit, offset by a deduction limitation on officers’ compensation.
Debt and Other Long-Term Obligations Convertible Notes: In March 2021, we issued $690.0 million aggregate principal amount of 0.25% unsecured green convertible senior notes that mature, unless earlier converted, redeemed or repurchased, on April 1, 2026 (the “Convertible Notes”), at a price of par.
Debt and Other Long-Term Obligations 2026 Notes: In March 2021, we issued $690.0 million in aggregate principal amount of 0.25% unsecured convertible senior notes at a price of par. Interest on the 2026 Notes is payable on April 1 st and October 1 st of each year, beginning on October 1, 2021.
The transaction price with Shenghe is typically based on an agreed-upon price per MT, with an adjustment for the ultimate market price of the product realized by Shenghe in their sales to their customers, further adjusted for certain contractually negotiated amounts.
The transaction price for our rare earth concentrate products is typically based on a preliminary market price per MT, with an adjustment for the ultimate market price of the product realized by Shenghe upon sales to their customers.
In addition, following certain corporate events that occur prior to the maturity date of the Convertible Notes or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for holders who elect to convert their outstanding notes in connection with such corporate event or notice of redemption, as the case may be.
In addition, following certain corporate events that occur prior to the maturity date of the 2026 Notes or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for holders who elect to convert their outstanding 2026 Notes in connection with such corporate event or notice of redemption, as the case may be. 2030 Notes: In March 2024, we issued $747.5 million in aggregate principal amount of 3.00% unsecured convertible senior notes that mature, unless earlier converted, redeemed or repurchased, on March 1, 2030, at a price of par.
The reintroduction of the oxidizing roasting circuit allows subsequent stages of the production process to occur at lower temperatures, and with lower volumes of materials and reagents, which supports lower operating and maintenance costs and higher uptime than would otherwise be achievable. During the third quarter of 2023, we began producing separated rare earth products.
The reintroduction of the oxidizing roasting circuit allows subsequent stages of the production process to occur at lower temperatures, and with lower volumes of materials and reagents, which supports lower operating and maintenance costs and higher uptime than would otherwise be achievable. The success of our business reflects our ability to continue to manage our costs and drive scale.
The following table presents our KPIs: Year ended December 31, Amount Change % Change (in whole units or dollars, except percentages) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 Rare earth concentrate REO Production Volume (MTs) 41,557 42,499 42,413 (942) 86 (2) % — % REO Sales Volume (MTs) 36,837 43,198 42,158 (6,361) 1,040 (15) % 2 % Realized Price per REO MT $ 6,854 $ 11,974 $ 7,745 $ (5,120) $ 4,229 (43) % 55 % Production Cost per REO MT $ 2,058 $ 1,728 $ 1,493 $ 330 $ 235 19 % 16 % Separated NdPr products NdPr Production Volume (MTs) 200 N/A N/A N/A N/A N/A N/A NdPr Sales Volume (MTs) 10 N/A N/A N/A N/A N/A N/A NdPr Realized Price per KG $ 70 N/A N/A N/A N/A N/A N/A N/A = Not applicable as there was neither NdPr production nor sales volume in these periods.
KPIs Year ended December 31, Amount Change % Change (in whole units or dollars, except percentages) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 2024 vs. 2023 2023 vs. 2022 Rare earth concentrate (1) REO Production Volume (MTs) 45,455 41,557 42,499 3,898 (942) 9 % (2) % REO Sales Volume (MTs) 32,703 36,837 43,198 (4,134) (6,361) (11) % (15) % Realized Price per REO MT $ 4,414 $ 6,854 $ 11,974 $ (2,440) $ (5,120) (36) % (43) % Separated NdPr products (1) NdPr Production Volume (MTs) 1,294 200 N/A 1,094 N/A 547 % N/A NdPr Sales Volume (MTs) 1,142 10 N/A 1,132 N/A N/M N/A NdPr Realized Price per KG $ 51 $ 70 N/A $ (19) N/A (27) % N/A N/A = Not applicable as there was neither NdPr production nor sales volume in the year ended December 31, 2022.
The decline in the market prices for rare earth products in 2023 was largely attributable to lower than anticipated growth in demand for magnetic products, which negatively impacted the price of REE. The decrease in REO Sales Volume for the year ended December 31, 2023, was due to the start-up of Stage II operations.
The decline in the market prices for rare earth products in 2024 and 2023 was largely attributable to lower than anticipated growth in demand for magnetic products, which negatively impacted the price of REE.
We expect our Stage III efforts to continue to benefit from geopolitical developments, including initiatives to repatriate critical materials supply chains. Our Mineral Reserves Our ore body has proven over more than 60 years of operations to be one of the world’s largest and highest-grade rare earth resources.
Our Mineral Reserves Our ore body has proven over more than 60 years of operations to be one of the world’s largest and highest-grade rare earth resources.
(3) Principally included in “Advanced projects and development” within our Consolidated Statements of Operations, and pertains to legal, consulting, and advisory services, and other costs associated with specific transactions, including potential acquisitions, mergers, or other investments. (4) Included in “Other operating costs and expenses” within our Consolidated Statements of Operations.
(3) Pertains to legal, consulting, and advisory services, and other costs associated with specific transactions, including potential acquisitions, mergers, or other investments. For the year ended December 31, 2024, amount is principally included in “Selling, general and administrative” within our Consolidated Statements of Operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk We had cash, cash equivalents and short-term investments totaling $997.8 million as of December 31, 2023, of which $995.0 million was invested in money market funds, U.S. Treasury and agency securities, commercial paper and certificates of deposit. Our cash, cash equivalents and short-term investments are held for working capital and general corporate purposes.
Biggest changeSee Note 10 , “Debt Obligations,” in the notes to the Consolidated Financial Statements for further information on our Convertible Notes. Cash equivalents and short-term investments We had cash, cash equivalents and short-term investments totaling $850.9 million as of December 31, 2024, of which $849.0 million was invested in money market funds, U.S.
Commodity Price Risk Our results of operations depend in large part upon the market prices of REO and particularly the price of rare earth concentrate.
Commodity Price Risk Our results of operations depend in large part upon the market prices of REO and particularly the price of rare earth concentrate and NdPr.
As of December 31, 2023, a hypothetical increase of 100-basis points in interest rates would not have a material impact on the value of our cash equivalents or short-term investments in our Consolidated Financial Statements. 52 Table of Contents
As of December 31, 2024, a hypothetical increase of 100-basis points in interest rates would not have a material impact on the value of our cash equivalents or short-term investments in our Consolidated Financial Statements. 59 Table of Contents
When possible, we seek to limit our exposure by entering into long-term contracts and price increase limitations in contracts. Also, we currently use natural gas to operate our CHP plant, which powers our processing and separations facilities at Mountain Pass, and expect to use natural gas to power backup generators at our Fort Worth Facility in the future.
When possible, we seek to limit our exposure by entering into long-term contracts and price increase limitations in contracts. Also, we use natural gas to operate our CHP plant, which powers our processing and separations facilities at Mountain Pass, and to power backup generators at the Independence Facility.
Rare earth concentrate is not quoted on any major commodities market or exchange as product attributes vary and demand is currently constrained to a relatively limited number of refiners, a significant majority of which are based in China. 51 Table of Contents NdPr represents a significant portion of the economic value of our rare earth concentrate.
Rare earth concentrate is not quoted on any major commodities market or exchange as product attributes vary and demand is currently constrained to a relatively limited number of refiners, a significant majority of which are based in China. NdPr pricing is primarily based off of indices in China.
We expect demand for NdPr to continue to grow, driving demand for our concentrate, separated NdPr oxide, and in the future, permanent magnets containing NdPr.
NdPr represents a significant portion of the economic value of our rare earth concentrate. We expect demand for NdPr to continue to grow, driving demand for our concentrate, separated NdPr oxide, and in the future, permanent magnets containing NdPr.
We have not historically entered into investments for trading or speculative purposes. Our cash equivalents and short-term investments are subject to market risk due to changes in interest rates. Fixed-rate securities may have their market value adversely affected due to a rise in interest rates.
Treasury and agency securities, commercial paper and certificates of deposit. Our cash, cash equivalents and short-term investments are held for working capital and general corporate purposes. We have not historically entered into investments for trading or speculative purposes. Our cash equivalents and short-term investments are subject to market risk due to changes in interest rates.
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Equity Market and Interest Rate Risk Convertible Notes While the fair values of our Convertible Notes are subject to interest rate risk, market risk and other factors due to their convertible feature, the Convertible Notes are more sensitive to the equity market price volatility of our stock price than changes in interest rates.
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In March 2024, in connection with the offering of the 2030 Notes, we entered into Capped Call Options with the Counterparties. The Capped Call Options are expected generally to reduce the potential dilution to our common stock upon any conversion of the 2030 Notes.
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The fair values of our Convertible Notes will generally increase as the price of our common stock increases and will generally decrease as the price of our common stock declines in value.
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The interest and market value changes affect the fair value of our Convertible Notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligations. Generally, the fair values of our Convertible Notes will increase as interest rates fall and decrease as interest rates rise.
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Over the past several years, the Federal Reserve raised interest rates in an effort to combat high inflation; however, with recent indicators that inflation is moderating, the Federal Reserve has recently begun to reduce interest rates. 58 Table of Contents Despite this shift in U.S. policy, uncertainty persists in the market and economic conditions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies, related to concerns over inflation risk.
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Fixed-rate securities may have their market value adversely affected due to a rise in interest rates.

Other MP 10-K year-over-year comparisons