MP Materials Corp. / DE

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business: MP Materials Corp., including its subsidiaries (the “Company” or “MP Materials”), is the largest producer of rare earth materials in the Western Hemisphere. 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. The Company is also developing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (the “Independence Facility”), where the Company produces and sells magnetic precursor products and anticipates manufacturing neodymium-iron-boron (“NdFeB”) permanent magnets by the end of 2025. The Company’s operations are organized intotwo reportable segments: Materials and Magnetics. See Note 20, “Segment Reporting,” for additional information.

The Materials segment represents the upstream and midstream operations of the Company, which primarily consist of Mountain Pass, a fully integrated mining and refining facility producing refined rare earth oxides and related products. The Materials segment generates revenue primarily from sales of neodymium-praseodymium (“NdPr”) oxide and metal, primarily sold to customers in Japan, South Korea, and broader Asia. The Materials segment historically generated the majority of its revenue from sales of rare earth concentrate primarily under the Shenghe Offtake Agreement to Shenghe, a related party of the Company (as such terms are defined in Note 19, “Related-Party Transactions”), that, in turn, typically sold such product to refiners in China. In April 2025, in response to China’s retaliatory tariffs and export controls, the Company made the strategic decision to cease shipments of rare earth concentrate to China. In July 2025, to align with the terms of the DoD Transaction Agreements (as defined in Note 22, “Subsequent Events”) and in further support of its domestic supply chain objectives, the Company agreed to cease all future sales of its products to China and determined it would not exercise its right to extend the term of the Shenghe Offtake Agreement when it expires in January 2026.

The Magnetics segment represents the downstream magnet manufacturing and related operations of the Company, which currently consist of the Independence Facility, a fully integrated metal, alloy, and magnet manufacturing plant. The Magnetics segment began generating revenue from sales of magnetic precursor products to General Motors Company (NYSE: GM) (“GM”) in the U.S. in the first quarter of 2025.

On July 10, 2025, the Company announced a public-private partnership with the United States Department of Defense (the “DoD”), as further described in Note 22, “Subsequent Events.” Under the terms of the agreements with the DoD, the Company will expand its Independence Facility and construct a second domestic magnet manufacturing facility (the “10X Facility”), accelerate and expand its heavy rare earth elements (“HREE”) refining capacity at Mountain Pass, and undertake several other growth initiatives. These commitments are underpinned by the long-term agreements with the DoD, including the purchase in full of all magnets produced at the 10X Facility with a minimum facility EBITDA (as defined in the offtake agreement with the DoD), a floor price commitment for all NdPr products sold or stockpiled, as well as other commitments and features as further described in Note 22, “Subsequent Events.” As part of the agreements with the DoD and as noted above, the Company will cease sales of all products to China and prioritize a vibrant domestic and ex-China supply chain for rare earth products.

The cash flows and profitability of the Company’s operations have historically been significantly affected by the market price of rare earth products, which are generally also impacted by taxes and tariffs. While this volatility will be reduced following the effectiveness of the floor price commitment under the agreements with the DoD, certain exposure to market prices remains. The prices of rare earth products are affected by numerous factors beyond the Company’s control. The products of the Company are sold globally, with a primary focus in the Asian market due to the refining, metallization, and magnet manufacturing capabilities of the region. See the“Concentration of Risk” section in Note 2, “Significant Accounting Policies,” for additional information. Rare earth products are critical inputs in hundreds of existing and emerging clean-tech applications including electric vehicles and wind turbines as well as robotics, drones, and defense applications.

Basis of Presentation: The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission and are presented in U.S. dollars. Accordingly, since they are interim statements, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited Condensed Consolidated Financial

Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Form 10-K.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The unaudited Condensed Consolidated Financial Statements include the accounts of MP Materials Corp. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates: The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from those estimates.