MP Materials Corp. / DE

Public Offering of Common Stock

On July 18, 2025, we completed an underwritten public offering, with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC. as representatives of several underwriters (collectively, the “Underwriters”), relating to the issuance of 11,818,181 shares of our common stock, par value $0.0001 per share, at a price to the public of $55.00 per share (the “Offering”). The Underwriters purchased the shares of our common stock at a price of $53.35 per share. We also granted the underwriters a 30-day option, which was exercised in full, to purchase up to an additional 1,772,727 shares of our common stock, solely to cover over-allotments, at the public offering price less the underwriting discount. Our net proceeds from the Offering are expected to be approximately $724 million, after deducting our underwriting discounts and commissions and other estimated offering expenses. We currently intend to use the net proceeds from the Offering to fund the acceleration and expansion of our operations, including the 10X Facility (as such term is defined below), for strategic growth opportunities and for general corporate purposes.

Agreement with Apple Inc.

On July 14, 2025, we entered into a definitive, long-term supply agreement with Apple Inc. (NASDAQ: AAPL) (“Apple”) for the development, manufacture, and supply of magnets from our Independence Facility, as well as the development and installation of scaled recycling capabilities at Mountain Pass to produce the contained rare earths from post-industrial and post-consumer recycled rare earth feedstocks. In connection with the agreement, and subject to achieving specified milestones, Apple agreed to make prepayments in the aggregate amount of $200 million for the purchase of magnets from us.

Public-Private Partnership with U.S. Department of Defense

On July 9, 2025, we entered into definitive agreements (collectively, the “DoD Transaction Agreements”) establishing a transformational public-private partnership with the United States Department of Defense (the “DoD”) to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency (the “DoD Transactions”).

Development, Supply and Pricing Commitments

As part of the DoD Transactions, we agreed to use reasonable best efforts to build our planned 10X Magnet Manufacturing Facility (the “10X Facility”) to produce sintered NdFeB permanent magnet blocks and/or other finished magnets. Additionally, we agreed to use reasonable best efforts to (i) expand heavy rare earth elements (“HREE”) refining capacity at Mountain Pass, which, after the DoD extends the Samarium Project Loan (as defined below) to us in accordance with the DoD Transaction Agreements, will include separation of samarium oxide, (ii) recommission the chlor-alkali facilities at Mountain Pass and (iii) expand capacity at the Independence Facility to a projected 3,000 metric tons (“MTs”) of magnets annually. We have also agreed to use up to $600 million of our existing cash to fund these projects.

Under the NdPr price floor protection agreement (the “PPA”), the DoD will pay us a quarterly payment per kilogram (“KG”) of NdPr produced by us equal to the shortfall between $110 per KG and the Benchmark Quarterly Average Volume Weighted Price (as defined in the PPA). If, after the 10X Facility reaches full production capacity, the Benchmark Quarterly Average Volume Weighted Price for the prior quarter exceeds $110 per KG, the DoD will be entitled to receive 30% of the NdPr sales price which exceeds $110 per KG. The term of the PPA will commence on the first day of the fourth quarter of 2025 and will continue for ten years and will apply to all of our products that contain NdPr (i.e., concentrate, oxide and metal).

The PPA provides that we will prioritize the supply of NdPr first to magnet manufacturing, with excess volumes remaining available for sale to commercial customers, subject to a prohibition on sales to certain Restricted Buyers (as defined in the PPA) and certain other obligations.

Pursuant to the terms of the offtake agreement (the “DoD Offtake Agreement”), the DoD agreed to purchase the entire quantity of magnets produced at the 10X Facility; provided however, that up to 100% of magnet production may be syndicated to commercial and other customers under certain conditions. The DoD Offtake Agreement has a term of ten years following the Commercial Operation Date (as defined in the DoD Offtake Agreement) of the 10X Facility. In accordance with the DoD Offtake Agreement, the 10X Facility will generate at least $140 million of EBITDA (as defined in the DoD Offtake Agreement) on an annual basis after reaching full production capacity, adjusted annually in each calendar year following 2025 for inflation at a rate equal to 2% (the “Threshold EBITDA Amount”). The DoD will also acquire magnets from us at a price equal to the production costs incurred in connection with the production of magnets at the 10X Facility.

The DoD will make quarterly payments to us in an amount equal to 25% of the applicable Threshold EBITDA Amount. Once the 10X Facility begins producing magnets at target levels, in the event that any portion of the magnet production from the 10X Facility in an applicable year is syndicated to third-party purchasers, the DoD will be entitled to receive (i) the first $30 million of EBITDA attributed to the 10X Facility magnet production that exceeds the Threshold EBITDA Amount (the “Initial Excess Amount”) and (ii) 50% of the EBITDA attributable to the 10X Facility magnet production that exceeds the Initial Excess Amount on an annual basis in that year. Before the Commercial Operation Date, the DoD will also make payments in respect of certain incremental costs incurred by us including in connection with the engineering, development and start up of the 10X Facility and for designing magnets to the DoD’s specifications, with such payments being capped at $30 million in any calendar year. The DoD Offtake Agreement also prohibits magnet sales to certain Restricted Buyers and imposes certain other obligations.

We also agreed to terminate our existing share repurchase program and to cease making sales under the Shenghe Offtake Agreement (as defined in Note 19, “Related-Party Transactions,” in the notes to the unaudited Condensed Consolidated Financial Statements), which expires in January 2026, and will not be renewed.

Financings

As part of the financing for the projects described above, we sold to the DoD $400 million of newly created Series A Cumulative Perpetual Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”). The Series A Preferred Stock is convertible by the initial holder thereof at any time and from time to time after 45 days of issuance into approximately 13.3 million shares of our common stock, subject to customary adjustments for stock splits, combinations, non-cash dividends and certain corporate transactions.

Shares of the Series A Preferred Stock accrue cumulative dividends at a rate of 7.0% per year (the “Dividend Rate”), compounding quarterly and payable solely in-kind through an increase to the stated value of each share of Series A Preferred Stock (each such Dividend, a “PIK Dividend”). While the terms of the Series A Preferred Stock do not restrict the payment of cash dividends by the Company, within the first 15 business days of each new fiscal year, we will pay to the holder of each share of Series A Preferred Stock, on an as-converted basis, cash per share of common stock representing the amount, if any, by which the annual yield of the aggregate cash dividends paid by us on each share of common stock in the prior fiscal year exceeded the Dividend Rate.

At any time after the five year anniversary of issuance, if the closing price per share of common stock exceeds 150% of the then-current conversion price for at least 20 trading days in any period of 30 consecutive trading days, we will have the option to require all or any portion of the then-outstanding shares of Series A Preferred Stock be converted into common stock at the then-current conversion price, subject to certain liquidity and other conditions.

We also issued a warrant (the “Warrant”) to the DoD, exercisable at any time and from time to time after 45 days of issuance for a period of 10 years for up to 11,201,659 shares of our common stock, at an initial exercise price of $30.03 per share, such price subject to certain anti-dilution adjustments. In the aggregate, the common stock into which the Series A Preferred Stock is initially convertible and for which the Warrant is initially exercisable collectively represent 15% of the issued and outstanding shares of our common stock as of July 9, 2025 without giving effect to the issuance of such shares.

In addition to the issuance of securities, JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA agreed to provide committed secured financing, subject to customary terms and conditions, in an amount equal to, in the aggregate, at least $1 billion, $650 million of which will, pursuant to the terms of the committed secured financing, be specifically allocated to the construction of the 10X Facility; provided, that such $1 billion may be reduced on a dollar-for-dollar basis for certain equity and/or debt raises (including the proceeds from the Offering discussed above) and certain unrestricted cash that is not segregated or otherwise earmarked for use as contemplated by the DoD Transaction Agreements.

We also received a loan from the DoD in the aggregate principal amount of $150 million (the “Samarium Project Loan”), pursuant to an unsecured promissory note (the “Promissory Note”) maturing 12 years after issuance. Interest will accrue on the Samarium Project Loan at a rate equal to the 10-year U.S. Treasury constant maturity rate plus 1.00% and will be payable in cash quarterly in arrears.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. Among other provisions, the OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the phase-out of the Section 45X Advanced Manufacturing Production Credit (the “45X Credit”) by 2034. We are currently evaluating the impact of the OBBBA on our business, results of operations and financial position, and the results of such evaluations will be reflected in our unaudited Condensed Consolidated Financial Statements in the third quarter of 2025, the period in which the OBBBA was enacted.

VREX Holdco Equity Method Investment Exit

During the second quarter 2025, after all required regulatory approvals were received, we sold our 49% interest in VREX Holdco Pte. Ltd. (“VREX Holdco”) back to VREX Holdco in exchange for a cash payment equal to our initial investment amount of $9.7 million. See Note 6, “Equity Method Investment,” in the notes to the unaudited Condensed Consolidated Financial Statements for additional information.

Cessation of Shipments to China and Stockpiling of Rare Earth Concentrate

In response to China’s retaliatory tariffs and export controls introduced in April 2025, we announced the strategic decision to cease shipments of rare earth concentrate to China. Historically, through our Materials segment, we sold the vast majority of our rare earth concentrate to a single, principal customer in China under the terms of the Shenghe Offtake Agreement. In July 2025, to align with the terms of the DoD Transaction Agreements and in further support of our domestic supply chain objectives, we ceased all further sales of our products to China and determined we would not exercise our right to extend the term of the Shenghe Offtake Agreement when it expires in January 2026.

We continue to produce concentrate, and to the extent not sold or further processed and sold as separated product, we will stockpile that concentrate for future use. In addition, we are prioritizing accelerating our downstream operations, as well as focusing on generating sales of separated products to customers.

The cessation of shipments had, at least in the short-term, a material negative impact on our business, operating results, financial performance and financial condition, cash flows and liquidity.

Factors Affecting Our Performance

We believe we are uniquely positioned to capitalize on the trends of electrification and supply chain security, particularly as domestic xEV production and domestic industrial supply chain initiatives grow. Our continued success depends to a significant extent on our ability to take advantage of the following opportunities and meet the challenges associated with them.

Demand for REE

The key demand drivers for REE are a diverse array of growing end markets, including electric mobility; physical AI; 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. 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. These include the trend toward electrification; implementation of physical AI; 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.

Furthermore, as mentioned in the“Recent Developments” section above, in April 2025, China imposed export controls, which included export restrictions on seven heavy REE and certain magnet materials containing heavy REE. The new restrictions require companies to secure special export licenses to export the specified REE and magnet materials containing heavy REE. This development has led to several market trends, which may or may not be permanent, including disruptions in supply chains, shortages of rare earth elements, potential price volatility, and an increased demand for alternative supply chains outside of China, all of which, if sustained, may have a material impact on the demand for our products.

Changes in technology could reduce the use of REE, including NdPr, in the components in which they are now used, or lead to a decline in reliance on such components altogether. Additionally, export controls and supply chain disruptions may also incentivize companies and governments to build alternative supply chains and create economic pressure to identify or create alternate technologies that ultimately could depress long-term demand for rare earth minerals and products, and at the same time may incentivize development of competing mining properties. 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. 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.

Maximizing Upstream (“Stage I”) and Midstream (“Stage II”) Production Efficiency

Following the implementation of our Stage I optimization plan, we have achieved at least 40,000 MTs of annual REO Production Volume since 2021. 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 and the first half of 2025. Our Stage I optimization plan has enabled us to achieve what we believe to be world-class production cost levels for rare earth concentrate.

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.

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. More specifically, we have reintroduced an oxidizing roasting circuit, reoriented portions of the plant process flow, increased product finishing capacity, improved wastewater management, and made other improvements to materials handling and storage. 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. Our upstream production achievements have provided economies of scale to lower production costs per MT of REO produced in concentrate. Furthermore, we designed our midstream 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. Additionally, our location and integration offer cost and transportation advantages that create meaningful efficiencies in production, security of incoming supplies and shipping of our final products.

During the second half of 2023, we began producing separated rare earth products. We continue to expect that it may take many quarters to achieve our designed throughput of separated products. As we increase production of separated products over time, we expect to reduce our per-unit production costs of NdPr oxide, which represents a majority of the value contained in our concentrate. Until such time, we may experience unstable operations and elevated costs of our initial production of separated products.

As part of our partnership with the DoD, we have committed to further expand our refining capacity to include the separation of samarium oxide and to expand and recommission the chlor-alkali facilities at Mountain Pass. Additionally, as part of our agreement with Apple, we will continue to develop and install scaled recycling capabilities at Mountain Pass.

We currently generate our revenue primarily from our Materials segment, which operates a single site in a single location, and any stoppage in activity, including for reasons outside of our control, could adversely impact our production, results of operations and cash flows.

Development of Our Downstream Manufacturing Capabilities (“Stage III”)

We are completing the installation of equipment at Independence and continue to develop engineering and manufacturing technology to process NdPr metal into magnets, while incorporating magnet recycling capabilities. These initiatives support our long-term plans to become a leading global source for rare earth magnets. We believe this vertical integration is a core competitive advantage in the production of a critical industrial output. We expect our downstream manufacturing efforts to continue to benefit from geopolitical developments, including initiatives to repatriate critical materials supply chains, such as through our agreements with the DoD and Apple described in the“Recent Developments” section above.

In December 2024, we commissioned our electrowinning capability to produce NdPr metal from NdPr oxide at Independence. Further, we introduced capabilities to produce neodymium-praseodymium-iron-boron alloy flake, a key precursor product that is utilized as the material feedstock for magnet manufacturing. In addition, we recently began trial production of automotive-grade, sintered NdFeB magnets at our new product introduction (“NPI”) facility within Independence. We began generating revenue from sales of magnetic precursor products in the first quarter of 2025. We expect to continue generating revenue from these sales ahead of commissioning of our magnet manufacturing capabilities at the Independence Facility, which are targeted to enter service at the end of 2025. As part of our partnership with the DoD, we committed to continue the expansion in capacity of the Independence Facility to a projected 3,000 MTs of magnets annually and to commence construction of the 10X Facility. Following commissioning of these capabilities and qualification of our finished magnets, we expect to generate revenue primarily from the sale of finished magnets.

While we have grown increasingly confident about our future outlook with the progress made to-date, there are inherent risks in finalizing construction and developing the process technology for magnet manufacturing. For instance, unforeseen delays in construction or the installation of specific equipment may occur, or our products may fail to satisfy customer expectations, which could adversely affect both the amount and timing of our revenue from permanent magnets and precursor products.

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. 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%. 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 our midstream operations, our expected mine life was approximately 29 years as of December 31, 2024. Over time, we expect to be able to continue to grow our expected mine life through additional exploratory drilling and improved processing capabilities, which may result in changes to various assumptions underlying our mineral reserve estimate.

Mining activities in the U.S. are heavily regulated, particularly in California. Regulatory changes may make it more challenging for us to access our reserves. In addition, new mineral deposits may be discovered elsewhere, which could make our operations less competitive.

Key Performance Indicators

In evaluating the performance of our Materials segment, we use the key performance indicators (“KPIs”) outlined below. Our calculations of these KPIs may differ from similar measures published by other companies in our industry or in other industries. See the“Materials Segment” section below for further discussion of year-over-year changes in KPIs. Since the Magnetics segment only recently commenced production, we have not established any KPIs for its operations.

REO Production Volume

We measure our REO-equivalent production volume for a given period in MTs, our principal unit of sale for our concentrate product. 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. 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. While our unit of production and sale is a MT of contained REO, the actual weight of our rare earth concentrate is significantly greater, as the concentrate also contains non-REO minerals, loss-on-ignition, and residual moisture from the production process. We target REO content of greater than 60% per dry MT of concentrate (referred to as “REO grade”). The elemental distribution of REO in our concentrate is relatively consistent over time and production lot. We consider this the natural distribution, as it reflects the distribution of elements contained, on average, in our ore.

REO Sales Volume

Our REO Sales Volume for a given period is calculated in MTs. 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. Our REO Sales Volume includes both traditional concentrate as well as roasted concentrate. Given our cessation of shipments of concentrate as discussed in the“Recent Developments” section above, we do not expect historical REO Sales Volume to be representative of future volumes.

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 is an important measure of the market price of our concentrate product.

NdPr Production Volume

We measure our NdPr Production Volume for a given period in MTs, our principal unit of sale for our NdPr separated products. NdPr Production Volume refers to the volume of finished and packaged NdPr oxide produced at Mountain Pass for a given period. NdPr Production Volume is a key indicator of the separating and finishing capacity and efficiency of our midstream operations.

NdPr Sales Volume

Our NdPr Sales Volume for a given period is calculated in MTs and on an NdPr oxide-equivalent basis (as further discussed below). A unit, or MT, is considered sold once the Materials segment recognizes revenue on its sale, whether sold as NdPr oxide or NdPr metal, as determined in accordance with GAAP. For these NdPr metal sales, the MTs sold and included in NdPr Sales Volume are calculated based on the volume of NdPr oxide used to produce such NdPr metal. We utilize an assumed material conversion ratio of 1.20, such that a sale of 100 MTs of NdPr metal would be included in this KPI as 120 MTs of NdPr oxide-equivalent. NdPr Sales Volume is a key measure of our ability to convert our production of separated NdPr products into revenue. In the future, NdPr Sales Volume for the Materials segment is expected to include sales made to the Magnetics segment.

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. 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.

NdPr Realized Price per KG

We calculate the NdPr Realized Price per 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. NdPr Realized Price per KG is an important measure of the market price of our NdPr products. In the future, NdPr Realized Price per KG for the Materials segment is expected to include sales made to the Magnetics segment.