MP Materials (MP) Morgan Stanley‘s 12th Annual Laguna Conference 2024 summary

Business overview and supply chain strategy

• Operations span rare earth mining, refining, and magnet production for electrified motion sectors.

• Transitioned from selling concentrate to China to building downstream capabilities in the U.S.

• Major contract secured with GM for magnet supply, with facility built in Fort Worth.

• Expect to sell metal by year-end and magnets by next year-end.

• Three of the five largest global automakers are now customers, reflecting increased OEM supply chain focus.

Market conditions and demand outlook

• NdPr prices have dropped 70% from 2022 peaks due to economic challenges in China and lower EV demand.

• 28% of NdPr demand is from e-mobility, while 70% is tied to Chinese manufacturing sectors.

• Hybrids are driving incremental demand, with recent strong growth reported by major automakers.

• Robotics and physical AI are expected to be major long-term demand drivers, with rare earth magnets critical for actuators.

• Chinese supply quotas have tightened, supporting a recent price rebound and positive medium- to long-term demand outlook.

Operational performance and expansion

• Stage I mining and concentrate production remains highly profitable, even at low commodity prices.

• Stage II refining ramping up, with recent production reaching 272 tons and targeting over 400 tons next quarter.

• Upstream 60K brownfield expansion aims to increase REO output from 40,000 to 60,000 tons over 3-4 years with $200 million in capital.

• Cost structure for refining is improving as scale increases, with focus on long-term enterprise value.