MP Materials at BofA Conference: Securing Rare Earth Supply

On Monday, 23 June 2025, MP Materials (NYSE:MP) participated in the BofA Securities 2025 Commodities Conference. The company highlighted its strategic efforts to build a robust Western supply chain for rare earth materials amid growing geopolitical tensions. While emphasizing progress in light rare earths, MP Materials acknowledged challenges posed by China’s market dominance and export controls.

Key Takeaways

• MP Materials is investing heavily in a vertically integrated supply chain to reduce reliance on Chinese rare earths.
• The company plans to expand its NDPR oxide and magnet production capabilities.
• Collaboration with Maaden in Saudi Arabia is being explored to build a refining hub.
• Government support is seen as crucial in countering China’s market influence.
• MP Materials is positioned to be cost-competitive with Chinese producers through vertical integration and recycling.

Financial Results

MP Materials has invested nearly $1 billion in its supply chain since February 2020. The company currently has the capacity to produce 6,000 tons of NDPR oxide, which can be converted into 12,000 tons of magnets. At its Independence facility in Texas, MP Materials can produce 1,000 tons of finished magnets. The company aims to improve its cost position from $60 to a level competitive with Chinese producers.

Operational Updates

MP Materials is working towards a fully integrated supply chain, encompassing mining, processing, and recycling. The company is equipped to manage recycling in a closed-loop system, addressing material loss during magnet manufacturing. A potential collaboration with Maaden in Saudi Arabia is under consideration to establish a scaled refining operation.

Future Outlook

The company anticipates a double-digit compound annual growth rate for magnets, driven by demand in electric vehicles and other sectors. MP Materials is collaborating with customers and the government to scale magnet production, with expectations of continued government support through initiatives like Section 232. Expansion opportunities in the midstream and downstream businesses are also being explored.

Q&A Highlights

Ryan Corbett, CFO of MP Materials, emphasized the need for national champions to counter China’s dominance in the rare earth market. He noted that China’s export controls have prompted OEMs to reassess their reliance on Chinese magnets. The company aims to be cost-competitive with Chinese producers through its integrated supply chain and recycling efforts.

For a complete understanding of the conference call, please refer to the full transcript provided below.

Full transcript - BofA Securities 2025 Commodities Conference:

Operator: Ladies and gentlemen, the program is about to begin. Reminder that you can submit questions at any time via the ask questions tab on the webcast page. At this time, it is my pleasure to turn the program over to your host, Michael Widmer. Please go ahead.

Michael Widmer, Methods Research, Bank of America: Thank you very much, and, good morning, good afternoon, everyone. Again, again, I’m Michael Widmer. I run the, the methods research at, Bank of America. This is going to be a very compressed, high intense session, actually. We have got twenty five, thirty minutes to talk NP Materials and the raw material the rare earth.

With me today, I’ve got, Ryan Corbett, who is the chief financial officer at NP Materials. Now let’s actually jump right in. We had a brief chat before about how the market got from not knowing the rare earth elements, rare earth materials, a few months ago to, being an expert, at the moment. But I thought it would be still wise to maybe set the scene. A lot of talk at the moment about light rare earth, heavy rare earth, and then also the magnets.

So, Ryan, what are those?

Ryan Corbett, Chief Financial Officer, NP Materials: Yeah. Michael, thanks for having me, and thanks to the Bank of America team. Happy to be here today. Certainly easy to do it virtually, so a pleasure to be here. I think certainly over the last several months and particularly since the April, there’s been an unbelievable sort of crash course by the market.

And you know, what are rare earths mostly because the importance of both the rare earth commodity products and most importantly, the finished products, finished engineered products, the rare earth permanent madness that they go into have become so topical given the geopolitical situation between The US and China in particular, and the export controls that the Chinese have put on these critical products. And so, it’s important to think about permanent magnets as effectively one of the most important critical enablers of the modern economy. I think the Chinese tend to refer to them as industrial vitamins, and they are what are needed to convert stored energy into motion in most use cases. And so there’s a lot of focus on their use in electric vehicle traction motors, but we can’t forget. And one of the reasons that these became so topical is put traction motors aside, put electric vehicles aside.

Think about the number of parts of a vehicle that move. Power seats, power steering, power windows, all of those actuators and motors tend to have berth permanent magnets in them because they are the best technology from a weight and power perspective. And so, to your point, Michael, there is a lot of focus on trying to understand what are light births, what are their importance, what are heavy births, why do those seem pretty important right now? And to kind of set the scene, what we really care about at the end of the day is an ability for The United States and the Western world to have a secure supply of permanent magnets for industrial applications, for energy applications, you name it, for defense applications, drones, robots are becoming much more important users of permanent magnets. The vast majority of the content of a permanent magnet is NDPR, neodymium, prasidymium, which is by far the largest product that we produce at empty materials.

There are small amounts of heavy rivers that are added to certain magnets to maintain their performance at higher temperatures. These are the heavy earth elements, namely dysphrosium and terbium. We also produce those at MP Materials and will be in production of refined heavy earths next year. But importantly, what matters is how do you get to the finished product to enable data centers, drones, robots, cars, etcetera. I think the focus being oftentimes in sort of the market commentary on the heavy rare earth portion of the suite of 17 rare earth elements right now is because those were the ones that were used as sort of the way for the Chinese to put export restrictions on magnets.

At the end of the day, the lights and the heavies are equally important. I think The United States and the Western world have made more progress on the light berths given the vast majority of the raw materials in a permanent magnet are the light berths and DPR. And frankly, from our perspective, we as a company and the industry writ large have made a tremendous amount of progress in lowering the heavy berth content for a given magnet use case. And I think that that will continue over time. Really the potential substitutions or other technologies for magnets that use less light berths have not proven to be particularly effective.

And so at the end of the day, they’re all important. I think we will play a role in critical enabling technologies, recycling, etcetera, that will allow us to drive more supply of these in the Western world. But that’s sort of an attempt to set the scene of a very complex state of affairs right now.

Michael Widmer, Methods Research, Bank of America: So you’re focusing, as you mentioned right now, a little bit also more on the on the heavy rare earth side. But from all of your commentary, is it possible to say that which of those sectors, the light, the heavies, or the magnet, which one could see the strongest growth going forward, or are they growing all the same pace?

Ryan Corbett, Chief Financial Officer, NP Materials: Well, I think they’re all interlinked. I actually think, despite all the focus on the heavies, the heavies will probably grow the slowest because what you’ll see is the vast majority of the use case of NBPR is in permanent magnets. In permanent magnets, you can pick your third party research, almost everybody has them at a double digit CAGR, which makes perfect sense given their end use applications. And so let’s take that for what it is. There are various applications within that 10% plus CAGR that are growing very rapidly that either require fewer heavy burners at baseline because they’re not operating at super high temperatures, or if they do require heavies, the focus of R and D has been on lowering the units of heavies per unit of magnet, for example.

And so I think you’ll see NDPR and magnets grow in lockstep at double digit CAGRs. I think heavies will grow slightly slower, not to say they’re less important, that’s just the reality of the market.

Michael Widmer, Methods Research, Bank of America: Okay. And when we look at, kind of the last few weeks, China did put a temporary hold, to its experts. How do you think that impacted the market? And, also, like, was there any read through to empty materials, which I think there was, but I just thought I’d ask the questions on that.

Ryan Corbett, Chief Financial Officer, NP Materials: Sure. Yeah. No, it’s a great question. And look, I think, you know, it’s fascinating to see how this export control mechanism was implemented. If you think about how the magnet market has developed over the last twenty plus years as the Chinese have gained increasing dominance and have continued to support their industry with a focused industrial policy and subsidy regime, what customers have been able to do is, they can get whatever magnets they want at a very low price, given the subsidized environment.

So it’s one of those scenarios where if it’s easily accessible and there’s no real meaningful economic or sourcing impact for getting higher and higher and higher specifications, why not put the highest spec magnet into your application? And so what you’re seeing is with the Chinese basically taking what could have been a pretty narrow interpretation of heavy worth export controls, but applying them to magnets. And then looking at the fact that every customer really had no issue of that, to be able to put a few heavies in there because it lets us not really test how things go at 120 degrees C, 150 degrees C. It made everyone realize how over specked their magnets were and how reliant they were on this magnet regime dominated by the Chinese. And so the implication for us as a company and certainly us as an industry in a country is a real wake up call to industry as to how they were lulled into the sense of security from this focused industrial policy over the last several decades, and just how vulnerable we really are as a society to the ability for the Chinese to just turn the spigot off.

I mean, if you think about what they could have done, they could have said, oh, we’re just gonna restrict heavy birds themselves. That would have impacted Japanese magnet makers, US magnet makers perhaps that are fledgling, European magnet makers. And it might not have really made the industry think about how important the magnets themselves are, but instead putting those export controls on the magnets, every major OEM, whether it’s automotive, industrial, defense, aerospace is sitting here saying, I’ve got three weeks of inventory left for a piece of my supply chain that I never thought twice about. And now I’m recognizing I might not be able to get that over the next six weeks, the next six months. And then what happens if the geopolitical situation devolves further?

It really is what we at MV Materials have been saying for the last seven to eight years of, again, this is not an anti China thing. It’s any country with the level of dominance in a critical enabler of the modern economy with such scale and dominance, it’s untenable. It could be, you name the country and it still wouldn’t work. It just so happens to be one of our most critical geopolitical potential adversaries right now, as we look at this trade war dynamic. But that is hugely supportive of what we are doing at NP Materials.

And we talked on our last earnings call about the fact that, and we sort of joke internally, like, I don’t think anyone in this company has worked as hard as this, except for maybe like cramming for exams in college It is absolutely nonstop. And it’s, I mean, it’s a great opportunity for us, but it really gives you a sense for how behind the eight ball so many western, you know, European, American, Asian manufacturers were just relying on this single point of failure in the supply chain.

Michael Widmer, Methods Research, Bank of America: So the question here, looking at the China’s dominance at the moment, can we actually reduce the dominance? And one question, actually, if I may, we were always talk there was always talk about how cost efficient the Chinese can operate in some of those materials. What’s the CapEx and OpEx environment for you in The US actually?

Ryan Corbett, Chief Financial Officer, NP Materials: Sure. No. It’s a great question. And and I think the important thing is to understand not all rare earth assets, certainly mineral deposits and reserves are created equal. We are fundamentally in a great position because we have mountain pass, which is sort of a freak of nature from a mineralogical perspective.

What is needed to break the Chinese dominance in this space is a viable, dominant set of national champions that can benefit from the positive flywheel that the Chinese have, but do it in a way that is within the framework of the Western free market economy. And so I think that MP Materials is really at the forefront of that in leading that charge as a national champion in the space. And it’s why we have been so aggressively investing in our vertical integration strategy for the last several years. We started to see this flywheel start to turn in a positive direction in 2021. You know, we took the company public in 2020 with a mission to go from producing a more of concentrate where we actually believe, you know, to your point on cost competitiveness, we think we are the lowest cost producer of mixed earth concentrate in the world, including the Chinese, depending on how maybe Boutou allocates their costs between iron ore and rare earths, maybe they’re a close second or maybe we’re a close second.

But regardless, where we sit on the cost curve is tier one without a doubt. And so we’ve been able to leverage that. And the goal when we went public is leverage that into building out our refining capability at scale where we have a lot of benefits and competitive advantages versus the Chinese and a lot of disadvantages. At the end of the day, we do believe that they all will come out in the wash where we will continue from a vertically integrated perspective through to separated or hot sides, be competitive with the best Chinese producers. And we’ve seen, you know, if you just look at, you know, public Chinese producers out there and they’re reporting, you know, at 40, you know, mid forties NDPR prices, none of them are making money.

That tells you where the cost curve sits. And, you know, we spoke on our last earnings call about our view of getting from sort of the sixties where we sit today, given our underutilization of our asset as we ramp into a very similar cost position. And so we feel good about that. What is important to actually be able to produce scaled magnets is that full vertical integration, which frankly, you don’t even really see completely in Chinese industry, you know, because there’ll be 20% ownership here and 60% ownership there. But what we are building is full soup to nuts from the mining all the way through to the engineered finished product, and then tacking on the recycling piece of that where, for example, anyone setting up a magnet manufacturing capability, you know, in outside of China needs to contend with the fact that going from a magnet block to a finished magnet that’s going to go into a traction motor, you may lose 30 to 40% of your material from cutting, slicing and grinding of that magnet to a final shape.

You have to do something with that. And Mountain Pass is positioned as the scale leader in being able to take that type of material, what’s called swarf and bring it back into the front end of the process and turned back into a usable product in sort of a closed loop. And so there’s a lot of discussion about recycling, end of life recycling and things like that. But fundamentally, you have to have that vertical integration to be able to be cost competitive with the industrial act that the Chinese have created.

Michael Widmer, Methods Research, Bank of America: So let I think let’s let’s actually just stick with that vertically integrated. Came up a few times now. I think you have got this agreement with Martin as well where you’re looking to build a fully integrated supply chain as well. Could you talk a little bit about that agreement? Because that would actually, I think, not really focused be focused on US.

Ryan Corbett, Chief Financial Officer, NP Materials: Sure, no, it’s interesting. We tend to be a company that does not announce MOUs. We’re sort of allergic to doing that just because you’re probably well aware of the space we operate in that’s riddled with MOU press releases that don’t mean much. We tend to execute first and then announce it later. But we thought that this was such a critically important acknowledgment of how The United States and its allies globally can work together to continue to diversify the supply chain.

What we see as a pretty significant opportunity over time for MP Materials, and again, we’ve got such an amazing set of investment opportunities in The United States right now. This is one where certainly, Monin will be a big contributor here and we can provide our technical expertise to them and work together with them. But it’s to be able to create a counterweight to everything I just talked about in terms of the way the Chinese dominate. You know, for example, the refining capacity in the Chinese market is significantly greater than their upstream mining market share. They import a significant amount of raw materials.

And what they’ve been able to do is set up an industry structure where they are the refiner of choice for projects in Africa, projects in South America, projects elsewhere in the world that can’t support the cost of building out a full refinery, but can get to some sort of mixed unrefined product and then need an outlet to sell it. What we are doing ourselves at Mountain Pass is our heavy burrow separation capability is set to take third party feedstock to be able to play a role there. But then with this modern understanding is looking at the opportunity to build out a very scaled, refiner to the world. Certainly, you know, you think about Saudi Arabia, they have plenty of expertise in, you know, oil and gas refining, large scale industrial manufacturing, and, you know, the ability to be able to bring to bear a refining, framework where what matters is access to commodity chemicals, excellent in the kingdom, cost of power, cost of construction, skilled workforce, those sorts of things where they have a lot of advantages that would allow us to work together to build something very meaningful. And so more to come there over time, but it’s an example of the way that I believe, to my point earlier on needing to build scaled national champions, we’re very pleased that this is a real validation from a very skilled operator in this space like Maden as to MPs position as a player that now has built out capabilities across the suite of necessary capabilities, upstream, midstream, downstream, including magnets.

And so something that we’re excited about over time.

Michael Widmer, Methods Research, Bank of America: And so when you look at it in retrospect, how much have you invested so far already? What are you planning to invest? There is a production volume right now. And where would you like to take that going forward?

Ryan Corbett, Chief Financial Officer, NP Materials: Yeah. So to to give some context here, you know, we took the company public in 02/2020. And since then, we’ve invested nearly a billion dollars of private capital into this supply chain across upstream, midstream and downstream in The United States. That’s more than probably adding up anybody else in this space and putting a factor on it. That is because we do have such a tremendous asset in Mountain Pass that is so fortunately placed on the cost curve to enable us to generate cash flow, to reinvest downstream, which we have done.

And I think it’s brought us to a point where, aside from what has happened starting in April, we as a company were somewhat at a place where we were looking at being an almost in harvest mode from all of this exceptional investment we’ve made. The world has changed slightly since these export controls have been put in place. I think customers have really come to recognize that this capability needs to exist now, not in five or ten years. And so, we are certainly working on opportunities to heed that call. Today, we’ve set up a business that will produce about 6,000 tons of NDPR oxide in our midstream business, which rough rule of thumb, you double that number to get to the quantity of finished magnets you could make with that NDPR.

So that’s enough to make, let’s call it 12,000 tons of magnets over time. Our Independence facility in Texas is initially equipped to produce 1,000 tons of finished magnet. So it gives you a sense of the ability for us to continue to grow our business at what we see particularly now in this market environment, attractive returns on capital. And so, we are working with a wide variety of end customers and other stakeholders, including government on what is the most thoughtful way to get from A to B. And I think the important thing for us is seeing a real pull from industry and government to create the, you know, heft and scale that’s required to have a vibrant downstream market.

There is a world where we were a big midstream producer and had a nice sort of attractive small downstream business attached to it. I think the world has changed in the sense that I think there is much more focus on getting the end product in country for country. And so, we’ll see where that takes us. But regardless of how this shakes out, we’re extremely well positioned to be able to grow the business over time. And we’ll just follow the market and be thoughtful.

Michael Widmer, Methods Research, Bank of America: And you just mentioned government as well. Think let me ask you actually one question there because President Trump kick started a section two thirty two on process critical raw materials and products. What’s your views on that initiative?

Ryan Corbett, Chief Financial Officer, NP Materials: Sure. You know, it’s interesting. There was, you know, an early investigation in in into, you know, the national security implications of earth permanent magnets in the first Trump administration. And certainly we provided our views and comments there. And in the first Trump administration, we were so much earlier in our maturity.

It’s amazing actually to think about how much has happened through that period of time. But our view was undoubtedly these are critical for national security, but putting a tariff on magnets before there is any domestic production of magnets is just a tax. It’s not really changing things. What you’ve seen is going from Trump one point zero into the Biden administration, there was another reevaluation of these. Mind you, first Trump administration, their finding was absolutely a national security implication, absolutely dumping going on, but not sure that tariffs are the right answer right now.

We agreed with that assessment at the time. Biden undertook another review of this, particularly in the context of the threat posed by Chinese electric vehicles and what that would do to our automotive industry. When a 100% tariffs were put on under the Biden administration onto Chinese electric vehicles, a 25% tariff was put on specifically onto berth permanent magnets. That is at a time when a 25% tariff was viewed as like huge. These days, you know, 25% tariff is sort of, you know, nothing.

Now we’ve got two thirty two investigation into understanding, let’s understand full soup to nuts, the raw materials, finished products. And at the end of the day, The United States now has a capability. The United States is scaling that capability. MP is leading that effort. And undoubtedly, there are, you know, artificial subsidies and market structures in place in China that allow them to exert the influence that they have.

And so certainly we think it’s an important tool in the toolbox for the administration. I think it’s one tool of many. We’re hopeful that, as we’ve heard so far, there’s been a desire to approach this from a whole of government perspective. We hope and expect that that remains the case. And I think this will be one of many levers that the government can and should pull.

And it’s not just our government. I think all Western governments need to be looking at these issues to be able to foster a critical capability in the Western world where, you know, the pure economics of it make it very challenging without combating, you know, the mercantilist approach that the Chinese have taken.

Michael Widmer, Methods Research, Bank of America: Interesting message. Thank you. Thank you very much. Look. I promised you it’s gonna be, intense and short.

That’s what it was. I promised also to keep it to twenty five minutes. We are now at twenty six. So let me say thank you very much, taking the time today. It was very interesting, chatting.

And, yeah, wish you all the best.

Ryan Corbett, Chief Financial Officer, NP Materials: Absolutely. Thanks, Michael. Appreciate the time.

Michael Widmer, Methods Research, Bank of America: Thank you.

Ryan Corbett, Chief Financial Officer, NP Materials: Great.

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