MP Materials Corp. (MP) May 13, 2026 Conference Transcript

Everybody, welcome to the afternoon session of our 43rd annual Metals and Mining Conference. This next panel has become a bit of a mainstay at the conference, and I hope it continues to be that way. The interest has been fantastic, and to complement that interest, we have two fantastic guests. With us today, we have Ryan Castiou. He's Managing Director of Atomus Intelligence and a true expert in the space of rare earths and from MP Materials, a U.S. champion in rare earths. We have Ryan Corbett. He's Chief Financial Officer of the company. And then my colleague, Kate McCutcheon, is here to share the stage with me. How we're going to start things off is I'm going to invite everybody on stage. Ryan Castiou from Atomos Intelligence is going to start with an overview of the sector, supply and demand, pricing costs, all that sort of stuff. Then Ryan Corbett from MP Materials will give a bit of an overview of MP, but more specifically a view of the industry from a U.S. and MP perspective. And then the four of us will put our heads together and have a chat about the industry. So if you guys want to come on stage, Ryan Castiou, the podium is all yours.

Thank you, Lawson. Good afternoon, everybody. It's a pleasure to be here speaking with you today. Thank you to Lawson and the team for inviting me to participate in the Rare Earth panel once again this year. As a Canadian, it is always a pleasure to follow this conference from sunny destination to sunny destination. As mentioned, my name is Ryan Castew. I'm the founder and managing director of Atomos Intelligence. A global market research and advisory firm focused exclusively on the rare earth industry and home to the biggest rare earth only focused intelligence team globally by multiples. So I thought it would be helpful today to start off with a bit of an overview to the rare earth industry, a bit of 101 for anybody that has just tuned into the space recently, and then to provide a view of the current state of the market, how we see things evolving in the years ahead, and then lots of food for thought and hopefully discussion to follow thereafter. So can I jump ahead on this, Lawson, and perfect. So let's take ourselves back to chemistry 101 for a moment, and that periodic table of elements, on which the rare earth elements include the lanthanide series, plus scandium and yttrium. Scandium and yttrium are not lanthanides per se, but they are often categorized as rare earth elements because of their tendency to concentrate into many of the same minerals and mineral deposits. As you can see on the slide, rare earths are arbitrarily subcategorized as either light rare earth elements or oxides or heavy rare earth elements or oxides based on their electron configurations. And by virtue of being present in the Earth's crust in substantially higher concentrations, light rare earth elements tend to make up the vast majority of the rare earth content in a typical rare earth deposit, and thereby also make up the vast majority of total global output each year. Heavy rare earths, on the other hand, are present in the earth's crust in significantly lower concentrations and, as such, make up a much smaller

share of total global production.

Rare earth elements are used in hundreds of unique end uses and applications that collectively fall into one of eight end use categories. We have battery alloy. These catalysts, ceramics, pigments and glazes, glass polishing powders and additives, metallurgy and alloys, permanent magnets, phosphors, and other end uses and applications. As shown in the middle, by volume, permanent magnets and catalysts were collectively responsible for 70% of total global rare earth oxide demand last year. However, by value, permanent magnets alone were responsible for over 95% of the total value of all rare earths consumed globally. And this already large share is poised to expand even further in the years ahead as both demand for and prices of the so-called magnet rare earths. Which include, on the light side of the spectrum, neodymium and praceodymium, and on the heavy side, dysprosium and terbium, as both demand for and prices of those magnet rare earths continue to outperform. So when we're talking about rare earth permanent magnets and neodymium iron boron magnets specifically, it's important to recognize that there are over 80 different grades of neomagnets commercially available today. Each defined by their maximum energy product, or magnetic strength, which is increasing along the y-axis, and their intrinsic coercivity, or maximum working temperature, which increases along the x-axis. At the basis of all of these grades of magnets, neodymium and praceodymium, in their combined form, often referred to as didymium, Provide the base magnetic strength for all of these grades shown. However, as we move towards the right side of those two red lines, we often see small concentrations, minor concentrations of dysprosium and terbium, those heavy rare earths, added to the magnetic alloy to preserve the magnet strength at the elevated temperatures that it would see on the right side of that line. So to add a bit of color and context to this, I've overlaid this grade chart with some common end uses of neomagnets sitting atop grades that we may find in those particular applications. And I need to emphasize here that there are exceptions to every rule shown on the chart. There is no hard and fast determinant of what grade is used in what application. It's a function of what operating temperature, what demagnetization forces, and other conditions that that magnet will see in that application. The key takeaway here is that when we look at electric vehicles, robotics, electric vertical takeoff and landing, aircraft, which are part of the advanced air mobility package, and other fast-growing demand drivers, many of them straddle or sit to the right side of this red line. And what that means is that as the rare earth supply side continues to tune itself to support this demand growth going forward, we need not only the NDPR for the base magnetic strength of these magnets, we also need sufficient volumes of dysprosium and terbium to enable production of those specific grades for those applications. So you can think about the rare earth market much like a Swiss watch, where the various cogs need to move in perfect harmony, or they effectively jam up the works and bottleneck demand for other rare earth elements. So looking forward at demand for neomagnets, we expect it will more than triple by 2040, led by double digit demand growth for electric vehicles, for robotics, and advanced air mobility. And if you squint and look hard to the right side of the chart, this leads us to a future where by 2040, robotics surpass passenger EVs as the single largest demand driver for neomagnets. And in the decade to follow, if we were to model that out, will increasingly eclipse demand from all other end uses and applications as that fast growth captures market share. Thus, robotics is what we refer to as the new frontier of neomagnet demand over the medium to long term. And this is our robot deployment forecast that underpins the forecast shown on the previous slide. So from a market of around 10 million robot units deployed this year, we project the market will grow to around 65 million units annually by 2040. And at that time, we'll be primarily led by humanoid robots for commercial applications, humanoids for consumer applications, and other advanced robot types. Whereas today, the market is primarily driven by low-end consumer robotics like Roomba floor cleaners, window cleaners, and other similar robots. So this may look quite aggressive. It's quite a steep incline post-2030. But I assure you, this is a very grounded and conservative forecast relative to some of the other outlooks that have been put forward. Other leaders in the robotics space, Elon Musk, you may have heard of him, is projecting billions of humanoid robots to be on Earth by 2040. And others are speaking about tens of billions in the decade to follow, many entering space and doing exploration work in that realm. So should reality come somewhere in between this grounded conservative forecast and the very ambitious outlooks put forward by Elon and others, it would almost certainly ensure that robots do surpass EVs prior to 2040 and would absolutely eclipse and minimize demand from other end uses going forward as they increasingly capture market share. So the good news for Elon and for others that are looking ahead at this very aggressive demand growth for neomagnets is that outside of China, the magnet factories are coming. Today, there is approximately 45,000 tons of capacity operating globally outside of China, and we see another 70,000 tons potentially emerging by as early as 2030, taking into account the announcements and plans of magnet makers to date. This is a figure that month after month, quarter after quarter continues to increase, and I'm confident that next year, this time, This 120,000 tons or so by 2030 will be substantially higher. The reality, however, is that A lot of this magnet capacity faces challenges, faces bottlenecks that may inhibit it from coming to realization by 2030, if at all. And two of the major bottlenecks that we foresee in the near term, the first being we don't see sufficient supplies of the heavy rare earths, dysprosium and terbium coming to the market in the imminent near term to support this growth. Secondly, We foresee that metallization, the midstream, the conversion of those oxides into the metals and alloys needed to produce magnetic alloys that are then machined into the finished magnets. We don't see sufficient capacity coming online to metallize all of the oxides needed to support that magnet production capacity. So that is a second imminent bottleneck. The companies that will be best positioned to navigate these challenges are those that are vertically integrated, like MP Materials, companies that own the mine production of heavy rare earths and light rare earths, that have the metallization stage in the middle, and that own the downstream magnet factories to finish up the process. Conversely, companies that are simply aiming to build a magnet factory and to look upstream and to source metals and heavy rare earths from third parties, those will be the companies most exposed to these risks going forward. So that concludes the slides that I had prepared for today. I'm very happy to take any questions that you may have on this or on anything else related as we go forward. But thank you thus far for your time and attention.

Thank you, Ryan. Fantastic slides. Ryan Corbett, I'll have you jump in, and we'll address both of your comments together. Our numbers are close. They're not exact, but they're close.

So thanks so much for having me. Happy to be here again. The troop of Ryan Seas giving this presentation. So for those of you that don't know about MP Materials, I'll give a quick overview of what we make. Before I jump into that, I'll refer you to our SCC filings. I may make forward-looking statements, so I will have you look at those there. But this is our product suite. So MP Materials leverages Mountain Pass, which is one of the world's richest rare earth ore bodies in existence. We rebuilt that asset to be one of the world's largest global producers of rare earth content in the form of this high-grade concentrate that you see here. And since 2023, I've been ramping a world-class and world-scale refining facility to make NDPR oxide. Today, we're producing on a run rate basis approximately 4,000 tons a year of NDPR oxide and getting to our target nameplate capacity of 6,000 tons by the end of this year. To Ryan's earlier point, the strategy that we've employed here has been one of vertical integration from the outset. And I do think that certainly there is a lack of focus and understanding from a lot of market participants and observers of the steps in between. You don't go from an oxide to a magnet. You have to make high-quality NDPR metal. You need to be able to make alloy flake, and interestingly, some of the initiatives that we'll talk about in a moment in terms of our ability to bring down the utilization of heavy rare earth oxides within our magnets relies on high-quality production of NDFEV alloy flake. The microstructure present there and the compositions are sort of the other growth vector within magnet manufacturing that allows you to reach higher temperature, maximum operating temperatures, and higher performance with a lower mix of heavy rust within that finished magnet. For those that are a bit more familiar, I'll just do a quick rundown and an update on the status of MP materials we reported our first quarter earnings a couple of weeks ago. Last quarter, we delivered about 917 metric tons of NDPR oxide. Significant growth year-over-year and sequentially as we continue to ramp the Mountain Pass refining facility. We also achieved record upstream production for our first quarter for us as we continue to grow our upstream business as well. And given the change in market dynamics that have come into play since our July 2025 announcement of a public-private partnership with the Department of War, we've seen the NDPR market in particular as well as the remainder of the magnetic heavy rare earths and the other heavy rare earths change drastically from a pricing and supply-demand perspective, and that has flowed through to the financial performance of the business. As Ryan also mentioned, from a vertical integration perspective, we have been pursuing a downstream magnetics initiative since 2021. We're at a pretty pivotal and exciting time in the development of MP Materials' magnetic segment, where we've just commissioned the commercial equipment at our inaugural magnet facility in Fort Worth, Texas that we call Independence. That facility was initially targeted for 1,000 metric tons of ND FEV magnets. Primarily going to our foundational customer, which is General Motors. We have since announced an expansion of that facility to 3,000 tons of capacity with our anchor customer for that expansion being Apple. And on top of that, we have announced a new magnet facility that we refer to as 10X, as that facility combined with our expansion will take us ultimately to about 10,000 metric tons of magnet capacity. That facility, we just broke ground, is in North Lake, Texas, about 10 miles from our existing facility. The exciting thing about where we are in the magnet business right now is you saw the chart that Ryan put up there in terms of the demanding nature of the magnets that would go into an EV traction motor. So we're making one of the hardest types of magnets that you possibly can, and we are doing it with an incredibly quality-focused customer like GM in the automotive space, where we've had to build out the technical depth and know-how to make it through the production qualification process to get into automotive traction motors for EVs for GM. We are in the process of doing that right now. We have discussed that we expect to be generating revenue from Magnet products in the second half of this year. We are currently producing and selling NDPR metal out of that facility to GM as well, driving the current financial performance of that segment. I think the Concept that, you know, we're in violent agreement on with Ryan is that there are critical bottlenecks to enable the growth of this industry. Certainly, we see the same growth drivers that were just discussed, robotics, EVs, frankly, ice vehicle, you know, production, really anything that's in your pocket or that you drive or that flies has, you know, NDF, EV magnet content within it. I think the thing that we see is as all of this incremental Western magnet capacity gets announced, the scale of NDPR oxide production required to support these facilities is astronomical. And, you know, I'll kind of give a rough sense of where we shake out on this analysis. A lot of these numbers are pretty close to Ryan's and some of it, you know, we, with his permission, utilize some of his research with a bit of ours on top. But if you look at the current ex-China market. We're effectively in balance right now on supply and demand for scaled production of ex-China magnet manufacturers and ex-China NDPR capacity. The thing that I think is underappreciated is as we at MP move through our vertical integration strategy, we will become effectively nearly fully vertically integrated over time. And so our 6,000 tons of NDPR capacity will be used to feed our downstream initiative. The other only scaled producer of NDPR oxide in the world is Linus outside of China, and the vast, vast majority of their output was just spoken for in a deal that had some similarities to our deal with the U.S. Department of War, but with Japanese industry to support the Japanese magnet business. And so 7,200 tons of their NDPR capacity is dedicated to the Japanese market. So if you look at what that means, the announced capacity of Western magnetics players is such that the increase in NDPR capacity needed to support them is gigantic. Certainly, we see the same dynamic that Ryan described as it relates to heavy roofs, particularly in the short term. And some of the comments that we made on our earnings call, I think, got a little bit of attention on what our view of the ultimate key constraint being, given the fact that some of the very exciting growth cases and growing end-use cases of magnetics are in robotics, HDDs that go into the data centers that are powering, you know, The physical manifestation of AI that we're all talking about, you know, a lot of them do not require any heavy rare content. And so I think our point really is, if you look at the growth trajectory that you see here of magnet capacity. We expect that the NDPR required to feed that to grow in line, if not slightly above that trend line, whereas what we see from a heavy rare earth perspective is we have, as just MP, but the industry writ large, have made tremendous steps forward on thrifting of heavy rare earths within the high-performance magnets that were on that chart. And so as an example, the formulation that we expected to go into production with for EV traction motors for initial production, when we looked at that in about 2022, 2023, versus where we are actually going out and locking production today, we've reduced heavy wear of content in that formulation by 60%. And that's, you know, us starting from a greenfield. You know, I certainly believe that the head start that we have as a company in this space is a tremendous competitive advantage for us and a major component of the moat that we have, in addition to the fact that... Staring at this, there's a real capacity issue from an NDPR perspective, and that's one thing also, that being vertically integrated allows us to pursue our growth ambitions in a secured way. I think our view is, as you see buyers of magnets start to embrace the fact that they need to diversify their supply sources away from just China, which has 90-plus percent market share in the space today. Depending on Chinese NDPR to feed those facilities is not a business case. And so something's going to have to give here. I think the great thing about the strategy that we've employed is whether it's fewer, you know, magnet facilities end up getting built because they can't access this NDPR. It really speaks to the strategic value of our magnet business. And then on the flip side, of course, if you do see a supply reaction to feed this ultimate growth that we see in the magnetic space, that indicates, at least in our estimation, significant potential price growth in NDPR where we'd benefit on the upstream and midstream side of the business. And so we feel great about the way we're positioned. Obviously, a lot of execution ahead to bring all these initiatives into play. So that's MP in a nutshell.

That was really great. Great slides, too. It's the first time I've seen a few of those.

Well, we'll roll them out soon for everybody.

Yeah, so please take a seat. Where I'd like to start this conversation is with the pricing environment on NDPR in particular. So, after- Two years, three years of the Chinese price hugging that US $60 per kilogram level, the Chinese benchmark priced for NDPR astonishingly reacted to your Department of War agreement and within a very short period of months rose to $110 per kilogram, the minimum built into your agreement with the Department of War. What are the mechanisms that would have led to that reaction? And then what should we infer about the nature of the Chinese-based benchmark, given that reaction? Is that for me? I'll let you take it. You seem ready to go. But I'd like to hear from Ryan Castillo as well. Go ahead. Okay.

Look, I think the fundamental view from our perspective is I think it speaks to... Thank you. The mercantilist policies had been put in place, focused on this industry from the Chinese side for many, many decades, driving the price to a position where the view was you could not have scaled ex-China volume enter the market. When the incentive for the Chinese to flood the market effectively disappeared, particularly now that you have the two only scaled producers of this commodity with a price floor, you've seen pricing react in a way where I think it is getting much closer to a rational place. I don't think it's anywhere near the incentive price to drive the supply reaction that I think we will need, but it certainly speaks to, I think, the fragility of what the market price had been when sort of denominated by the Chinese producers.

Yeah, agreed. I think the only thing I would add is that April last year, China restricted exports of a handful of important rare earths, and at the same time, MP halted exports of concentrate to China, which were a very voluminous source of supply for China's processors. So I think in addition to the fundamentals catching up in China on the price side, they're also seeing tightness with respect to upstream supplies, and that is contributing to the price levels that we're at today as well.

So let's pick up on the incentive price comment. So as equity investors, when we think about $110 a kilo has been how we should think about projects. So two questions. Is $110 as good as it gets? Where do you see prices going to, Ryan? And then perhaps the second question is, where do you see that incentive price level?

Yeah, sure. I don't believe it's as good as it gets. Long term, medium to long term, our view is 150 per kilogram for NDPR is a price point that makes sense in terms of how we see demand evolving, elasticity to price evolving, and just supply demand fundamentals evolving. But we may have some ups and downs in between where we surpass that level, or maybe where we dip slightly below, but 150 is what we think makes sense.

I think from our perspective, with commodities, you never know. But I think the thing to really keep in mind is when you look at the potential projects that are slated to be developed. Most of the time, we sort of have an internal joke of, you know, you take the three, you go out to get three bids on an EPC contract to build a facility. Generally, you add those three up, and that's what it actually costs to build it. You know, timeline is maybe not 3x, but it certainly is longer than you think. And so from a capital intensity perspective, and a scale perspective of all of these individual potential projects, I think there needs to be a very significant price reaction to drive the sort of volume that I think this market will need over the long term. And so, you know, short and medium term, it's anyone's guess. But undoubtedly, I think, you know, up into the right is where prices need to go to support some of these projects coming online.

Ryan, as you alluded to, MP's CEO, Jim Latinsky, captured the attention of investors and the rare earth market on the Q126 call when he declared that he wouldn't be surprised to see prices of the two heavy rare earths, terbium and dysprosium, decline from here. Because, I mean, the convention of you is the only direction for those is up. So. What would cause prices of terbium and dysprosium here today to actually decline? And then what are the risks that they actually increase?

Sure. Look, I think from our perspective, zooming way out at a very high level, I think the view internally is if you look at the charts that we put up, if you trace what we expect magnet capacity to look like. NDPR will track that chart and that trend line either exactly or plus a bit, maybe 1.05 to that line. Heavies, on the other hand, we think will grow at a much, much slower rate given what we've seen from the technological innovation that we've been able to bring to bear, That we see the Chinese bringing to bear very aggressively within their market, and then also looking at the mix of use cases with robotics eventually being the largest driver, there's a significant portion of the robotics market that with today's technology, forget tomorrow's technology, does not require heavies within the magnet composition. And so you combine all of that, and I think our view is just that the demand curve is much less attractive in the magnet heavies, if you will. And on top of that... If you look at the structure of the market, in the same way that, you know, we think metal overall is somewhat underappreciated as a bottleneck in this space, you know, people talk about heavy rare earth ore bodies and, you know, sources of heavies, they forget that it's billions of dollars to build a refinery to actually turn those into usable products. And the interesting thing is you're seeing similarly to the concentration and benefits of scale that you see on the light rare earth side, I think the only two scaled Western separators of heavies at this point are going to be ourselves and Linus. And so from that perspective, I think we are in a place where a lot of upstream capacity is potentially available that is richer in heavy rare earths. I think the refining complex is relatively tight and very capital intensive. And so it puts everyone in a position where if you forecast out, you know, many, many years, you're looking at a price differential ex-China versus in China right now of nearly four times for dysprosium and terbium. When I am able to compete from a willingness to pay perspective with my heavy rare separation capacity online. That allows me to bid a different way for these feedstocks. And so ultimately, I think there will be real convergence. And so assuming the terbium is $4,000 forever, I think is not a great bet to make.

Yeah, that's very fair. But so Ryan Cassidy, in your presentation, I mean, you mentioned, I think, a fairly bullish comment on tervium dysprosium. I think that was more short term, but can you clarify?

Yeah, it is short term. So agree with Ryan. MP and Linus are likely to be the near term suppliers of heavies. But today, those supplies are just coming into their own. And it will be a seller's market. I think there's ample demand, given the magnet factory capacity that's coming online, that Ryan and Linus can set prices as they see fit, but completely agree that the 4,000 that we see today, that big differential, is going to compress, and that's very much part of our own forecast for DYTV. Yeah, not much else to add other than that. I think your answer was very solid.

So let's talk about demand for rare earth magnets, maybe Ryan C. So we like to think on the sell side that we're very good at forecasting demand. But in reality, those expectations for EVs and wind turbines probably disappointed. But yet today, we're still in a balanced market, as you pointed out. So what subsectors of demand have picked up the slack and surprise to the upside?

Yeah, great point. Off the top, I guess I'll acknowledge that all forecasts are wrong and some are useful. And that is where we aspire to exist all the time. There's a lot of decimal places that you have to predict to be absolutely right. Certainly, there's a variety of drivers of demand, as we saw on the chart that I showed. Basically, every avenue of demand that I plotted is continuing to grow. Whether that growth is double digit, whether it's GDP plus a couple points, growth is happening across the board. There are very few sectors today that use rare earth magnets where that demand is declining. I think consumer hard disk drives is one that comes to mind, but they're few and far between. I mean, the EV space is not performed as was perhaps projected or expected five years ago, but I think the devil is in the details on that. What is really not performed as expected was full battery electric vehicle sales and deployment, and we now see automakers refining their own strategies to incorporate more hybrids into that mix. What has picked up the slack there is largely plug-in hybrids, and soon will be extended range EVs, so-called EREVs. Looking at the market in China, EREVs over the past two to three years have been extremely popular. They were the fastest-growing subset of EVs, and in a typical EREV, it not only has the powerful motors needed to drive that vehicle forward, it also has a generator to convert power from a gasoline engine and charge the battery as it moves. It sounds archaic on the surface, but it's a very popular technology that addresses that range anxiety. And in China, with the popularity of those EVs, it ultimately became a net positive for neomagnet demand, given that an average EREV in China has a combined motor generator power, maybe two times that of an average battery electric vehicle. So when we look ahead at what is coming in the West, the EREVs are coming in full force. We continue to see major OEMs Announcing new models that will hit the roads in the next two or three years. So that is a net positive that is pulling up the slack. And another one quickly is that all types of vehicles, whether electrified, whether internal combustion engine, have a variety of micromotors and sensors and speakers throughout that also use neomagnets. And as we move over time, the number of micromotors, the number of electrified functions in a vehicle continues to expand. And that, too, is pulling up the slack where battery electric vehicles have somewhat disappointed.

One mental model for thinking about demand, and Ryan Castillo, I'm going to direct this to you first, but Ryan Corbett, of course, if you have any views, I'd love to hear it. But one mental model for thinking about demand is GDP growth level end uses, and then the really high growth stuff, and that's electric vehicles, it's air application, it's robotics and defense. I mean, today, where do you see that split? And then over the next five years, so just in the short term, where do you see that split going? And then how are those traditional sources of demand going to either contribute or take away from that? Do you see them being a net positive or net negative?

Yeah, great point. There are few demand drivers in the rarest space that track GDP on a one-to-one. Almost every growth, even industrial consumer electronics, is GDP plus. And in some cases, they're accelerating for a variety of reasons. Today, the market is approximately 40% legacy applications that are relatively price sensitive. In 2015, it was a split between 50-50. And as we look out to 2040, it is going to be approximately, I think it's 76% driven by those high growth end uses, robots, EVs, wind, energy efficient appliances, industrial applications, versus 24% that will be driven by price sensitive, ubiquitous applications. There's gadgets and electronics where the price of magnets makes up a significant portion of overall cost. So that leads us to a future where we see demand being less sensitive to price than it is today and than it was in the past, because that lion's share of demand in the future. We'll be within applications where there is a system level benefit that the rare earth magnets provide. So to add some color on that, if we consider an EV today that uses a permanent magnet motor, that is the most efficient motor available. Thus, it uses the least amount of battery capacity to do a unit of driving range. That allows an automaker to in turn thrift the size of their battery, which translates into a very material savings. And thereby, there is a lot of wiggle room for prices to go up before it would ever make sense to switch to a rare or free alternative. The same goes if we consider an HVAC system in a hotel, probably one of the biggest spends of the operation annually. Consider open-aired fridges and freezers in grocery stores, also a massive spend. So in those cases, they use permanent magnet motors to power compressors for HVAC, for fridge, freezer, and that induces a massive savings over a year of operating. And again, allows for a lot of price increase on the rareth side before it would ever make sense to switch to an alternative.

I think the systems level point is so important because I think you think about it from the perspective of, you know, huge growth vectors in the U.S. economy being, you know, the build out of data centers and AI and things like that. And so your point on HVAC is a critical one. If the binding constraint for the growth of that market is power, you have to focus on ways to reduce power consumption. And the way to do that is introduce, if you haven't already, permanent magnet motors within those various use cases. And so just all of these trends sort of converge in a way where, you know, these products are so critical to grow.

Folks, if there's anybody in the crowd that would like to ask a question, we do want to give you a chance to do that. Jack, I'm not sure if you saw the hand go up here, but there's... Question right here.

Thanks very much, Sean Malan from Vinick. Ryan, can we talk about just recycling? You've got the recycling magnet concept with Apple. Maybe can we also just talk about Swarthen? What's the sort of cycling process on that, please? Sure.

Yeah, one of the elements of this industry that further solidifies, I think, the criticality of vertical integration is the fact that from a material yield perspective, going from, you know, a magnet block to a finished magnet, oftentimes best case is you get 70% material yield. You have to slice, grind, and shape the magnet to its ultimate final shape, you know, to fit into a rotor. You lose a significant amount of the material in that process. That material that's from the cutting and slicing and grinding is called swore. And so that's a great example of, you know, what we'd call post-industrial potential recycling opportunities for us to bring back into the fold at Mountain Pass. The other example, of course, is with Apple as our foundational customer in that recycling business, end-of-life iPhones. Granted, in any individual iPhone, the magnet content is quite small. I think that's why it's actually a fairly attractive business, to your point on price elasticity. But at the end of the day, there are billions of devices. And so you combine that, and it can be a real driver of potential, you know, recycled feedstock. And so I think the thing that's so interesting to observe is in order to have a competitive magnet business, what you really need is an integrated ability to recycle your swarf and ultimately, you know, to be as competitive as possible, bring in end-of-life products into the fold. And so we are building out a dedicated recycling circuit at Mountain Pass. We think that that's a huge competitive advantage. And having that integrated with the scale that Mountain Pass brings to the table and sort of the baseload supply, if you will, of the virgin feedstock, it allows us to be able to accept such a wide range of potential feedstocks because any one piece of the puzzle within the scale of Mountain Pass is small enough that we have more degrees of freedom to be able to operate efficiently and recycle efficiently. And so certainly that is a big portion of the market in China. Most of that product right now that's post-industrial is consumed back into the production process, given they have not necessarily vertical integration within one company, but certainly within country. I think we really are the only ones that are bringing to bear vertical integration within one company and certainly within the United States to be able to achieve that.

So Ryan, can I sneak in a question here? So if you think about the ecosystem that's needed for the rare earth mining and the refining and the magnets, what are we missing in the West versus China, for example, which has had a big head start? Like, I know Linus is having issues with power, for example, at Kalgoorlie. So what's missing in the ecosystem and what?

You know, I think that at the end of the day, if you're looking at a purely Western supply chain, it starts with the ore body. You know, we've, you know, been in this industry for long enough that we've looked at, you know, most every opportunity out there. And at the end of the day, one of the biggest competitive advantages that we have is the scale and quality and mineralogy of the ore body at Mountain Pass, and then combined with the fact that we have co-located and optimized refining for that feedstock. In the Western world, there is nothing of similar quality or scale available, and what we need. is scaled incremental supply. And so certainly to your point on, you know, the Chinese may have larger scale, for example, in commodity chemical reagents for a large consumer of hydrochloric acid and caustic soda. Certainly, they are able to procure those materials cheaper than we are. We have ways to address that. You know, we certainly are able to compete from a cost perspective. But at the end of the day, if you don't have quality feedstock, it's all for naught.

Ryan, unless you had any further thoughts on that. Not really. No, I think Ryan hit the nail on the head with that. The bottlenecks that we foresee in the imminent near-term, I pointed out in my slides, heavy rare earth production, metallization, and that's at a holistic view for all of that capacity to be realized. Thank you. Beyond that, I think it's an important point Ryan made about the whole ecosystem that surrounds the industry to provide reagents, to provide acids and bases, is in its infancy, because the rare earth industry is also in its infancy outside of China. So that, I think, presents a massive opportunity for people to capitalize on the rare earth industry's growth outside of China by becoming suppliers of some of those key chemicals, reagents, etc. I think this is a good point to leave it on.

Gentlemen, thank you for being here. Everybody, thank you for your attention today. Thanks. Thank you.