MP Materials Corp. (MP) November 11, 2026 Conference Transcript

All right. Good morning, everyone. Thanks for joining us for day two of our industrial conference. I'm Ben Calo. I cover sustainable energy and mobility. We're very happy to have Jim Latinski, who's the co-founder, CEO, and chairman of MP Materials. Jim, thank you for joining us at the conference. Thank you, Ben.

Always good to see you. It's great to be here for the big event. Yeah.

So, you know, since you guys come to the market public, a lot's changed, obviously. Yes. And I just want to start there. Maybe if you could just kind of give us, you know, the latest rundown of MP and, you know, where you are on your journey that, you know, you started out many, many years ago, but where you are today.

Sure. Well, we could spend the whole time talking about it. I'll do the quick version for the morning, but when we went public, many of you know I'm a former hedge fund manager myself. I bought the assets of Mountain Pass out of bankruptcy. When we took it public, we had turned around the initial stage of Mountain Pass, so this would have been 2020. We said, we're going to bring online the refining, and one day, maybe 2025 plus, we'll move into the magnetics business. I think people thought we were a little crazy then and didn't believe it, but here we are, fast forward, and as of, you know, this quarter, we've qualified magnets with GM and we're ramping up. We, over the last year since we've been public, we... We built out the refining business. We built out the magnetics business. We have a team of over 300 people in magnetics. I'm sure we'll get into it, but we have partnerships with the Department of War, GM, and Apple. So we've got GM online now. We'll be bringing Apple online next year. And so we've really restored the supply chain. We've brought it back to the United States of America, and it's been... The years have gone fast, but I think we've certainly accomplished a lot as a company, and frankly, I think a lot more than we conveyed to the street quicker than expectations were, for sure.

You know, maybe if you could start with a two-part question that just, you know, the importance of both rare earths as well as magnets, you know, from a domestic security standpoint. And then, you know, a lot of times when, you know, the upcoming meeting with the president and Xi is coming up, people start thinking that, you know, tensions will ease and then this will all go away. So I'd love to get your perspective on, you know, first, you know, an overview of why it's important, and second, you know, can we go back to normal? Yeah.

Well, the good news is I think almost everybody has heard of rare earths. When we started this and, you know, in the early years, there was a lot of education of what are rare earths, why are they important? Rare earths are, you know, special materials that ultimately make ultra-efficient, high-powered magnets that you need for pretty much any kind of motion use case. So obviously, historically, electric vehicles were the big ones, but think of consumer electronics, data center, disk drives in data centers, and then obviously the biggie would be robotics, drones, essentially the future of physical AI and ultimately national security and warfare, obviously a lot of national security use cases. But any time you see motion in modern-day life, you need rare earth magnets if there's sort of a high-power use case. Obviously, with the trade war early last year, this industry is predominantly in China, historically. We shut off access to GPUs. The Chinese shut off access to rare earth magnets. We were weeks away from what I believe would have been a full-on depression of our economy. You had seen headlines last summer. Ford had shut down plants. There were a number of defense and aerospace manufacturers in process of shutting down, and then ultimately there was a deal across sort of London, Geneva, and Busan that ultimately led to where we are today, which is, I would call an uneasy detente. The Chinese are allowing rare earth magnets to come out, but shipments to specifically U.S. and Japan, but really the world are down, and you need a license. And so for any use case, so if you're making an EV or a smartphone in general, they're coming out sporadically and okay, enough to feed your supply chain, not enough to stockpile, but licenses are generally available. If you're doing any kind of national security use case, anything in robotics of scale or military, what they call dual-use technologies, you're not getting a license. To get the license, you have to give up your IP. There's a detailed submission that's required by the Chinese government, and essentially, the Chinese are using this as a wedge issue from a supply chain standpoint to drive negotiations. And so as we look at APEC and G7 kind of coming up, very recently, they kicked the can in the most recent meeting between President Trump and Xi. They kicked the can to January. So we're at a critical point where the question is, will they continue to extend this, again, what I call uneasy detente or not? I would say, I strongly suspect they'll extend it, and it'll be the uneasy detente will continue. Although, if you asked me maybe 72 hours ago, I would have said that's a 98% chance. Given everything that's happening with NVIDIA, and what you're seeing remarkably is this is actually a bipartisan thing. There is anger in Congress about what has happened. I'm not expressing a view. I have no clue what happened there, but there is anger. And we don't know how far this thing goes. You know, were there billions of GPUs sort of illegally sold or what? And it has the potential of blowing up this issue as we head into the summits. And so it is not crazy to think that there'll be some kind of, you know, GPU rare earth freak out again. But, you know, that'll be or there'll be some deal. But even if in the best case scenario, so let's say that there is a deal and it's a continuation of the uneasy detente, we're talking about a continuation of the existing licensing regime. As an aside, certain other heavies that are critical, not for magnets, but for other uses we can talk about, those are not coming out of China. So in the supply chain, it is not a good situation writ large, even in the best-case scenario. And the importance of what we're doing, and obviously that's reflected in the deals that you've seen us do last year and this year. The importance of what we're doing continues to grow by the day, particularly with sort of the future of warfare and all the use cases. But it'll be interesting to see in the next few weeks how bad this scandal around NVIDIA gets. Does that derail relations? But I think for our purposes, however this shakes out, you know, we feel like what we're doing is really critical, and we're hearing that in the supply chain.

I want to go to the – you mentioned bipartisan, and, you know, with the election. I know on the conference call there were some questions around, you know, your – I would call it a landmark deal with the Department of War. Sure. First, could you just talk to us about why the Department of War selected MP materials for that deal? And then second, do you expect any changes or can there be any changes? I think it was a question on the conference call because of a Democrat-controlled House and Senate.

So our deal was start to finish through the Pentagon. It wasn't really driven by any of the other departments. It was sort of start to finish a national security deal. And the reason we were selected is because, and this was true then, it's true now, we are the only company in the world, the only single entity in the world, and that includes China, that can actually satisfy what the Pentagon wanted. Obviously, they wouldn't have gone to China, but the point is having the capability of mining, refining, metal making, magnet making, obviously we have recycling as well, but having all aspects vertically integrated of this supply chain in-house and having the ability to do all of it in the United States of America, we had already done it, and the Pentagon said to us, we want to 10x what you're doing as quickly as we possibly can. And we're the only entity that could satisfy that. So if they had opened up our deal to the entire world and said anyone can have this deal, we would have been the only company in the world that could have achieved it or actually qualified to do it. We have zero concern. I mean, obviously, you should never say zero, but we have. Almost no concern. We have a binding contract. We had bipartisan support when our deal was done. We had statements of support from the China Committee, from a number of Democrats on the Hill. We've worked through a number of administrations. We're a nonpartisan national security company. And frankly, one thing I think that's missed, I get this question obviously post the election a lot, but I think one thing that, again, irrespective of your politics, I think the Democrats are as strong, if not It's not stronger than the Republicans on the critical minerals issue. This is an issue that matters greatly for manufacturing and jobs. And there is clearly bipartisan concern about Chinese competition, China from a national security standpoint. And so, you know, it wouldn't surprise me if we actually see, you know, a dramatic heightening of spend and focus on our space in a good way. So if anything, it'll be the opposite. Now, the one thing I would say is I do think that there are going to be some investigations, some concern around a couple entities that were funded that maybe were questionable. I'll leave that to others to look into. So you'll see some headlines. You'll see some hearings and investigations. I think it's wholly unrelated to us. Our deal was fully driven out of the Pentagon. It's a binding contract, and we think this is a really good opportunity for us. Great.

If you guys have questions, you can email session3 at rwbaird.com or just raise your hand. Now, I want to dive into the business. I'm going to try to go from mine to separation to magnets. But just starting with the mine, maybe just give us an update, you know, where you guys are. I know you guys have operated better than the previous owners since you guys have owned it. By a landslide. By a landslide. By many more people. Well, we don't want to call it a landslide in a mine. Right. I guess that's a tough word to get to. But just, you know, we think of you, you know, I think, you know, for people that follow you, we often think of, you know, NDPR, primary product. So maybe talk to us about where you guys are on that. And I've heard you make comments at industry, the Toronto Industry Conference, just about how overlooked NDPR is as a focus on heavies. And so maybe you can touch on that a little bit.

So as far as our operation, I think we used to say this stat, but now that we've been public for over six years, it's kind of maybe less relevant, but we'll bring back some memories here. But I think if you look at our run rate REO production, at this point, it's probably if you took the best quarter annualized of the predecessor, I think we're over five times the amount of production than they ever did in their best quarter annualized, which, of course, they didn't sustain. We've brought online the refining capability. You know, we said this quarter, we're run rating basically there as a fully normalized refining. We're going to be bringing online a number of things next year. So we've got a lot of exciting projects, chloralkali, recycling for Apple. We can kind of talk about those. But from a mining and refining standpoint, you know, it's been remarkable. I think the market hopefully has been very pleased with how we've been able, you know, Michael, my co-founder and his team, how we've executed out there is extraordinary. And I think, you know, back when I bought this asset out of bankruptcy, I think they were talking about... You know, one day they wanted to get to 20,000 tons of REO, and they were fantasizing that, you know, they were saying to the market, if you give us a bunch of capital and blah, blah, blah, we'll get to 40,000 tons of REO. We're doing north of 50, and we're on our way to 60. So, I mean, it's just been a, you know, a remarkable story from that standpoint. To your question on NDPR, it's fascinating. I think if you go back over the last couple years. There was a narrative that bringing online magnets, that the bottleneck in the supply chain was around heavy rarests. I think you had, there's a couple companies out there that are trying to, you know, raise capital and finance themselves, and the criticism would always be, we need more heavies, and, you know, MPs not satisfying that, and so there was a narrative. What's interesting, if you look at what we've done in our magnetics business, we're now obviously qualified with GM. We have saleable magnets to GM. We have reduced the heavy content to hit the spec. Now, this is really important. A customer doesn't come to you and say, I want a magnet. It needs to have 1% heavies or it needs to have 3% heavies. They just say, I need this spec. It needs to be N45SH or it needs to be whatever the spec is. And you've got to hit that spec. And so the key to the business is to be on the cutting edge is to make sure that you have the IP to hit that spec with the lowest cost you possibly can. That's something that we've been at since my first hire in the magnetics business in February of 21. We have been focused on the IP landscape, on pushing the boundaries of IP, of making progress to hit specs at the lowest cost possible. And so what we said is that over the last couple of years, we've been able to hit the specs that we need for auto. EV traction motor magnets are kind of the hardest to do because when you look at the curve to get the strength and the thermal resistance that you need, if you can do an EV traction motor magnet, you can pretty much do anything. And we've reduced the heavy content by about 50%, 60% at this point versus where we were two years ago. And so, what's really interesting further is actually given the advancements that we've made, you know, we've said very clearly that when 10x comes online, we will be able to satisfy most use cases, you know, as we move further into robotics and drones and a lot of these sort of defense use cases, disk drives, you know, all these things that, you know, my expectation is, and we're seeing this today, and I'm sure we'll talk more about this. That it has gone from the theoretical but to the actual where we're seeing RFQs where we could fill 10x beyond our production capability with, given where our IP is at, with no heavies. So we really don't see heavies as a constraint. Further, what's so fascinating is that if you look at the general landscape. You look at the non-Chinese supply. So I think it's fair to say if you're a magnet manufacturer that doesn't have feedstock, it's kind of like a silly business. Like, I don't, you know, if you sit in front of an investor and say, I'm gonna make magnets in America, and I'm gonna get my feedstock from China, like, people are just gonna look at you like you're insane. Like, what's your purpose of existence? So you really have to have a solution because that's the point of developing this supply chain. And if you look at the NDPR production outside of China, there's two places. There's business plans. There's PowerPoint decks, but there's two places. There's Linus in Australia, which refines in Malaysia, and then there's MP, which mines and refines in California. Linus, effectively, all of their offtake is taken by Japan. So Japan has contracted the country of Japan, which will feed their main, the handful of magnet producers that feed, you know, all the Japanese companies in auto and robotics and industrial use cases. So that feed is spoken for. There may be like a little bit at the edges, but tiny stuff, nothing to feed a factory. And then there's us. And, you know, right now we are feeding and we expect to continue to feed some of the Japanese producers. But we've made clear as we move downstream that we can provide customers with a true vertically integrated solution. Because when we go to respond to an RFQ, we can say, from the dirt in California, every aspect of what we're going to send to you comes from the United States of America. Anybody now who's building a magnet factory or even building out a business cannot say that. And yet, as we look, and so, rough rule, we should put out, we've put out slides on this, but if you look at sort of the roughly 14,000 tons of NDPR in non-China, you know, that can satisfy somewhere around 28,000, 30,000 tons of magnet. Well, you've got that already with us and the Japanese, and then you've got somewhere in the order of 50,000, 60,000 tons coming online. There's some companies in the U.S. We'll see you next time. Their NDPR, by definition, must come from China. So I don't understand how that's a business. And then, you know, we talked about this, and we can kind of talk about the demand that is coming online for humanoid robotics. And so what you find is that before you even start thinking about heavies, and again, we'll be producing magnets for robotics without heavies. All of this magnet growth needs the NDPR, and so that is the true binding constraint in the industry. And so if you're bullish heavies prices, the price of NDPR has to go up by multiples relative to heavies for there to be an industry.

Just while you mentioned the robotics, I think you have a pretty good way of laying it out. Could you just maybe lay out just like the demand? I think I don't know if you use a million humanoids or 10 million.

Yeah. So the global NDFEB, that's a neomagnet market today, if you add all of Chinese supply, there's roughly 250,000 tons of magnets. The estimates are that a humanoid robot, and obviously it's still total open landscape, but the Chinese have made a lot of progress. They're ahead, and obviously you all read headlines about whether it's Jensen or Elon or whomever talking about it will be the biggest industry in the history of the world. The rough estimate, and there's a number of sources, and we obviously see this in our conversations, is roughly three to five kilos of magnet per humanoid. And sometimes you may see two, you may see six or seven, but just rough rule of thumb. If you do that math, what you find is somewhere in the order of 40 or 50 million robots a year would eat up 100% of global production, including China. And we know that there are, you know, all these other use cases growing, whether it's auto or consumer electronics, disk drives, etc. Other forms of autonomy like drones. So what you realize is actually magnetic production needs to grow dramatically. And obviously, China is going to feed its own industry. And China's made clear today, even in this detente period, that humanoid robotics are dual-use items, right? It's pretty hard to argue that a humanoid robot is not an item of war. I mean, we're seeing this, you know, play out in real time, you know, in Ukraine, in the Middle East. And so there's no question that if the United States of America is going to have a humanoid robotics industry, it's going to need a domestic supply chain. We can't expect the Chinese to feed that industry, even if they're willing to do it in the short term, as that scales into the millions. There's no way. And that's obvious. And so what we said on the call, which I just think is a fascinating stat. is if a manufacturer, and I want to say this carefully, if a manufacturer wanted to make a million humanoid robots a year... That alone would take up somewhere in the order of 40 to 70% of our 10x capacity online. And so what you realize, and we see multiple parties out there, and some names you would think, and some names that are enormous sort of tech-oriented companies that you might not necessarily be a first guess focused on this, I think what we find is MP has this We're in this unique position where we have the ability. Whoever does a deal with us will be years ahead of others from a production standpoint, because good luck getting the magnets to make a million robots from China. And so I think... You know, we can be a kingmaker from that standpoint. And so I think that from a strategic standpoint, I don't think the market gets that yet. And again, that has gone from theoretical to actual. We're seeing it in real time. RFQs around robotics writ large that exceed what we can produce at 10x. And so we've said also that, you know, 10x is contracted, right? We have 100% of the production We have the ability to then syndicate that at our choice as long as we're feeding American industry, and so we have the ability to be patient, to take our time, to make sure that we're focused on moving to very attractive, I would say extraordinarily attractive margin business in that facility, and so we'll be very patient about that, and obviously this is also an industry that's new. My guess is it's going to take longer. This isn't a 2026 or 2027 event, but over the next three to five years, I believe that that's going to be. I think the best analogy, Ben, is kind of we had the dot-com boom, you know, we had the internet, and then we had the crash, and then kind of coming out of that, the mobile revolution is really what enabled big tech today that we think of, right? The really big tech, the big tech landscape came out of all that, but was really accelerated by the mobile boom, and that played out over, call it, 10 years, you know, kind of boom, bust, boom, over 10 years. Things happen much faster today. So I think those timetables are just shrunk. And so I think that as we see, we're sort of at this cost of capital concern now. We're sort of a little past the peak of the boom. I think in AI, we're probably headed for a total revisit around what is ROI. And so if you kind of, and obviously these things are never perfect, but if you apply that analogy, I do think that physical AI will be like the mobile analogy. Where I think that as AI comes into the physical world, that is going to be the game-changing use case. My guess is the models will get commoditized. It's going to change all our lives. The consumer benefit from AI is going to be extraordinary. We all use this stuff today. Whether those business models make money or generate a return on the compute is still an open question. But there's no question as that technology moves into the physical world, In the, you know, humanoid robotics and all these things that are going to dramatically change our lives, that is going to be where the really high ROI, you know, game-changing companies, you know, names you might not even know exist yet, are going to be. And so we're, you know, at the forefront of that. I mean, we're seeing that unfold, and we're going to be a part of that. And so, again, I don't know how long that takes, but that's the position we have, given the platform that we've created.

Thank you. We have one from the audience, which it's, what if Tesla decided not to use permanent magnets? I think maybe like they did in at CyberCab, do you think this avoidance of rare earth magnets carries over to Optimus? So maybe just like a broad substitution, like a risk. Yeah.

Historically, you have always been able to substitute a different magnet in an EV. That has always been the case. The challenge with the substitution is that... Typically, it's much more expensive in terms of other materials. You lose efficiency. But there was always an economic level. If a magnet got to X, you could change the supply chain. You have a bigger motor. You have much more expense in copper and all these other things. But that was sort of simple math you could always do in that, to some extent, put a little bit of a governor. Although, permanent magnets have always had north of 90% share in EVs, and that has held consistent, given the benefits, because you historically have always seen announcements of moving over. I think, you know, there's been a couple like BMW did it twice and all these others. They always move back. I think if you, you know, I'm not going to discuss a specific manufacturer, but my guess is if you looked at any manufacturer that has moved away from permanent magnets or said that they have a product that's moving away, their rare earth magnet, Usage is actually way up versus when those statements were made, so I would I would I would Look closely at actions versus pronouncements on that front. That said, of course, there's always going to be, and that must happen in auto. My guess is market share could go down a little bit over the next decade when you have more simple use cases and technology advancements. What I would say in robotics... That is very difficult, and I don't think that that's going to be—impossible is the wrong word, but I think it's going to be very challenging because when it comes to robotics, torque density is what matters. You've got really small spaces. You know, you can't—in an EV, you can put a magnet triple the size of another magnet, and it's—you know, you don't see it. It's inside a car. But if you have a robot that needs an elbow that's, you know, the size of that screen, that's a problem. I'm being a little dramatic, but you get the point. And then when you think about dozens of actuators throughout the robot, maybe there's a couple spots in the hip that you can do it. But the idea that you're going to have hands doing ultra-complex things and all aspects of it, there's really been no discussion of that. And so I think that... Frankly, the supply chain probably needs a little subbing elsewhere, and I think that will happen because my expectation is that what will happen is some of these use cases that pricing is going to go materially higher to feed the robotic supply chain. So you may see some substitution in auto and some of these other areas because they just literally won't be able to afford it. But I think we're way off from that kind of consideration. And I really, I would highly recommend that people look at actions rather than words in that case, because I think there's sort of a lot of pronouncements and niche products. But then in reality, it's been a pretty consistent thing of north of 90% share in earth magnetics in auto.

This is an unfair question because you have your hands full and you have a lot of execution ahead of you, but with everything you've outlined, do you think that 10,000 metric tons is the right number for you guys? And then if it is, then from an outsider's perspective, you are happy sitting still, and you want to keep doing things. And so what else are you thinking about as it pertains to MP?

Well, we're an ambitious company. I think if you look at where we said we'd be five years ago today, we're way, way beyond. I mean, as I said earlier, it's extraordinary to see what we've done. We pinch ourselves all the time. I think in magnetics, obviously, if you think of anything I've said earlier, our business will ultimately be multiples the size. We believe we're going to be one of the handful of champions and the leader in the world in rare magnetics, period, full stop. That said, given the history of, frankly, any industrial build-out, given my high focus on risk management, and given how we've built the business and what's core to our culture, we have always managed risk as we've grown. If you look at from history, we've been able to do this with contracted cash flows. We've been able to basically have cap our downside or really have no downside, have profit as our downside and have enormous upside as a business. We did that when we built out our magnetics business originally with a contract from GM that you can effectively think of as functionally cost plus. So we were able to be in that business with protection. As we look at our Apple deal, what's publicly stated is that we were working with them for five years as the foundational customer of our recycling business. And they've agreed to not only be the foundational customer of that, but purchase a minimum of $500 million of magnets out of our independence facility. And then obviously you look at our Department of War deal as we're building out 10X. And so the MO of our business is we don't need to speculate. We can do this methodically. We can hit base hits. Base hits compound. And so That's how we've built the business. So I think we're headed into this landscape where I think if we were more speculative, we'd be like, let's go out and build 50x. We don't need to do that. We need to execute in the short term, which we're doing. And then, frankly, I think given what you've heard me say about all the other things we see in the industry and NDPR as a binding constraint, I do think we're headed into a period now, especially with concerns around cost of capital, where we're going to get to clean up some of the rest of this mess. I do think that there's going to be an opportunity to buy some other assets at 10 cents on the dollar. We like that. That's always fun for us to get to have better capital allocation opportunities. And so we'll do that thoughtfully. And there's no question, I think, if we look out five years from now. Will the magnetics piece of our business be materially larger? Yes. Is it possible we'll have moved downstream into something? That's certainly possible. Again, I think in the short term, it feels two steps forward, one step back, and then you look back at what can happen over five years, and it's extraordinary. But that's how we think about it, and I think that just given everything that I've laid out, the opportunity for us is exciting, and we just have to... Not look too far ahead. I think the mistake would be to look so far ahead that we take our eye off the ball of what we need to execute in the short term. And in the short term, we need to continue ramping independence, get 10x done right with the Pentagon, and then see kind of where the cards fall. Great. Thank you, Joe. Thanks. Appreciate it. Yeah. Thank you.