MP Materials Corp. has recently released its 10-Q report, providing an in-depth look at the company's financial performance and operations. The company is the largest producer of rare earth materials in the Western Hemisphere and operates in two segments, Materials and Magnetics. The Materials segment includes the Mountain Pass Rare Earth Mine and Processing Facility, while the Magnetics segment focuses on downstream magnet manufacturing and related operations.
In the report, MP Materials discussed the recent completion of an underwritten public offering, resulting in net proceeds of approximately $724 million. The company intends to utilize these funds for the acceleration and expansion of operations, including the 10X Facility, as well as for strategic growth opportunities and general corporate purposes.
Furthermore, MP Materials entered into a long-term supply agreement with Apple Inc. for the development, manufacture, and supply of magnets from its Independence Facility. As part of this agreement, Apple made prepayments totaling $200 million for the purchase of magnets from MP Materials.
The company also established a public-private partnership with the U.S. Department of Defense to accelerate the build-out of a U.S. rare earth magnet supply chain. This involved agreements to build the 10X Magnet Manufacturing Facility and expand heavy rare earth elements refining capacity at the Mountain Pass facility. MP Materials agreed to use up to $600 million of its existing cash to fund these projects.
As part of the financing for these projects, MP Materials sold $400 million of newly created Series A Cumulative Perpetual Convertible Preferred Stock to the DoD. Additionally, the company issued a warrant to the DoD for up to 11,201,659 shares of its common stock.
The report also highlighted the enactment of the One Big Beautiful Bill Act, which includes provisions impacting the company, such as the phase-out of the Section 45X Advanced Manufacturing Production Credit by 2034. MP Materials is currently evaluating the impact of this legislation on its business, results of operations, and financial position.
Lastly, the report mentioned the cessation of shipments of rare earth concentrate to China in response to retaliatory tariffs and export controls. MP Materials ceased all further sales of its products to China and determined not to extend the term of the Shenghe Offtake Agreement.
Following these announcements, the company's shares moved 4.57%, and are now trading at a price of $74.32. For more information, read the company's full 10-Q submission here.
