BofA Securities Global Metals, Mining and Steel Conference Ryan Corbett, Chief Financial Officer May 14, 2025 Safe Harbor MP Materials Overview This presentation contains certain statements that are not historical facts and are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of the words such as "estimate," "plan," "shall," "may," "project," "forecast," "int ...

Group 1 - Tesla leads the gains among component stocks with an increase of 8.23% [1] - Li Auto (Hong Kong stock) rose by 5.49% [1] - Xpeng Motors (Hong Kong stock) increased by 2.62%, ranking third in performance [1] - Yabao saw a rise of 2.05% [1] - Geely Automobile Holdings (Hong Kong stock) increased by 1.85% [1] - Yadea Group (Hong Kong stock) rose by 1.49% [1] - Zhejiang Leapmotor Technology (Hong Kong stock) increased by 1.21%, ranking seventh [1] Group 2 - Lucid Group experienced a decline of 1.37%, ranking fourth from the bottom [1] - Proterra saw a drop of 1.80% [1] - MP Materials decreased by 3.13% [1] - Umicore (European stock) fell by 3.23% [1]

Group 1 - MP Materials Corp. participated in the BofA Securities 2025 Commodities Conference, highlighting its focus on rare earth materials [1][2] - The session was led by Michael Widmer, who emphasized the growing expertise in the rare earth market over recent months [2][3] - Ryan Corbett, CFO of MP Materials, discussed the significant market changes and the increasing importance of rare earth commodities and their applications in engineered products, particularly permanent magnets [3] Group 2 - The conversation addressed the distinctions between light rare earth and heavy rare earth elements, as well as their relevance in the production of magnets [3] - The market for rare earth materials has experienced a notable shift, with heightened awareness and demand since early April [3]

Summary of MP Materials Conference Call Company Overview - **Company**: MP Materials - **Industry**: Rare Earth Elements and Permanent Magnets Key Points and Arguments Market Dynamics - The market has rapidly evolved from a lack of knowledge about rare earth elements to a heightened awareness due to geopolitical tensions, particularly between the US and China, and export controls imposed by China on critical products [5][12][16] - Permanent magnets are identified as critical enablers of the modern economy, essential for various applications including electric vehicles, drones, and industrial machinery [5][6] Product Segmentation - The discussion highlights the importance of both light and heavy rare earth elements, with a focus on neodymium and praseodymium (NDPR) as the primary components in permanent magnets [6][7] - Heavy rare earth elements like dysprosium and terbium are also produced, but their growth is expected to be slower compared to light rare earths [10][11] Growth Projections - NDPR and magnets are projected to grow at a double-digit compound annual growth rate (CAGR), while heavy rare earths are expected to grow at a slower pace [10][11] - The demand for permanent magnets is driven by their applications across various sectors, including automotive and defense [10][11] Impact of Export Controls - China's recent export controls have prompted a reevaluation of supply chain dependencies, revealing vulnerabilities in the reliance on Chinese-produced magnets [12][14][16] - The controls have led to a wake-up call for industries that previously took the availability of magnets for granted, highlighting the need for domestic production capabilities [14][16] Competitive Positioning - MP Materials positions itself as a national champion in the rare earth space, emphasizing its vertical integration strategy to enhance competitiveness against Chinese producers [19][20] - The company claims to be the lowest cost producer of mixed earth concentrate globally, with plans to expand refining capabilities [20][21] Investment and Production Capacity - Since going public in February 2020, MP Materials has invested nearly $1 billion in its supply chain across upstream, midstream, and downstream operations [28] - The company aims to produce approximately 6,000 tons of NDPR oxide, which could translate to about 12,000 tons of finished magnets [29][30] Government Initiatives - The company supports government initiatives aimed at fostering domestic production of critical materials, including the Section 232 investigation into the national security implications of rare earth elements [32][35] - There is a recognition of the need for a coordinated government approach to build a robust supply chain in the Western world [36][37] Strategic Partnerships - MP Materials is exploring partnerships to build a fully integrated supply chain, which includes refining capabilities and collaboration with other industry players [24][25][26] Additional Important Insights - The company emphasizes the importance of recycling and closed-loop processes to enhance material efficiency and reduce waste in magnet production [22] - The discussion reflects a broader concern about the geopolitical implications of reliance on a single country for critical materials, advocating for a diversified supply chain [16][19] This summary encapsulates the critical insights from the MP Materials conference call, highlighting the company's strategic positioning, market dynamics, and future growth prospects in the rare earth industry.

Core Viewpoint - MP Materials is significantly impacted by the current trade conflict and the strategic importance of securing rare earth materials for the U.S., as evidenced by a 21.8% increase in its share price recently [1] Group 1: Company Overview - MP Materials is described as "America's rare earth magnetics champion" and is the only fully integrated rare earth producer in the U.S. [2] - The company has a major customer, Shenghe Resources, which is a majority-owned subsidiary of China's Shenghe Resources Holding Company, indicating a complicated trading position [2] Group 2: Trade Conflict Impact - In mid-April, MP Materials ceased shipments of rare earth concentrate to China due to tariffs and alignment issues with America's national interest, marking a near-term negative for the company [3] - The trade conflict presents challenges for MP Materials, but it also highlights the urgency for the U.S. to develop its own rare earth supply chain [4] Group 3: Long-term Growth Opportunities - Management emphasizes that the real growth opportunity for MP Materials lies in contributing to the development of a domestic rare earth supply chain in the U.S. [4] - Speculation about potential government funding for the company could positively influence its stock performance, as seen in recent trading activity [6]

Core Insights - MP Materials has gained attention from investors recently after being largely undercovered for years [1] - The investment approach focuses on macro and secular trends, emphasizing durable themes that shape the future [1] - The strategy includes a concentrated portfolio of 8-12 companies, with a buy-and-hold philosophy aimed at long-term income generation and growth opportunities [1] Company Overview - MP Materials operates in the rare earth materials sector, which is critical for various high-tech applications [1] - The company is positioned to benefit from increasing demand for rare earth elements due to their essential role in technology and renewable energy [1] Investment Strategy - The investment philosophy is centered on strong fundamentals, proven management, and attractive valuations [1] - The focus is on long-term ideas that can compound over time, allowing for patient capital allocation [1]

Core Viewpoint - MP Materials Corp. (MP) experienced a 4.1% increase in stock price following discussions between U.S. Secretary of State Rubio and Kazakhstan's Deputy Prime Minister regarding cooperation prospects in rare minerals and technology issues [1] Company Summary - MP Materials Corp. is a key player in the rare earth materials sector, benefiting from geopolitical discussions that may enhance its operational landscape [1] Industry Summary - The discussions between U.S. and Kazakhstan officials highlight the growing importance of rare minerals in technology and industry, indicating potential for increased collaboration and investment in this sector [1]

Core Viewpoint - MP Materials stock is currently considered unattractive due to high valuation and weak operational performance [2][11] Valuation Comparison - MP Materials has a price-to-sales (P/S) ratio of 20.9, significantly higher than the S&P 500's ratio of 3.0 [4] Revenue Performance - MP Materials' revenues have contracted at an average rate of 15.3% over the last three years, while the S&P 500 increased by 5.5% [5] - Revenues rose by 4.6% from $206 million to $216 million in the past 12 months, compared to a 5.5% increase for the S&P 500 [5] - Quarterly revenues increased by 24.9% to $61 million from $49 million a year prior, while the S&P 500 saw a 4.8% improvement [5] Profitability Metrics - MP Materials reported an operating income of $-166 million, resulting in an operating margin of -77.0%, compared to 13.2% for the S&P 500 [6] - The operating cash flow (OCF) was $-8.7 million, indicating an OCF margin of -4.0%, against 14.9% for the S&P 500 [6] - Net income was $-105 million, leading to a net income margin of -48.4%, compared to 11.6% for the S&P 500 [7] Financial Stability - MP Materials had a debt of $916 million with a market capitalization of $4.5 billion, resulting in a debt-to-equity ratio of 20.3%, slightly higher than the S&P 500's 19.9% [8] - Cash and cash equivalents accounted for $759 million of total assets of $2.4 billion, yielding a cash-to-assets ratio of 32.1%, compared to 13.8% for the S&P 500 [8] Downturn Resilience - MP stock has underperformed the S&P 500 during recent downturns, with a notable drop of 50.2% from a high of $49.44 on March 2, 2021, to $24.61 on May 13, 2021, while the S&P 500 dropped 25.4% [10] - The stock fully recovered to its pre-crisis peak by January 4, 2022, but currently trades at approximately $27 [10][11] Overall Assessment - MP Materials is assessed as follows: Growth - Neutral, Profitability - Extremely Weak, Financial Stability - Very Strong, Downturn Resilience - Very Weak, Overall - Weak [13]

Market Trends - MP Materials' shares are rallying amid U S and China trade talks [1] - Rare earths importing and exporting is a key topic in the trade discussions [1]

Core Viewpoint - Morgan Stanley upgraded MP Materials (MP.US) to a "Buy" rating with a target price of $34 per share, highlighting the strategic value of the company amid increasing geopolitical tensions affecting critical mineral supply chains [1] Group 1: Company Overview - MP Materials operates the only active rare earth mine in the U.S. located in Mountain Pass, California, which enhances its strategic importance [1] - The company is recognized as the most vertically integrated rare earth enterprise outside of China, according to Morgan Stanley [1] Group 2: Industry Context - China dominates the global rare earth refining and processing sector, which raises concerns about supply chain stability due to geopolitical and trade tensions [1] - In April, China imposed export controls on seven rare earth elements in response to U.S. tariffs, which remain in effect despite ongoing trade negotiations [1] Group 3: Financial Outlook - Morgan Stanley anticipates that MP Materials will experience negative free cash flow in the next two years, but expects the company to accelerate positive cash flow by 2027 due to a strong balance sheet [2] - The company is developing a fully domestic rare earth supply chain in the U.S. and plans to initiate commercial production of magnets, which are essential for electric vehicle motors and offshore wind turbines [1]