Financial Data and Key Metrics Changes - In Q2 2025, adjusted EBITDA was $9 million compared to $10 million in Q1 2025, with a net loss of $14 million versus a net loss of $9 million in Q1 2025 [52][54] - Cash cost per ton sold was $103, down from $108 in 2024, with a potential $101 if excluding the idled Eagle mine [50][52] - The company anticipates full year 2025 production at the low end of the previous range of 3.9 million to 4.3 million tons, and sales at the low end of 4.1 million to 4.5 million tons [54][56] Business Line Data and Key Metrics Changes - The metallurgical coal benchmark prices dropped approximately 25% year on year, with U.S. indices falling another 5% in Q2 2025 compared to Q1 2025 [20][52] - The company achieved a record level of quarterly production in Q2 2025, with tons sold reaching 1.1 million compared to 900,000 in Q1 2025 [51][52] - The Brook Mine is expected to produce a significant domestic supply of rare earth and critical minerals, with a target for commercial oxide production by 2027, accelerated from 2028 [11][31] Market Data and Key Metrics Changes - Chinese coking coal prices surged 38% in July 2025, indicating a potential recovery in the market [33] - The Australian Premium Low Vol Index increased to $183.2 per ton in July 2025, up from a low of $166 in late March [34] - U.S. steel prices remain the highest globally, nearly double Asian seaborne levels, supporting domestic demand for metallurgical coal [39] Company Strategy and Development Direction - The company is transitioning to a dual platform model, focusing on both metallurgical coal and rare earths, aiming to become a significant player in the critical minerals market [6][25] - Plans to expand rare earth mine production to exceed the currently permitted 2.5 million tons per annum and enhance oxide processing capacity [8][10] - The company is actively engaging with U.S. government agencies to support the development of the Brook Mine, emphasizing its strategic importance for national security [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding pricing recovery in the metallurgical coal market, driven by firmer Chinese fundamentals and resilient Indian demand [23][24] - The company is focused on optimizing production and sales to avoid lower-margin spot sales, particularly in Asia [54][87] - Management highlighted the importance of government support for domestic critical mineral production to level the playing field against foreign competition [66][67] Other Important Information - The Brook Mine has received a five-year renewal of its mining permit, allowing for continued development [48] - The company is increasing its SG&A guidance for 2025 from $36 million to $40 million, reflecting the acceleration of the pilot plant development [57] Q&A Session Summary Question: Impact on quality mix and sales mix between domestic and export - Management expects no impact on the quality portfolio and anticipates a sales mix of roughly two-thirds seaborne and one-third domestic [60][62] Question: Estimated savings from the production tax credit - Estimated savings from the production tax credit are projected to be around $15 million per year on EBITDA [63] Question: Discussions with the administration regarding price support for critical minerals - Management confirmed ongoing discussions with the government but did not disclose specifics, emphasizing the need for support to counteract foreign pricing manipulation [65][67] Question: Pricing assumptions for scandium and balancing supply with demand - Management indicated that demand for scandium is expected to grow, particularly if a Western source becomes available, and they are confident in their pricing assumptions based on market studies [70][72] Question: Key growth drivers in the scandium market - The airline industry is identified as a primary end user for scandium, with potential applications in automotive and other sectors [80][82]

Group 1: Company Performance and Production - The company expects to ship a total of 20 billion square meters of lithium-ion battery wet-process separators from the Malaysia Penang base after it becomes operational in 2025 [3] - In 2024, domestic revenue accounted for 88.68%, while overseas revenue accounted for 11.32% [3] - The company's separator shipment volume accounted for 13.6% of the global market share in 2023, projected to increase to 16.7% in 2024 [4] Group 2: Customer Base and Market Expansion - Major customers include industry leaders such as CATL and BYD, with the sales proportion to the top five customers detailed in the 2024 annual report [2] - The company has established partnerships with notable clients like Samsung SDI, Zhongke Shenlan Huize New Energy, and others to enhance its global market share [3] - The company is actively exploring other functional membrane fields, including water treatment membranes and hydrogen energy membranes [4] Group 3: Product Innovation and Development - The company launched a new aramid series separator product in April 2024, which offers improved electrical performance and safety for electric vehicles and large-scale energy storage solutions [3] - Research and development efforts have led to the production-ready status of oxide and polymer solid-state electrolyte membranes, which are currently undergoing customer certification [4] Group 4: Regulatory and Market Challenges - The company is closely monitoring the potential impact of EU carbon tariffs on separator exports and is proactively expanding overseas production capacity to mitigate tariff risks [3]

Summary of Conference Call Records Industry Overview - The records focus on the tungsten industry, specifically the production and market dynamics of tungsten products in the first quarter of 2025 [1][2][3]. Key Points and Arguments - **Production Trends**: In Q1 2025, tungsten concentrate production increased by less than 1% year-on-year, while hard alloy production rose by nearly 10%, indicating a shift in the industry focus towards downstream products [1]. - **Export and Import Dynamics**: Exports of tungsten products saw a cumulative decline of 27% in Q1 2025, primarily due to policy adjustments. Imports, however, increased by 20%, with tungsten ore imports growing over 40% [1][2]. - **Price Movements**: Tungsten prices rose by 15% year-on-year in Q1 2025, continuing a trend that began in 2023. The price is expected to fluctuate between 20% and 30%, with an average price potentially reaching around 160,000 yuan [1]. - **Regulatory Impact**: Current regulations do not completely ban exports but manage them through dual-use item controls. This has led to restrictions on raw material exports while allowing deep-processed products to remain accessible [2]. - **Emerging Demand**: The demand for tungsten from nuclear fusion experimental reactors is projected to exceed 3,000 tons, accounting for about 5% of China's consumption. This demand is expected to grow as construction of various experimental reactors accelerates [2]. Additional Important Insights - **Supply Chain Challenges**: The construction of new tungsten mines, such as the Dahuatang mine, is expected to take 2-3 years, while the Zhuxi mine faces delays due to unresolved mining rights [3]. - **Sector-Specific Growth**: The hard alloy sector experienced a demand increase of nearly 9%, driven by applications in construction, mining, and roadwork. The wood processing sector saw a growth rate of 15%, indicating strong market potential [3]. - **Inventory Levels**: Current industry inventory is low, and the growth of deep-processed products is outpacing that of raw materials, exacerbating inventory tightness [3]. - **Long-term Supply Outlook**: The Bakuta mine is expected to release 7,000 tons of metal capacity in its first phase, with full production taking 1-2 years. However, this new supply is unlikely to significantly alter the global tungsten market's supply-demand balance [4][5].