Ladies and gentlemen, welcome to the MP Materials Financial Results Conference Call and Webcast. My name is Charlie, and I will be coordinating your call today. If you would like to ask a question during the presentation, you may register to do so by pressing star followed by one on your telephone keypad. I will now hand over to your host, Head of Investor Relations, Martin Sheehan, to begin. Martin, please go ahead. Thank you, operator, and good day, everyone. Welcome to MP Materials' Q1 2021 earnings call. With me today are James Litinsky, Chairman and Chief Executive Officer of MP Materials, Michael Rosenthal, Chief Operating Officer, and Ryan Corbett, Chief Financial Officer. To follow along with our discussion today, we encourage you to download our slides from our investor website. Before we get to James and Ryan's opening remarks, I'd like to remind you that during today's call, we will make certain forward-looking statements that do not constitute historical facts under the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. For more information about factors that may cause actual results to materially differ from forward-looking statements, please refer to the cautionary language in the earnings release and in our filings with the SEC, including the Risk Factors section in our recent SEC filings. During the call, management will also discuss certain non-GAAP financial measures, which we believe to be useful in evaluating MP Materials' operating performance. These measures should not be considered in isolation or as a substitute for MP Materials' financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our current report on Form 8-K filed today and can be found on our website, investors.mpmaterials.com. Please check our investor website regularly and follow us on Twitter, Instagram, and LinkedIn, where we often provide news and information on the company. With that, I'll turn the call over to Jim. Jim? Thanks, Martin, and thank you to everyone joining us on the call this afternoon. I'm going to cover a few things today. First, I will recap the highlights of our outstanding Q1 results. Second, I will provide a quick update on our stage two optimization plan at Mountain Pass. I will turn it over to Ryan for some more color on our performance. Finally, I will make some closing comments before opening it up for Q&A. Let's start with Q1 highlights on slide four. We achieved record Q1 production and sales volumes. These numbers show the significant operating leverage we can achieve when higher NdPr prices meet best-in-class production costs. Our revenue nearly tripled year-over-year. Adjusted EBITDA was up more than sixfold, and our adjusted EBITDA margin more than doubled year-over-year to over 57%. I will talk more about our record sales and production volumes in a minute. The other big highlight in the quarter was our green convertible bond offering. I would like to spend a moment on the green convert. I know the initial market reaction to the transaction was not as we had hoped. I would like to take you all through our logic so you can better understand why we did it and what this means for long-term value creation. First, as we talked about last quarter, we are seeing activity accelerate in the electrification and decarbonization supply chain, particularly related to EVs. The scale of the global acceleration in capital investment is mind-boggling. A recent IEA report stated that while it took 10 years to reach 10 million EVs on the road in 2020, they expected that over the next 10 years, by 2030, this number would climb to 145 million. This may seem like staggering growth, but that would only be about 7% of the global fleet. This excludes two and three-wheelers, where there is also huge potential for electrification. By the way, the IEA report followed up their EV study right away with a look at critical materials. MP is not capital markets reliant, but we are opportunistic. We now have the firepower to make what we believe are extremely attractive, highly accretive investments towards our mission, regardless of market conditions. If attractive opportunities do not present themselves, we can always return the capital to shareholders, the largest of whom is me. We believe this option value in our very conservative capital structure is valuable to us all. Second, some of you have heard me talk about the importance of the green bond market. I have been a vocal proponent of this mechanism for the electrification and decarbonization revolution. Better pricing the externalities across global industry will instill further capital markets constraints on the bad actors and benefits on the good actors. I strongly believe that this bifurcation is just getting started. It is a moral and financial imperative that we position MP to be one of the good actors for this decade-plus theme to come. It will likely shape conversations with industrial and government participants in the years to come. We see it already. We look forward to the challenge of our shareholders and the market holding us to these higher standards and believe this is a source of competitive differentiation in our industry, particularly when you look at our competition in rare earths. In the end, I think the green bond created very attractive low-cost optionality for us. I believe it enhanced our value creation prospects as various stakeholders gained further confidence that MP is a reliable thought leader. We believe we have the proper platform for the future, and we will continue to build upon our reputation for execution, both operationally and financially. In conclusion on the quarter, stage two is on track and stage three is accelerating. I will discuss these, but let's move on to slide five first to cover more detail on our strong execution in the quarter. Starting on the top left, you can see that our sales volume was up 18% versus last year. Q1 is usually seasonally weak due to Chinese New Year, but with the impact of a COVID year-over-year comparison, coupled with even greater demand from increased electrification, we did not see much usual seasonal impact. By the way, logistics have been a real challenge throughout the world lately, our operations team deserves a lot of credit for navigating such difficult conditions to a great result for us all. On the top right, you can see the strong pricing we achieved for concentrate as the market appetite for NdPr continues to power higher. Pricing for NdPr increased throughout Q1 and remained very strong through April. Pricing for concentrate followed a similar pattern in Q1 and remained strong. Do not forget that our concentrate sales represent commensurate separated NdPr in the market. Stage two production means we will enjoy that massive uplift of refined product revenue without creating incremental global supply of separated NdPr. Our revenue in a given quarter is obviously a function of sales volumes and pricing. There can be modest timing differences between production volumes and sales volumes over time, particularly due to shipping. Yet long-term financial results are ultimately driven by our ability to produce as much as we can, as efficiently as we can. Internally, we closely watch our throughput or feed rate, the recovery or what percentage of the REO fed into the mill results in sellable product on an REO basis, and plant uptime as the main drivers of our business. Production volumes remained strong in the quarter with 9,849 metric tons produced. Over the last 12 months, we have produced nearly 39,000 metric tons of rare earth oxides in concentrate. You can also see here that production costs remain very low at $1,475 a metric ton. Costs were up a bit versus last year in large part due to timing of plant turnarounds and the reagent trial we talked about last quarter, which was completed towards the end of January. We also increased hiring in anticipation of future growth. We now have over 320 dedicated employees doing incredible work towards our mission. These are challenging jobs with high expectations, and the MP team knows we have some naysayers. The idea that an American company can compete globally in rare earths while preserving stringent environmental standards does not serve the preferred narratives of certain opportunists, but here we are. Most importantly, I would like to tell you very humbly that we recently hit a milestone of going 365 consecutive days and over 400,000 work hours without an injury causing someone to miss work. Fantastic results like we reported today only mean something when they occur behind a first priority cultural focus on safety. Let's move on to slide six for a quick update on stage two. As many of you know, stage 2 is our plan to move from today's profitable concentrate production to separating rare earth oxides. Success means we will have restored the downstream production of these critical elements to the United States of America. Stage two is also expected to provide significant upside to our financial profile, which Ryan will talk about in a bit more detail. Last quarter, we covered some details of our optimization plan, including CapEx, and how we believe we significantly derisked stage two relative to last year. We made a lot of continued progress during the quarter. We completed the pre-civil site work. The foundation work for critical new equipment is in progress. The fabrication of the roaster is nearly complete with delivery expected very soon. Some ancillary components of the roaster and material handling equipment have actually already arrived on site. The fabrication of the solvent extraction crystallizer is nearly complete, and we actually have key portions of it delivered and on site as well. See the cool photo on the left side of the page there. Net-net, we're making a lot of progress executing stage two, and I look forward to keeping you posted. Now with that, I will turn it over to Ryan. Ryan? Thanks, Jim, and hello, everyone. Jim already covered a few of the financial highlights, but let me give you some additional thoughts on the quarter, and I'll begin on slide eight. As Jim pointed out, our year-over-year revenue nearly tripled, we also saw over 40% growth compared to Q4. This was driven by 46% growth in realized pricing to nearly $6,000 per metric ton of REO. Meanwhile, our adjusted EBITDA increased over 80% from Q4. Jim also mentioned the leverage of our model from NdPr pricing. Our REO product margin increased from just over $1,200 per metric ton a year ago and $2,500 in Q4 to over $4,400 in Q1, driven almost entirely by the price of NdPr and its impact on the price of our concentrate. The result of which is that sequentially, our revenues increased $18 million, whereas our EBITDA increased $15 million. As we've discussed, the vast majority of incremental revenues flow through to the bottom line, causing our sequential EBITDA margin to improve almost 15 percentage points. Compared to the first quarter of 2020, the 70% flow-through of revenue to EBITDA is less stark, although still excellent, primarily driven by the growth in headcount as we prepare for stage two in the build-out of our public company infrastructure. Our sequential performance is more indicative of what we expect in the future. Finally, regarding the impact of stage two on our financials, assuming current NdPr pricing and our expected cost of operating stage two we gave back in July, on an apples-to-apples basis, our Q1 product margin of $4,400 per metric ton of REO produced through the mill would roughly double at full run rate production through stage two. We have a way to go to get stage two up and running and to run rate production levels in 2023. Anything can happen to the pricing of NdPr in the meantime. We did want to give you a feel for the improved profitability stage two brings to the table. Lastly, I would add that our Q2 is shaping up to be strong, driven by NdPr and concentrate pricing. Of course, the West Coast ports are still experiencing delays. As with this past quarter, the timing of shipments is the primary unknown. However, for the full year, we continue to expect full year production to increase slightly versus 2020, resulting in very strong full year 2021 results given what we're seeing in the market. Moving on to the next slide. Last quarter, we looked at our full year cash flow of stage 1 operations. Here we've updated it for the Q1. Similar to last quarter as well, in the appendix, you'll see a detailed walk of how we get from our adjusted EBITDA to our reported operating cash flow and then our reported free cash flow. Looking specifically at slide nine, on the left side of the chart, you can see our free cash flow for the quarter was a use of $10 million. Adjusted for our offtake paydown of $11 million, the CapEx spent on our stage two optimization, plant reconditioning activities, and related projects in the quarter, as well as one-time deal expenses, our stage 1 process generated over $21 million of normalized free cash flow in Q1. That's over $80 million on an annualized basis compared to $34 million in fiscal year 2020. That's also a very strong 35% free cash flow margin, up from 25% for the full year 2020. Keep in mind that the offtake balance is essentially debt. Per US GAAP, the impact of the paydown of that agreement, because our offtake partner retains a portion of the cash from sales of products to pay down the obligation, the impact runs through operating cash flow instead of financing in the cash flow statement as might be expected, which is why we believe it's relevant to add it back to our free cash flow for a comparable metric. Moving to slide 10, I'll give a quick update on our balance sheet. As discussed earlier, the green bond resulted in net proceeds of over $672 million, and combined with our performance in the quarter, results in a cash balance of nearly $1.2 billion at the end of Q1. In addition, the balance of our offtake agreement was reduced to $60 million in the quarter. As many of you are aware, the SEC recently issued guidance regarding the accounting treatment of warrants typically associated with SPACs and De-SPAC issuers. Each company's situation is unique, and we have closely evaluated our specific facts and circumstances considering this new guidance. In consultation with our outside legal counsel and external auditors, we believe that our outstanding public warrants continue to meet the requirements for equity classification and that no change in accounting treatment or restatement is necessary. Additionally, regarding the public warrants, we announced on Tuesday our intention to redeem these warrants and require a cashless exercise during the redemption period. Given our capital position, this allows us to reduce dilution to our shareholders by foregoing the cash underlying the warrant strike price. With the strong confidence we have in the cash flow profile of our current and go-forward plan, this was the value-maximizing path for shareholders. With the conversion ratio discussed in our redemption notice and excluding the impact of the convertible note as it is out of the money, our current share count is approximately 178.3 million shares. I'll turn it back to Jim to wrap up. Thanks, Ryan. Before Q&A, I would like to take a moment to summarize why we believe MP is so well-positioned to become a Western champion of the electrification and sustainability revolution. First, we have a co-located set of unique world-class assets. These are our ore body and our nearly $2 billion state-of-the-art processing and separation facility. Let me start with our ore body. We have a bastnasite ore body, which contains north of a 7% mix of rare earths, one of the highest anywhere in the world. Most mines are in the 1%-2% range, and some speculative mines are well under 1%. That means our competition must mine three to seven times more toll rock to get the same REO output out of the ground. That in turn means more reagents, more processing, and more time. That all means much higher operating costs. Additionally, a bastnasite ore body allows for roasting without the use of additional chemicals, at lower temperatures, and with fewer potential emissions. We also do not have the radioactivity issues you may have read about elsewhere. These factors compound our early advantage from both a cost and environmental impact standpoint. We have a $2 billion state-of-the-art co-located facility in California. There are few such facilities of this scale, and none in the world that are co-located with the mine like we have at Mountain Pass. This further reduces transportation, shipping, and environmental costs. We believe the quality of our ore body, plus this state-of-the-art facility, positions us to become the world's lowest cost producer of separated NdPr, assuming we execute. Second, we have structural and financial advantages. Those advantages are scale, time to market, and scarcity value. All are aligned with a compelling long-term demand outlook for our primary product. Remember that just building a plant of enough scale to compete will take years and bear significant costs, especially with escalating materials prices like we talked about on our last call. Hopefully, we gave some of you an early hint at this emerging industrial trend that was subsequently confirmed by many companies this earning season, including Berkshire Hathaway this past weekend. Materials and labor inflation is happening across the economy, which means the replacement cost of many things is headed much higher. We believe this trend is a powerful tailwind for MP's structural advantage beyond simply a reasonable expectation that the price of NdPr should move up with inflation and then some due to demand. Other than a competitor potentially building a refining plant in Texas, which is still not financed or permitted, let alone broken ground in construction, we do not see any material western supply coming online anytime soon. There has not even been any significant fundraising for such projects, despite NDPR pricing climbing north of $85 a kilo. The often told joke is that rare earths are not rare. That's true, but it misses the bigger point. What is extremely rare is a scaled, economically viable deposit, and the time, cost, and expertise to bring any such deposit online only compounds that scarcity. Third, our stage 1 process is profitable and cash generative. We did go public via a SPAC, and our business is levered to electrification. One could simplistically bucket MP with the hyper-speculative electrification group, many of which we believe will not generate cash flow for years, and some others which also may have very aspirational projection targets. Our existing operations are not speculative, and we have materially outperformed the original stage 1 projections we laid out at the time of our go-public announcement in July of last year. Our stage two is fully funded and expected to come online sometime next year. Our expectation is that this will accelerate our financial performance. Fourth, we have an owner-operator culture with a sustainability focus. From my earlier discussion on the green bond, you know that we believe our platform gives us a competitive advantage. Every qualifying employee was granted shares when we went public, and I remain the largest shareholder of the company. We are committed to our vision. Our incentives are aligned with you. Lastly, we are at the ground floor of what we believe will be a decade-plus transformational growth opportunity. Some of you may have seen a cover story in The Wall Street Journal on Tuesday about the evolution of the auto supply chain for the age of electrification. We also tweeted it the other day, in case you missed it. The auto industry faces existential risk from the past practice of just-in-time manufacturing. This new era is one where the ability to vertically integrate the supply chain is a source of strategic advantage. Companies are now competing for the kinds of scarce resources that are exactly what we have at MP. This is why you have seen companies like Tesla and others talking about mining in recent months. The semiconductor mess makes this an even hotter topic, and we see it now in conversations. Our stage 3 efforts continue at a furious pace. I know many of you want lots of details, but we will share with you what we can when we think it's appropriate. I would point out, though, that regardless of the path we take, our mission is to restore the full domestic supply chain. Remember, this is not just about the auto supply chain. Rare-earth permanent magnets are also important to so many growth industries of tomorrow, like wind turbines and drones, and then maybe some currently unexpected ones, like air taxis. Who knows exactly what will come next, but the opportunity is ours. With that, let's go to Q&A. Operator? Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, hit star followed by two. Our first question comes from David Deckelbaum of Cowen. Your line is open. Please go ahead. Morning, Jim and Ryan. Michael, thanks for taking the questions. Sure. How's it going? Sorry. Good. Sorry about the connection. No problem. I just wanted to discuss, just so I'm clear on trajectory through the year. In the first quarter, it looks like there was some delayed sales due to shipments. You talked about the ports just still having some issues. Was this a global issue? Did the canal at all have any impacts on slowed shipments in 1Q? Should we naturally see a catch-up in the second quarter? Okay, Ryan, why don't you take that? Yeah, sure. Yeah. Hey, David. I'd say our original expectation that we flagged on the last call was that just given the congestion we had seen in the L.A. ports, given we ship out of Long Beach and L.A. Port That shipments frankly are lumpy. We're only able to get product to the port within a certain period of time of that product planning to leave the port. When there is congestion, that limits our ability to ship out product. What we did see is a pretty heroic effort from our operations and logistics teams to get out from what you saw. A very significant portion of our production did sell in the quarter, and that's why production volume and sales volume matched pretty closely this quarter in an even better shape than what we even see typically seasonally in Q1, given we tend to see a seasonal Q1 slowdown on the shipping side from Chinese New Year on the import side. I'd say the ports have become a bit less congested, but it is still something that we watch very closely. What I would say is that it's something that we have on our radar that we continue to watch. We think it should improve over the course of the year, and certainly, we think on a medium, long-term basis, our full-year sales and production should match very closely. We just want to be clear that in any given quarter, shipping can impact revenue recognized just given that lumpiness. Okay. Thanks, Ryan. I'll try to just stick to two questions here so I can be kind to others. James Litinsky, you talked about sort of progressing on stage three. I guess I just wanted to square your comments with. You talked about the success, obviously, in the green convert. When we think about those proceeds, do we think about that as being sort of held for investment in stage three, or do you look at those converts as being flexible beyond what you've already outlined between stage two and stage three, perhaps for other potentially creative opportunities that we're not thinking about? You know that obviously if you look at the business, we have a cash flow positive business today in our core. Stage two is limited amount of capital relative to our cash balance. I think the way to think about it is we have a fortress balance sheet and a platform that is increasingly becoming the thought leader in this Western supply chain in our space. What I would say is that convert really created a lot of optionality in our capital structure to take advantage of what we see out there. If we don't find a very attractive way to utilize that capital, we can return it to shareholders. Again, we've come at this from an investment perspective. We're fully aware of returns on capital and making sure that things make sense. We're going to stay on mission. If the question is the capital going to be utilized to kind of go in some other direction or something like that, we are plenty busy with our near-term plans of executing stage two. As I've said plenty, we have a pretty great stage three team that I work closely with of sort of materials scientists and technologists and business development folks. We are looking very closely at a number of buy, build and/or JV opportunities as I've said. You can imagine that the chatter up and down the supply chain has just dramatically accelerated. It was already very loud back last year. Again, look at The Wall Street Journal a couple of days ago and think about what's happening in the supply chain with semiconductors. I think the fact that we now have positioned ourselves as not only a credible counterparty, not that we weren't, but I think that this just sort of adds to the momentum with respect to that. Also shows that we are holding ourselves to account in the capital markets with the kind of standards that both consumers and our industrial potential partners would want to hold us to just creates a lot of value sort of writ large. That's sort of the logic behind it. Again, I would remind you that we are the large shareholders here, so we're not looking to go on sort of fantasy directions in other ways. We're really looking to complete our mission, do so in a proper way and make a lot of money for shareholders. Thanks for the responses, guys. Sure. Our next question comes from Timna Tunner s of Bank of America. Your line is open. Please go ahead. Oh, hey. Good afternoon, guys. Hey. Hi, Timna. Nice talking to you. Hello. Yeah, definitely. Wanted to circle back on the longstanding guidance you've had in the past of $250 million EBITDA by the time that stage two is fully ramped up, assumedly full year 2023. I might have heard this wrong, so I just wanted to clarify. I thought others might appreciate it. There was a comment saying that when stage two is fully up and running, EBITDA could be double at current prices what it was in the first quarter. First off, I guess I just want to clarify if that's true, and if that were true, then the run rate would be about, I want to say, $264 million. Can you just let us know if that was indeed the right way to think about those comments? Yeah. Go ahead, Jim. Ryan, let me just say, the number that you're referencing refers to the number that was in the go-public transaction from July of last year. That represented a number based on a midpoint of potential NDPR prices, with specifically $70 NDPR. We obviously are sort of in the mid-80s today. You can do the math. We also said on last call that we believed that we were able to make some improvements on our potential operating costs from what we see with respect to a normalized 2023 on an apples to apples basis versus last year. We haven't updated guidance for new prices, but I think with those moving parts, you can probably put together numbers and think through the significant operating leverage that we have. Ryan, I don't know if you want to add on to that. Jim, I think there's some confusion on just talking about product margin versus total EBITDA. I think that's the disconnect. We were talking about product margin, looking at our current production in stage 1. If we were separating it, that product margin would double. To Jim's point, no change in our guidance whatsoever in terms of what we think the cost structure looks like pro forma for stage two. As Jim mentioned, that midpoint of $70 of NDPR, we had guided to approximately $250 million of EBITDA. If you look at the slides and information that we put it at that time, we did sort of a low and high NDPR case as well, just to sensitize for you what that looks like in that $90 case that's in our slides was $352 million of EBITDA. Absolutely no change from that guidance. Okay. That's super helpful. Thank you for that. If I could add a second question is just, I recognize that you talk about stage three, but aren't prepared to elaborate on what that might look like. I appreciate that, wondering if you can comment on any thoughts about heavy rare earths and separation or production there, and when we might get any update on timing for stage three, please. Sure. On the heavy side, the only thing that we have put out publicly was that we have a project with DoD, and that release sort of was late last year, and that speaks for itself. We haven't otherwise said anything with respect to heavies. I'll just let that speak for itself. As far as stage three updates, obviously, as you can imagine, we understand the investors want to know as much as they possibly can, and we'd love to be as transparent as we possibly can. We have to just kind of keep moving forward and do what we think is right. We want to make sure that whatever it is that we sort of tell you or share is heavily vetted, real or whatever. We're not looking to kind of put out a bunch of stuff until it's appropriate. That's really all I have to say on that front. Obviously, we'll make stage three announcements as soon as we possibly can when appropriate. Understood. Thanks, guys. Yeah, of course. Our next question comes from Sathish Kasinathan of Deutsche Bank. Your line is open. Please go ahead. Hi. Thanks for taking my questions. Yeah. My first question is on the commercial side of stage two. makers for any potential offtake agreements for your stage two products? It cut out there, but I think you asked, do we have any offtake contracts for stage two? Yeah. Yeah. Have you had any discussion on that? Well, you can imagine that from quite a while ago, but you can imagine that conversations are particularly hot these days given everything that's happened in the supply chain and specifically semiconductors and frankly, the importance of our space. I referenced an IEA report that just recently came out. We actually also tweeted that, and then there was a follow-up around critical materials. We really do see what we have as being extremely strategic to the downstream OEMs and frankly, other industrial participants as the world electrifies. I've taken the view, and frankly, I think it's fair to say we got a little bit of, maybe criticism isn't the right word, but questioning last year about why we wouldn't sign offtake contracts. What I've sort of consistently said is that I believe that we are headed into a game changer regime here. We have a very strategic asset. The world wants what we've got. We want to make sure that whenever we do contract, that we are doing so in a way that we think maximizes value for all of us. To the extent that we wanted to go out and sign a contract, I'm highly confident we could do so, but we have not done anything at this time, and obviously never say never. We could change our minds tomorrow, and you could see something, but we have not to date done anything. Ryan- Yeah, Ryan, go ahead. Just real quick, I think I'd flag also, obviously, the thing that I think people lose sight of is this is not new supply, right? This supply is being consumed in the market today, and so we have all the confidence that this can be consumed on the spot market, and I think to Jim's point. The reason we're not trying to lock in prices here is because we're incredibly bullish, the future pricing of the materials. Obviously, never say never, as Jim said. I think the other thing to keep in mind is, we do have what we view as a very strategic asset in our current offtake arrangement and marketing ability into the Asian market. I think we can continue to leverage that as we would like to with stage two product. It's not limited to stage one product. Okay. Thank you. My second question is on the market. One of your peers talked about Chinese players looking to expand capacity over the next three years. Do you have any insights on whether these are processing capacities or just on the mining side, or what it means to the overall market? Yeah. I'm glad you asked that. I found some of that commentary out there, whether it's companies or analysts or media, I find a little perplexing. I have a totally different view of it. Let me first say, nobody knows what's going to happen in the next month or couple of months on pricing. In the short term, commodities can be obviously extraordinarily volatile. With that caveat, I think when it comes to China, you really have to think, instead of looking at Western media or Western protagonists, if you will, I think it's best to actually look what they're doing and saying inside China. In March, the current head of the Ministry of Industry and Information, MIIT, who's also the previous Chairman of Chinalco, one of the large state-owned aluminum and rare earth producers, made some very interesting public statements. By the way, the MIIT is the primary regulator of the rare earth industry and much of China's overall industrial development. This was the head of that. According to the reports, he stated that rare earth producers face a number of environmental problems with excessive mining and refining, creating low prices. He actually went on to say that the prices reflect earth, not that they're rare. I was surprised this didn't get further coverage. He went on to say that over the course of the Chinese market dominance, rare earths have been over-extracted, resulting in environmental devastation, and that prices for these, and this is a direct quote, Industrial gold doesn't reflect their full value. By the way, to refer to it as industrial gold is quite an interesting thing. For the head of MIIT, an organization that's really focused on economic development, to talk about externalities in such a strong way, was fascinating. So I actually believe, and our team believes, and again, it's China, we're just trying to read tea leaves, that Chinese government policy has shifted from one of market dominance at any cost, to wanting a more sustainable, profitable industry that better reflects the overall costs of the externalities. If you think about it, this actually fits with common sense. The rare earth industry is, call it $4 billion or $5 billion globally. Now, I think it's going to grow by many multiples over the coming years. This feeds into a $1 trillion-plus opportunity downstream. Look at the New York Stock Exchange, right? There are massive Chinese companies that are now competing globally. Why would the Chinese government, and again, this is just our opinion from what we read, but why would they subsidize industrial gold for the rest of the world when they're competing against the rest of the world? I think that because the last cycle was really sort of a quick boom bust around a demand shock, and there was obviously the debacle of our predecessor that really had nothing to do with China, and there's sort of a lot of talk in the media, I think people are missing the bigger picture thing of what's happening here. I always like to say that the next decade very rarely looks like the last decade. I think people are backward-looking, or analysts like to just sort of slap a $70 number on NdPr and say, "Oh, okay. At 70, that's the price of marginal development. Therefore, prices can't go beyond that. That's just not how things work in the real world. This is painstaking work. We've been at this for quite some time. These are multi-billion-dollar facilities. Even if you had unlimited capital and unlimited human capital, and you had the ore body, and you had the permitting, none of which exists in scale right now in the Western world, this still takes several years. China, in our view, has already shifted to a policy of profitability because they're not focused on the last prior decade, they're focused on the forward one. I just think people are missing that. Again, it's our opinion. It's what we see. Things could always change. That's really our perspective on this. I think that we are headed into, again, with the caveat that the short term is always potentially messy, we are headed into a 2.0 cycle. I do believe, I've said this repeatedly, that prices in the new cycle typically go to the inflation-adjusted prior peak and then some. I believe that. That's our perspective for what it's worth. Thank you. That's helpful color. Thank you. Our next question comes from Ben Kallo of Baird. Your line is open. Please go ahead. Hey, guys. Hey, Jim. Hey, Ben. How you doing? Oh, thanks. Good. You sound fired up. Yeah. Hey, we do that. We're on a mission. It's good. We're ending our two weeks of heavy earnings, and you've been there before. Inflation comes up a bunch, and labor and when you talk about stage two, stage three, I guess my question is just about, and now past where it is, how labor is or just, I guess getting people to work at your company, I guess is my first question. Then the supply chain through China. You talked about it a bit. Is there more onshoring like a greenfield is better opportunity than to do something else, to acquire something in China because of worries about trade tensions? Thanks. On your point on inflation, it's a great question. I believe you're on our last call, and I think we hopefully can get credit for giving folks an early kind of view on this before it became commonplace this quarter. We were seeing significant rises in prices across materials, across lots of things. We worked furiously to get our stage two optimization contracted. I think that that was a great strategic asset that we achieved for our shareholders. I think that, and you're seeing this in the capital markets, there's a bit of a regime change where you're seeing the commodities producers. Obviously, it's not rare earths, it's steel, it's copper, where you're seeing some of these things get going and I think people aren't realizing this is a new cycle, right? We've had a decade-long bear market. In the real world, things are just not as easy to just slap on new supply. It's not all shale. The way to think about it is these kinds of businesses typically actually have the most upside operating leverage to that phenomenon. To the extent that you believe inflation is here, to the extent that you believe commodities prices are higher, these are the kinds of companies you want to be investing in. If it's a cycle just getting going, it's just getting going. Again, that's my personal view. As far as our labor, to answer your question, when you look at the math, it's very small relative to the operating leverage that comes from pricing as the cycle kicks in. I would say from a talent perspective, like anyone out there, we're actually growing quite a bit. We've sort of stated that, but I think our going public, and frankly, the importance of our mission, both from an environmental and national security standpoint, really sort of strikes the passion of a lot of people. I think that we've seen a lot of really talented people who want to come join us, and then obviously, we've been hiring them, and so our team just continues to grow. I think that our ability to build talent is still there. I think we have the benefit of, again, being such a unique company and unique set of assets. I would imagine it is sort of very hard out there, in general, for what that opinion is worth. I would also say, I think that again, speaks to the strategic advantage we have because whoever's out there trying to raise capital, again, we have seen no capital formation in the Western world for this stuff. Whatever they thought it cost last week, it's a lot more expensive, and it's going to be a lot more expensive next week. That just sort of speaks to the reflexivity of what we're facing today. Again, yeah, labor costs can go up, but I think that we have attracted a lot of talent. I hopefully will continue to attract great talent. If you have friends that are engineers, send us their resumes. We're always looking for great people. I think that's what we're seeing. Those trends that you're witnessing are a tailwind for us, we believe. And then- The only thing I'd add on that. This. Thank you. Yeah, go ahead, Ryan. Yeah. Ben, I think it's. Yeah, I think some context too, just on sort of location, I think we obviously are proud of the fact that we have really what we think is the only co-located asset, and we're in the Mojave, so when we say that, people think of us being in the middle of the Mojave, but we're 45 minutes outside of the city of Las Vegas. So our ability to attract talent, it has not been an issue at all. We've been able to grow pretty well, both on the corporate side and the operations side. I think you can see in the results the reasons we continue to be able to drive pretty significant efficiencies, growing production despite many fewer production days this quarter year-over-year is the fact that we have been adding, for example, probably the best maintenance staff that we've had, plant maintenance, ever. We expect that to continue and we're gearing up ahead of stage two, and we expect to be able to extract efficiencies out of that as well, just given the quality of the folks that we've been able to attract. That has not been an issue. To James's point, importantly, if inflation is here, the leverage for us is just right, where prices on our product will go up. We'll have a bigger impact than the impact to our costs from a labor perspective. The one thing I wanted to hit on your second question about sort of the on-shoring and is it better to do something greenfield in the U.S., versus having some sort of a JV or something. We're obviously not going to comment on specifics of stage three, I think your question hits on exactly why we think we have such an incredible competitive advantage, both in our current business and in our potential stage three, where we are the only co-located asset of scale. Absolutely, our customers and the end users of these products, the industrial end users, are seeing what has happened with the supply chain with semiconductors and having a mine on one continent and a processing facility on another continent and then, another piece of that on a third. It's just not an acceptable risk for some of these customers. I think we're just absolutely in pole position, given our co-location and the scale of our asset. I think that is the competitive advantage when we think about stage three and moving into magnetics is access and secure access to raw materials. Maybe on that front too, we had some lithium guys report today. The question always is how difficult it is to get lithium. There's a bunch of, I think, Jim, you talked about the juniors out there trying to make a mine. You got Lynas down there in Australia. How long does it take to make a mine like you guys have? If you guys had a guess from your engineers. Yeah. It's a great question, and we try to make that point because this is hard. It takes years. You need an ore body to start, right? If you don't have an economic ore body, sometimes you'll hear from juniors, Oh, we have this new technology. Right? We have a smarter way to process. I'm typically skeptical of those claims. I think if someone came out and said, some guy in his garage said, I have a new way to make a computer chip, and I'm going to compete against Intel, and build a fab, and it's only going to cost me $1 billion. I think people would be a little skeptical. With some of these juniors out there that are making these claims, I think there's a little bit of that where there needs to be a significant capital raise, but it really does require This is a chemical plant. It's complex and difficult to do. One, you got to start with the ore body, if you have a 1% ore body, you just can't be economic, again, unless you change the laws of chemistry. From there, you got to get financed, you got to get permitted. By the way, you have to go out and hire tons of people who know what they're doing. Frankly, the only people in the Western world who have any experience doing this are at MP Materials. We just think that this is really just such a powerful source of strategic advantage for us. We've also said that we believe the lowest risk, nearest term, highest return on capital source of new supply would be one, us getting more efficient at Mountain Pass, that's obvious, but is us doing some kind of expansion at Mountain Pass where we made an investment. Obviously, I'm not saying anything today. We would obviously be very specific if we were to make an announcement on that front. That would be likely the nearest term source of Western supply, at least as far as we see it today. Again, I just think that this idea that you'll see all sorts of Western supply, we haven't even yet really seen real capital formation, let alone actual facilities, and that'll take time. By the way, even with an experienced operator, that in theory would ship material from the other side of the world to here, you have to get the financing in place, and you have to get permitted, and you got to build it. Anyway, you get my point. I just think that there's a lot of stuff here. You basically have people, I get this question all the time, Well, Jim, rare earths aren't rare. Well, yeah. That's totally beside the point. What's rare is actually having an ore body that can be done economically, having the human capital, the financial capital, the expert, going out and making it happen over a number of years. Again, I think people miss that, and so we try to Hopefully that's helpful, Colin. I don't know if Ryan or Michael, do you want anything on that? No, that's good. Yeah. That's good. Yeah. The only thing I'd say is. Thanks, Ryan. To your point on lithium, I think that's why we're so incredibly bullish about our particular piece of sort of this electrification materials is the supply-demand function in rare earths, it is just much more difficult to add supply than many of the other materials. I think we're all incredibly bullish, all of these materials, given the demand that we see. I think the critical differentiator, all of us likely will see this demand boom, but the supply and how difficult it is to add supply is what's very unique and, pun intended, rare in our space. Yeah. I'm glad Ryan addressed the lithium point. I guess I forgot to do that. Lithium, just as an example, you have a lot of production in South America, then you have the North Carolina area and Nevada. There are lots of areas where, to the extent the investment is made, with time you can get product online. Again, as Ryan said, we're bullish on all of this stuff. I think just the game changer that's happening in the commodities space with respect to electrification is pretty amazing. This is very different than lithium for the exact reason that you have to find an ore body that can be economic just to get in the game, and we don't know of one that exists in the Western world today. Thank you. That's helpful. Sure. Our next question comes from Corinne Blanchard of Morgan Stanley. Your line is open. Please go ahead. Hey, everyone. Thanks for taking my question. Hey. I'll apologize in advance if this was already asked. I got disconnected for a minute from the call. I'm wondering if you could give us some additional color in terms of the pace of CapEx, either as we think about the rest of this year or thinking stage two. Overall, do we assume just a steady pace within that budget and the timeline minus what was spent this quarter, or could it be more weighted towards? Yeah The back end of the project or lumpy throughout? What's the best way to think about that? Yeah. We have not given any guidance around specific timing on stage two CapEx. Maybe, Ryan, you can not answer the question in a more artful, detailed way. Yeah, no, I think. Any helpful color. Yeah, no, there is certainly the chance for it to be lumpy. I think we did discuss at a very high level, as with any of these projects, it's a little bit lighter in the beginning, and it gets a little bit heavier towards the end as parts of the project complete. I certainly wouldn't draw a straight line. There will be lumpiness just based on certain milestones that are achieved. Certainly, I'd say, you saw our spend this quarter. Next quarter will be lighter than, I'd say, the following few quarters. Okay. Got it. That's helpful. Thank you. We have time to take one more question. Subash Chandra from Northland, your line is open. Please go ahead. Thank you. Thanks for fitting me in. Of course. How are you? Good, thank you. You might have obliquely referred to it, and I hopped on the call late, so you might have explicitly referred to it. That IEA report, it talks to two things, reduced supply through control of illegal mining in China, and then also perhaps tightened processing because of this revised Solid Waste Pollution Act, which seems like it's about six months old. Can you elaborate on that, and do you have an opinion if those are meaningful events to a response to that scenario that China will flood the globe with supplies? I covered this, but I think it's a great question because it's really critical to understand, I think that there's that idea of flooding. In our opinion, from what we read there, obviously anything can change. That idea of flooding is really a backward-looking thing without recognition of Chinese strategic imperatives and pronouncements. The most senior Chinese rare earth official, the head of the MIIT, refers to rare earths as industrial gold and wants the prices to reflect the environmental externalities. If you just think about it logically, I don't see how China would benefit from subsidizing an industry so that the Western world can now compete better with their dominant downstream companies, which is where the jobs and dollars and yuan are at stake, right? I just think that the world has evolved enough where the access to resources are really of such strategic value, and that they want to compete downstream, and so they don't want to destroy their environment to help Western competitors. Again, opinion. This is just based on what we read in here. I think that I take that at face value to the extent that the head rare earth regulator is saying that prices need to reflect the idea that they're rare, not that they're earth, and calls it industrial gold. I think that it's fair to think that bearish prices, particularly relative to where they are today, and frankly, on a dollars basis, are probably headed higher. That's our perspective on it. Yeah. Subhash. Yeah, I. Your question on illegal mining and the reduction there, I think one important nuance that some don't appreciate also is, when you've seen announcements about increased quotas, which I think people like to focus on those headlines. In our opinion, a significant amount of that is bringing illegal mining into the regulated fold because of exactly what Jim just laid out, China trying to clean up the environmental impact, which their country and their citizens are demanding. When people look at supply models and take the increased quotas and just add that and don't make the right adjustments to illegal mining, which admittedly is hard. By its nature, it's hard to measure. With what we've seen in the industry there, that is a lot of what's going on. I think that that is a pretty important factor in driving the supply balance in China. Okay. No, that's very helpful. We might be double counting if we don't include the illegal mines. Well- When it comes to Exactly. When you're adding to supply from increased quotas, I think the thought would be look very closely at how much of that is already contained in the market, but is illegal mining. Right. Helpful, guys. Thank you. Yeah, sure. There are no further questions, so I will now hand the call back over to James Litinsky. Okay, sure. Thank you. Well, thank you everyone for listening today. We are very proud of our execution here. I think the team did a really great job. We look forward to next quarter's updates with you, and have a great night. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.