Good afternoon, and welcome to the first day of JP Morgan's Energy, Power, Renewables Conference. My name is Bill Peterson, U.S. Clean Tech and Metals and Mining Analyst, and we're pleased to have the team from MP Materials here. Jim Litinsky, the CEO, we're gonna do a fireside chat. If there's any questions, this is being webcast, so I ask you to wait for the microphone, and we'll get your questions in. Jim, thanks for supporting the conference. This is my second time hosting you here. Yeah. The same spot. Thanks. I think we're in the same room, right? Same room, same spot, I think. Great. In fact. I guess for those new to the story, maybe you could start off with an overview of the business, you know, how the assets have been transformed from when they were first purchased and the expansions further downstream, you know, since starting. Sure. So we make rare earth materials. The way the reason they're relevant is they're into high-powered magnets that feed into the electrified motion supply chain. The business, you can think of it in three stages. We took over these assets. I bought Mountain Pass out of bankruptcy in 2017. When my team and I, my co-founder Michael and I, took over the site, it had eight employees. It was in care and maintenance. There were a lot of questions around the predecessor and whether it could be operated ever economically. We took over the site in 2017, we relaunched it, built the company. We grew from eight people to what we are, 730 today. In doing that, we took it public in 2020. In doing that, we set about a three-stage plan. And I'll try to keep this quick 'cause I know most of the people in the audience know this story, but stage one is producing a rare earth concentrate product. Stage two is a refined rare earth product, specifically NdPr oxide, being the primary one. And then, the third and final stage is magnetics. The reason magnetics and the stages two and three are important is because you know, as you may have heard me say, Bill, we could have all the rare earths in the world, in the U.S. or in the Western world or anywhere, but if you can't make the end product, the magnet that is for the use case, then ultimately, you're supply chain reliant on a single source in China. So we set about a multi-stage plan. We have been producing consistently north of 40,000 tons at Mountain Pass. That's our stage one concentrate product. Last year, we started refining, and so now we're in the process of ramping up the refining capability at Mountain Pass. And then the third stage is Fort Worth. We're building a magnetics facility. We built a magnetics facility. We broke ground two years ago. We said on the last call that we'll be making metal in that facility this year. We expect, as we continue to execute, that our magnetics business will actually be EBITDA positive this year, which we're very proud of. And so once we are making magnets at scale, we'll have really completed the full supply chain and have restored that supply chain to the United States of America, so we're very proud of that. Yeah, thanks for the overview. You know, I think a number of the questions that we get are about the end market, the health of the end markets in terms of near-term demand. So it's kind of a question we always try to ask either in the call or the callbacks, but, you know, what are the, how are the markets trending this year? What's strong, what's weak? I guess, especially as it relates to China, and then if we think about sort of legacy applications versus more energy transition, EVs, you know, wind, and so forth. Yeah. Certainly, rare earths are in the bucket of critical materials, which we've seen a pretty brutal bear market in the last sort of six to nine months out there. So we're certainly in that bucket of areas, whether it's lithium or nickel, copper, cobalt that have had substantial bear markets. Our market is a little bit unique relative to some of the other use cases, in the sense that we really do have a variety. We are not just sort of a play on EVs. When we think about the rare earth space, specifically, about 25% of the end demand is, you know, think of it as EV mobility, electrified motion that way. The other 75%, are sort of other use cases that are somewhat GDP. Some are faster-growing, some are not, such as HVAC, wind turbines, industrial motors, disk drives, or a variety of other things. And so what we've seen in our space, there was obviously a lot of excitement a couple of years ago about the pace of EV penetration, and, you know, that, I think, earlier part of this year, we've seen, obviously pull back around the market. And so but I think what we've seen is that, that other 75%, whether it's wind or some of the, you know, HVAC, with, with some of the pullback in China, some of those use cases, small moves in demand there can trump dramatic growth in the short term against electrified motion, which is sort of a quarter of it going to, compounding at, say, 30%. What's interesting, though, and one distinct thing that I wanna distinguish is that, as we've seen this year, the challenge with electrification, with EVs, is that people have a lot of range anxiety. So we've seen... You know, people are like: "Yeah, I want an EV, but I still don't have -- there's not enough charging stations or." And so we've really seen this year, as EVs have pulled back, at least relative to street expectations, hybrids have gone gangbusters. You know, sales year-over-year are up enormously. And actually, the thing about a hybrid is there's typically kind of roughly 90+% market share for a rare earth magnet in EVs. Hybrids are the same, if not higher, because even though it is an internal combustion engine, it also has an electric motor and size, weight and efficiency are that much more important. So, the rough rule of thumb is that a hybrid will typically utilize 2/3 of the incremental rare earth content or NdPr content that an EV would use. So to the extent that this, we're on sort of a new path as far as the transition to EVs, that involves much more hybrids, that should be still good for us. It's not as good as EVs, but it certainly is not, you know, as, as sort of existential as it might be for some of the other commodities. Yeah, thanks for that color. So then flipping to supply, you know, you guys have, obviously, a unique foothold in the Western hemisphere, but I guess there's a lot more concerns about the China sort of supply spigot, government quotas, and moreover, there's also, of course, mining in sort of less environmentally friendly sources. So I guess, you know, first of all, what are your thoughts on this overall supply situation? And then we can kinda go from there. Yeah. So there's really four major players in our space. 80% of the industry is China, or a little over 80%, and that is essentially two Chinese super majors. There's China Northern and then China Rare Earth Group, which is China Southern. And then there's us and Lynas, which is a public company in Australia. And so those are the four major players. Any other supply is, frankly, uneconomic at this. You see some public companies out there, you know, some penny stocks talking about incremental supply. That's very challenged at these prices. And so really, the supply is sort of what can China do? And we can certainly talk about incremental supply that we wanna bring on. But what can China do? In this year, at least, we're seeing kinda quotas are flat. We're not seeing much incremental supply, but I think there's sort of a bigger backdrop that I think can contextualize our view about sort of Chinese supply over the coming years. And it's always hard to read the tea leaves on China because to the extent that a government wants to increase supply in a non-economic way, they can certainly do that, right? A government can lose money indefinitely. We are quite convinced, and we've said this on our last couple of calls, that at these prices the Chinese are most certainly losing money. And what has happened in this space, though, and I think it combines with headlines around... In recent months, we've seen the rise of BYD, XPeng, Li, NIO. There's some incredible products coming around the world from the Chinese manufacturers, and so the Chinese are now the largest EV exporter in the world. The upstream, historically, was utilized by the Chinese in a variety of ways, but to sort of dominate that downstream. As they become larger producers globally, the question is: to what extent do they want to increase supply to subsidize their competition around the world? It's one thing for the Chinese to subsidize, say, Tesla in Shanghai. It's another thing to subsidize Tesla making a product in the U.S. or in Europe. And so our view of it has always been that, what we've seen over the last couple of years as the Chinese OEMs have risen to sort of displace some of the Western OEMs, is that you will see the quota increases and the supply increases commensurate with their growth of their supply chain, as well as of their producers around the world and their supply chain within China, but that they're not going to subsidize the Western competition. And I'll add on one thing, and it actually touches on demand, and, you know, it's sort of longer dated, so I hesitate to mention, but I think it's actually really relevant, as we think about both supply and demand and this concept of sort of what China's gonna do. Xi came out recently and said that China expects to dominate the humanoid robotics production, mass production, by 2025. They expect to be mass producing humanoid robotics. For those who are watching the Tesla annual, there were a lot of headlines last week about Tesla now expects to be a $25-$30 trillion company centered around robotics. And, you know, there was an estimate that there'd be 10-20 billion humanoid robotics some point over the next decade, and maybe they could have 10% share or something like that. A robot is essentially, you know, an EV, as we say, is a robot with wheels. It has a big battery and a small magnet. A robot, a humanoid robot, has a small battery and a lot of magnet, magnetic content. We estimate, and obviously, this is unknown, you know, there's a number of fascinating products in China, there's obviously Tesla and a few here, and this is sort of the cutting edge of AI right now. But typically two to three times the magnetic content. And so when we think about the growth of robotics, you know, if you were to completely eliminate, just completely eliminate every demand case, so assume the rest of the world demand for EVs, hybrids, wind turbines, drones, HVAC, everything was zero, the entire NdPr market today could probably produce somewhere around 50 million robots, certainly not the 10-20 billion that are being talked about. So if you believe a tenth of that market cap potential, then certainly there's going to be an enormous new bull run, around the need for incremental supply, in NdPr. And, so I think that actually, you know, my view of this is obviously, that is a number of years down the line. But certainly, you know, what we start to realize is, as we think about this AI revolution, to some degree, obviously, it's much larger, more impactful, and you know, bigger in a much more pervasive way, but the, the frenzy around AI today is somewhat what we saw in 2021 around electrification. You're seeing parabolic stock charts, you know, now it's NVIDIA and Broadcom, you know, then it was Tesla and Rivian, et cetera. As we start to see those parabolas, you know, if there's $1 trillion that's gonna be spent on GPUs and, and data centers, and all these use cases, there's going to need to be ROI, right? We're going to need to see revenue outside of just some incremental spend on, on, you know, in Microsoft, or a subscription to OpenAI. There's gonna need to be use cases. And so, you know, our belief, my belief, is that, humanoid robotics, AI-driven robotics, is going to be the key, one of those key exciting ROI use cases, from AI, and I think it's actually gonna happen a lot sooner, than people think. And so even if that is three to five years out, I think that will start to-- the supply chains and the need will start to be recognized and developed. And so I think that that is a huge source of incremental demand that is gonna come, that is gonna be a step function change for us vis-à-vis the other materials, certainly. But it also relates to this idea of sort of Chinese supply. And as the Chinese see this, and Xi is out making these statements, it certainly makes a lot less sense to subsidize the Western competitors, particularly when you see an enormous need for upstream three to five years, and they are certainly longer term planners than most of us here. And so I think you're going to see, and I don't know if it's two days or two years, but I do think you're gonna see another inflection point of perspective around demand in our space. Makes sense. I'm gonna pivot over to, you know, the various operations and how you're gonna address, you know, what looks like maybe supply challenges in the future. So I guess, first off, given the current price environment and the stage to operations still working through, you know, improving efficiency and so forth, how should we think about the margin benefit of staying focused on REO concentrate sales near term, this stage one, versus, you know, pursuing larger outputs at stage two? Sure. And I think you're referencing as we think about our ramp. Yep. So I think it's really important to just stepping back for those who are a little less familiar, going back to that sort of stage one and two. So the thing about rare earths is unlike sort of a typical mining, you know, operation, you don't just sort of mine it and kind of do a little quick little process to it and sell it. You mine it, and then the process down the way is extensive. It really is closer to think of it as like a, I guess, a friendlier version of oil refining, right? At Mountain Pass, we have north of a 6% rare earth ore body. In China, they're typically 1%-2%. That concentration makes it so that when you concentrate, it's actually much more economic to concentrate something that's 6% than 1%. And so in that first stage, we actually generate an enormous amount of gross profit in that first stage, just by concentrating, and that's a pretty extensive process, but because we're a co-located site where we're concentrating right at the mine, there's a big amount of profit. As we move to the next stage, where you're taking a concentrated product into a refined product, the key inputs there are, you know, to go from that step to the next step, are mainly energy, reagent, and labor. Those are steps where, you know, vis-à-vis China, we're certainly less competitive than we are in that first step. But there's enough because we are so economic at scale in that first step, and because, you know, because we can move downstream and do this at our site, there's enough of a total dollar uplift for that to be an economically exciting opportunity for us in a normalized pricing environment. And so what we said was that in this environment where you see the whole industry basically breaking even or losing money, that obviously adding costs to go from one to two, there's not a lot of uplift, right? But so, so going from one to two, what we wanna do is be very thoughtful. We're not gonna just ramp to the extreme. If prices were at $150, we'd wanna just ramp to the extreme, because even if we are off by half, it's still—there's so much dollars to do that refining step that you just kind of do it as quickly as you can. In a tighter environment, we wanna maximize the benefit that we have of that extremely profitable first step, so that we can kind of get our cost structure down and ramp up, you know, methodically. Now, this is sort of at the margin in the practical scheme of things. You know, we wanna get that cost structure down as quickly as we possibly can. And from what we've seen, you know, from last year as we've started refining, we feel very good about the business. We feel very good about what we've built and our ability to get normalized and get our cost structure to where we expected it to be, adjusted for, in, you know, since we go back to when we went public, certainly labor costs are higher, energy costs are higher, and et cetera. There's been inflation, but other than sort of standard inflation, we feel very good about the model that we've laid out. But we wanna be methodical because we are in this tough pricing environment, and certainly, you know, we're not getting credit for any of that. And I think that, you know, to the extent that NdPr prices remain here, you know, everything is, is pretty much noise, or other than sort of the, the pricing phenomenon, because there is so much leverage to the up when prices go back up. And so our goal is to obviously just position ourselves for the maximum of upside leverage- Yeah. when that comes. I'm gonna pause here. Before moving on to the various other stages, I just wanna see if anybody has any questions. Just wait for the microphone, please. Great. Thank you. So lots of politics going on. Without getting too political, do you feel that- ... you know, a Trump administration or Biden administration would see the- you're hearing more and more about these humanoids. Who has a better view of you wanna hold some of this market and keep it in your own structure in the United States? Sure. What, what do you think, and how might they help you to offset some of the costs that we're finding here? So great question. I think I love answering this one because the good thing is our industry is probably about as bipartisan as it gets, right? There are when we think about the handful of things that there are strategic competition globally, if not, you know, worse, you often hear of things like semiconductors, AI, and on that list of, you know, five things are rare earths because of the fact that, you know, what we do is so critical for downstream military applications, too, as well as commercial national security around, you know, our major industries. Both administrations, we wanted, you know, we have had programs where we've had benefit from DoD under both the first Trump administration and now the Biden administration. In fact, we had a $35 million award from DoD that the President of the United States himself announced. You can, you know, find that on, on YouTube, from a couple of years ago. We will certainly benefit from provisions of the IRA, whether it's 45X. We just won $58.5 million from 48C, which is a tax credit for our facility in Fort Worth. I think both administrations, where whoever wins, will want to support our industry particularly, and maybe for different reasons. Certainly, I think on the left, there's probably, you know, a bit more appreciation for the environmental attributes, and on the right, there's more appreciation for the national security attributes and supply chain. But both, I think, agree on all. I do also think, and I go back to this concept around robotics, because I think it's one of those themes that will happen much sooner than people think and take people by enormous surprise, and we're seeing it all over the place in company formation. And because, again, this—for this AI boom to take on more significance, there need to be, you know, there needs to be some evolution. And EV is one thing, but when we start thinking about robots in our, you know, our homes, our restaurants, our factories, the national security aspects of that are that much more powerful. And so the practical reality is we have lost a lot of the war with respect to EVs. Like, the Chinese make great products. They're there, they'll be competing globally, and they'll win a lot, and they'll lead in many respects, in, you know, some areas. Humanoid robotics is extraordinarily impactful, more impactful from a military and national security standpoint, and the playbook is still completely unwritten, right? Will it be Chinese-led, will it be U.S.-led? And so we got to get that one right. And so I think, yeah, sure, certainly in this election season and, and as we come out of it, I hope, just I say this as an American, not the CEO of MP, but I hope that, we, you know, get smart real fast and start to long-term plan, because that is certainly an industry that we can not only lead from a technology software standpoint, but from a manufacturing standpoint, all the way up the supply chain. But the clock is ticking, and so I think we're a critical component to that. Hopefully, there'll be other companies, a lot of other companies and more, you know, bigger ones downstream, et cetera. But she has already come out and said that the Chinese expect to lead in this, and so, you know, we better, we better lead on that really quickly. I don't think, though, to answer your question directly, you know, this election, will, you know, either outcome will be, you know, will be great for MP. You can... You know, whatever political badge you have, then you can, you can, pick whether there's a good outcome or not. Any other questions? Okay, maybe moving on to, you know, you've spoken in the past to the, the Upstream 60K initiative, which, you know, I think it's gonna be more of longer dated over the next four years, which may be fine under the current pricing regime. But I guess, what are the key milestones to look out for? You know, what's the appetite to convert this to oxide? And I guess, what would be the implications for the, you know, in terms of Mountain Pass's reserves? Yeah. So quick background, Upstream 60K. Consistently over the last four years since we've been public, we've said to people, like, you know, we have sort of a niche industry here, and so I think that people, they see a lot of headlines around rare earth projects and like, "Oh, there's a discovery here. We discovered $10 billion of rare earths," and you kind of look a little bit deeper and it's actually, it's like 0.1%, so the $10 billion would cost you, like, $50 billion to produce if you ever could. And so, there's a lot of headlines about supply, but then actually getting that supply, getting it to be either concentrated or refined economically is extraordinarily hard, time-consuming, capital intensive, human capital intensive. And so what we've consistently said is the nearest term, highest return on capital, lowest risk source of incremental supply in the Western world would be expansion in Mountain Pass. And so we've been driving that since inception, and we've, you know, obviously got pushed repeatedly to quantify that. And we've been very thoughtful, I think, and hopefully conservative in sort of how we conveyed that. And we recently came out a few quarters ago and said, as a result of all of the work that we've been working on, and this is a variety of projects, this is not one project, but this is a variety of projects. We believe that we have the potential to expand output at Mountain Pass from roughly 40,000-ton REO run rate to 60,000. So a 50% increase, with somewhere in the order of $200 million of capital. This is a variety of projects, and what I would tell you is we're already seeing significant progress. We have physical items that have been built in place that are underway. I think you should expect to see some incremental gain over the next year or two, but the vast majority will be back-weighted, both as far as incremental output from, you know, that 40 on the way to the 60. You will see much more towards year three and four, and the capital spend will be much more towards the end. But it's not like it's one project where it's sort of binary, and it kind of start now and finish four years later, spend X, or did you get that wrong? These are a number of projects, so given the diversity aspect of it, we feel good that, you know, even if we're wrong about some parts, maybe some parts will be a little better. And, you know, at a minimum, we should make material progress towards that, but hopefully, we can hit or exceed that. And that, if you think about it, I mean, just to put the perspective on it, let's put some hard numbers on this. Just, we're all investors in this room. I guess I'm one as a CEO, I used to be one, full-time. But a couple of years ago, when we were sort of in the prior, you know, excitement over the fact that the world could electrify and NdPr prices were more normalized, we did approximately $400 million of adjusted EBITDA. In that sort of excitement, we had a $10 billion enterprise value, with the expectation we'd move downstream into magnetics, and, you know, we'd refine, move downstream into magnetics, and prices would, would go up, commensurate with the demand that, that people see. Fast-forward a couple of years, prices have collapsed. Obviously, our, our profitability has collapsed. But what we've now come out and told you is, we believe, again, we have to execute this, but over the next three or four years, we can increase our potential output by 50%. We've been refining for a year now, and obviously, our, our ramp is imperfect, but very good, and we, we feel, you know, very good that we'll execute on what we said that we would execute on. We've got a magnetics facility that is built, that will be EBITDA positive this year. And we can talk more about all of the good things that we've said as far as sources and uses, and we have, you know, a little over $2 billion market cap, and we have, you know, basically no net debt. We have $1 billion of cash, $1 billion of debt. And so when we think about that $10 billion of enterprise value, you know, on the expectation, but then increase the potential output by 50% and then realize that that can then be downstream refined and inflation-adjust all that, you can see that the pendulum has just really swung to the extreme, in the negative. And really just doesn't give us credit for, the refining and the magnetics that we've done, and those are not, you know, cash burns. Those are eventually in the short-term benefits plus. So, so anyway, that's a long-winded way of saying that we think that we can bring on incremental supply, it can create a lot of value, and who knows when this cycle, sort of the pendulum, goes the other way. But I do think the pendulum will go the other way very quickly. Hopefully, it'll be around, you know, robotics or something great we're doing in the U.S., with respect to that. But, but that's the dynamic around Upstream 60K. Yeah. I want to just pause again and see if there's any last questions before asking my sort of set of last questions. All right, would like to get to capital allocation. We don't have a lot of time- Yeah. But I guess, can you update us where we are in stage three, equipment set up, offtake, how the economics look, just any, you know, key takeaways? It's something we don't get as many questions on. Yeah. but it's going to become more relevant. Yeah in the not-too-distant future. Yeah, and, you know, maybe we'll have to, we'll have to have some kind of, visit to, to show off a little bit, in Fort Worth. You can kind of see in our, in our decks or on, on X, we, you know, we'll put out a picture occasionally. But that facility is built. We broke ground. We're really proud of it. We built an incredible team in Fort Worth. We broke ground on it two years ago. We're in the building now. It's a 250,000 sq ft facility. We've got an R&D center, where we're, you know, we've got an incredible team. And we've said, we said on the last call, we'd be making metal there this year, and we'd be EBITDA positive there. So to think about two years after breaking ground and being EBITDA positive, again, we've got to execute, so I wanna caveat that. But you know, it's an incredible achievement and, you know, there's currently no debt on that facility. We equitized it all. We said... You know, we talked about sources and uses over the remainder of the year, a call ago, so I'll reference you all to that. But you know, we, on the last call, we said that this quarter, we expected to get a customer advance, a $50 million customer advance this quarter. So you'll, on the next call, you should assume that we'll, you know, follow through on all the details around that. And so we feel very good about the sources and uses, with respect to that facility and our ability to continue to maintain and grow our fortress balance sheet. And so we essentially get no credit for that business, and I think it is certainly politically and militarily strategic, for the country. And, you know, given the structure of the business, you know, we've said historically that we would view that business as an independent business, that any material that went into it, we would consider the cost of that at market. We wouldn't rob Peter to pay Paul. And so the economics of that business need to make sense. And so, you know, we've invested quite a bit of capital in that business, and now I think, you know, we will start to see us reap the benefits of that, and if it's at some point, we'll get some credit for it. Well, I'm sure we can discuss for 30 more minutes- Yeah. But unfortunately, we have run out of time, Jim, but thanks for sharing your insights, and we'll look forward to following the progress. Thank you so much.