MP Materials Sees Significant Boost in NdPr Production Despite Market Challenges

MP Materials, a leading U.S.-based producer of rare earth elements, reported a substantial increase in neodymium-praseodymium (NdPr) oxide production for the second quarter of 2024. The company more than doubled its output compared to the first quarter, producing 272 metric tons (t) of NdPr oxide between April and June. Sales for this period amounted to 136t at an average price of $48 per kilogram.

This significant production boost follows the inauguration of MP Materials' separation plant in California last August, which has enabled the firm to scale up its operations. In the first quarter of the year, the company produced 131t of NdPr oxide and sold 134t, reflecting the ongoing efforts to enhance production efficiency and market reach.

Chairman and CEO James Litinsky acknowledged the operational and financial difficulties faced during the quarter, citing higher-than-anticipated upstream downtime and a persistently weak pricing environment. The rare earths market has experienced a downturn this year due to oversupply and sluggish demand, which has reversed the price rally seen in 2020-2021.

Despite these challenges, MP Materials has secured key agreements that position it for future growth. The company signed a significant NdPr supply agreement with an undisclosed global automaker and was awarded a supply contract by the U.S. Department of Defense. These agreements are expected to provide stability and enhance the firm's market presence.

MP Materials reported a net loss of $34.055 million for the second quarter, partly due to a 51% year-on-year decline in revenue to $31.3 million. Nevertheless, the company remains optimistic about reducing its refined products cost structure throughout the remainder of 2024, which could improve margins even if low prices persist.

In addition to its NdPr production, MP Materials produced a total of 9,084t of rare earth oxide (REO) in the second quarter, selling 5,839t at an average price of $4,183 per ton. This is a decline from the first quarter, where production was 11,151t and sales were 9,332t, reflecting broader market conditions.

Looking ahead, MP Materials is advancing its downstream operations with the commissioning of a prototype magnet production line at its Fort Worth facility. The company aims to start commercial NdPr metal production by the end of this year. Additionally, MP Materials has received an initial $50 million in customer prepayments for its magnetics products and anticipates around $190 million more in prepayments and tax credits by the end of 2025.