Table of Contents

• The China Ban
• MP Materials is Set to Benefit from the China Export Ban
• MP Materials Financials and Performance
• MP Materials Stock is UP

The China Ban

MP Materials Corp., a leader in the Western Hemisphere's production of rare earth materials, is poised to benefit from China's recent export ban of critical processing equipment and technology relating rare-earth materials and permanent magnets.

With the recent move on the ban on export of technology to make rare-earth magnets, China is extending their list of bans related to rare-earth minerals. According to the Reuters' report, China already has a ban in place limiting foreign access on technology to extract and separate critical minerals.

MP Materials is Set to Benefit from the China Export Ban

As tensions between China and the US continue to affect the rare-earth manufacturing and processing market, the recent ban on export of technology to manufacture rare-earth magnets presents an opportunity for MP Materials to capitalize with their Mountain Pass mining and processing facility and Fort Worth manufacturing facility.

According to MP's Q3 earnings report, the company produced 50 Metric Tons of NdPr in Q3 2023. The company has not disclosed any sales-related transactions yet. This is the first time in history MP Materials has produced NdPr rare-earths which are essential ingredients to manufacture permannet magnets.

MP Materials owns and operates the Mountain Pass Rare Earth Mine and Processing Facility and is also constructing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas, where the Company anticipates manufacturing, among other products, neodymium-iron-boron (“NdFeB”) permanent magnets. The company began producing separated rare earth products in Q3 2023 and plans on selling these products to the US, Japan and other countries beginning Q4 2023. At the time of this writing, MP Materials should have begun selling their manufactuerd products.

With its prominent Mountain Pass facility, MP Materials is the only active mining and processing site of scale for rare earth materials in North America, positioning it to respond to any shocks relating from the ban. The company's existing infrastructure and technology could become increasingly valuable as the market seeks alternatives to Chinese processed rare earths.

MP Materials writes in their mission statement, "The fulfillment of our Mission will set the foundation for a renewed, self-sufficient, and resilient American rare earth industry amidst the backdrop of a generational industrial renaissance towards electrification and decarbonization."

MP Materials Financials and Performance

With a 3.9X revenue growth from $134 million in FY 2020 to $527 million in 2022, MP Materaisl has significantly expanded their operations. The company also has Property Plan & Equipment exceeding $930 million and current assets exceeding $1.2 billion. Financially, MP Materials seems well-equipped to seize this opportunity. With a healthy balance sheet and sizable PPE, MP materials is set to capitalize on opportunities that are set to arise in the future.

MP Materials' main revenue sources until Q3 2023 were Rare-earth Oxides the company sold to their Chinese affiliates Shenghe Resources.

MP Materials Stock is UP

The market has responded positively to the news of China export ban by rewarding MP Materials Stock. The company's stock has increased more than 10% since the announcement of China's export ban. This increase in stock value could be an indicator of the market's anticipation of MP Materials' potential to grow revenues and market share, as dependency on non-Chinese sources of processed rare earths escalates. The company's unique status in North America, robust financial standing as evidenced by its latest 10-K filing, and positive market movements collectively signal MP Materials' strengthened stance in a shifting geopolitical landscape.

Disclosure: We do not hold MP Stock. This is not a financial advice.