PROFIT & LOSS

Rare earths miner MP Materials reports three-figure jump in earnings

MP Materials, the self-described largest rare earth materials producer in the Western Hemisphere, has reported solid March quarter earnings due mainly to higher rare earth prices.

 MP Materials’ Mountain Pass rare earths mine in California

MP Materials’ Mountain Pass rare earths mine in California

Adjusted EBITDA increased 537% year-on-year to US$33 million, which the company said was driven by higher sales volumes and per-unit profitability, partially offset by increased public company costs after the company started trading in New York in November.

It reported a realised price up 132% year-on-year to $5,891/t of rare earth oxide and a 13% rise in production costs to $1,475/t.

Revenue increased 189% to $60 million and adjusted net income rose 801% to $23.2 million compared with a year earlier.

The company produced 9,849t REO for the quarter from its Mountain Pass mine in California, 2% more than the previous corresponding period.

"Our solid first quarter results demonstrate our continued strong operational execution along with the upside our business has from higher rare earth prices," chairman and CEO James Litinsky said.

"Importantly, our Stage II optimisation plan is on track, and we are making steady progress on our Stage III vision."

The company, which currently sells its output to China-based circa 8% shareholder Shenghe Resources for further processing, did not provide more details on its plans to restore refining capabilities in the US.

MP Materials produced 38,503t REO in 2020, which it said was about 15% of the rare earth content consumed in the global market last year.

By comparison, ASX-listed Lynas Rare Earths said this month it currently supplied about 20% of world demand for separated rare earth products.

It produced 4,463t REO and 1,359t NdPr (neodymium and praseodymium) in the March quarter.

It has the Mt Weld mine in Western Australia, a processing plant in Malaysia and a plant under construction in WA.

Lynas also has an agreement with the US government to jointly fund the construction and development of a commercial Light Rare Earths separation plant in the US.

MP Materials last year said it had been awarded a Department of Defense grant to support detailed planning and design of a US-based Heavy Rare Earth separation facility.

It has said the construction of an HRE plant at Mountain Pass would be independent of but complementary to its stage two project.

MP shares (NYSE: MP) have risen from about $15 to peak above $51 in February.

They last traded at $27.69, valuing the company at $4.7 billion.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.