MP Materials (MP) Status Update summary

Landmark public-private partnership announcement

• Announced a transformative, multi-billion dollar partnership with the Department of Defense to accelerate U.S. rare earth supply chain independence, including a $400 million DOD investment in convertible preferred equity, a $150 million loan for heavy rare earth separation, and a 10-year NdPr price floor at $110/kg.

• DOD receives convertible preferred equity, a 10-year warrant, and a 12-year loan at a fixed rate, with the partnership structured for aligned incentives, shared upside, and the potential for DOD to become the largest shareholder with up to 15% ownership.

• MP will build a new 10x magnet manufacturing facility targeting 10,000 metric tons annual capacity by 2028, with DOD making a 100% offtake commitment for 10 years and a $140 million annual EBITDA guarantee with a 2% escalator.

• The partnership provides long-term financial visibility, reinforces MP's role as a national champion, and is designed to catalyze the broader U.S. magnetics industry and supply chain independence.

• Secured $1 billion in financing commitments from JPMorgan Chase and Goldman Sachs for the new 10X magnet manufacturing facility.

Strategic and operational implications

• The agreement secures foundational capabilities in upstream beneficiation, midstream refining, and downstream magnet manufacturing, enabling full vertical integration and consolidating extraction, separation, and refining in one U.S. location.

• The 10x facility's offtake agreement allows for syndication to commercial customers after DOD needs are met, supporting both defense and commercial sectors.

• Expansion plans include growing the Independence Facility to 3,000 tons and leveraging Mountain Pass as a refiner of choice for the Western world, with collaboration on sourcing heavy rare earth feedstock.

• The partnership supports recycling and third-party feed integration, enhancing supply chain resilience and enabling broader industry participation.

• The Texas magnetics facility, Independence, anchors downstream capabilities.

Financial structure, cash flow, and shareholder impact

• NdPr price floor mechanism ensures stable and predictable cash flow, with DOD covering the difference if market prices fall below $110/kg, and shared upside mechanisms for both NdPr pricing and magnet facility EBITDA.

• DoD receives 30% of upside above $110/kg NdPr price after the 10X facility reaches target capacity for 10 years, and is entitled to the first $30M of EBITDA above $140M, and 50% of EBITDA above $170M from the 10X facility.

• MP expects pro forma annual EBITDA to exceed $650 million, with significant upside potential from NdPr pricing and expanded production; at $60/kg NdPr, price floor payments could result in $410M EBITDA, and at $110/kg, $790M EBITDA is possible.

• The DOD is a passive economic stakeholder with no operational control, allowing MP to maintain opportunistic capital allocation and shareholder-focused strategies, with no restrictions on shareholder returns, dividends, or buybacks.

• MP will no longer sell into the Chinese market, and existing distribution relationships will be adjusted accordingly.