Published on 2 Apr 2024 on Zacks via Yahoo Finance
MP Materials (MP) Receives $58.5M for Rare Earth Magnet Facility
MP Materials MP announced that it received a $58.5-million award to advance the construction of its fully integrated rare earth magnet manufacturing facility. This will be the first of its kind facility in the United States, with a capacity to produce approximately 1,000 tons of Neodymium-iron-boron (NdFeB) magnets annually.MP Materials began construction on its manufacturing site in Fort Worth, TX, in April 2022. It plans to start the commercial production of precursor materials in Fort Worth in the summer of 2024 and the production of finished magnets in late 2025.The IRS and Treasury issued the Section 48C Advanced Energy Project tax credit allocation following a competitive, oversubscribed process overseen by the Department of Energy. The Department of Energy assessed the technical and commercial viability, and the environmental and community impact of approximately 250 projects.NdFeB magnets, the world's most powerful and efficient permanent magnets, are found in electric motors and generators that power hybrid and electric vehicles, robots, wind turbines, drones, electronics and key defense systems. Global demand for these magnets is projected to triple by 2035.MP will receive raw materials for the factory from Mountain Pass, CA, where it owns and runs America's only scaled and operational rare earth mine and separation facility. At the facility, NdPr oxide produced at Mountain Pass will be reduced to NdPr metal. It will then be transformed into NdFeB alloy and finished magnets, resulting in an end-to-end supply chain with integrated recycling and world-class sustainability.MP will supply these goods to General Motors GM to support North America EV production. GM is the company's primary customer.MP Materials reported an adjusted loss per share of 5 cents in fourth-quarter 2023, in line with the Zacks Consensus Estimate. The company reported an earnings per share of 39 cents in the fourth quarter of 2022. Earnings were impacted by lower prices and sales volumes in the quarter.The company generated revenues of $41 million in fourth-quarter 2023 , reflecting a year-over-year slump of 56%. The top line missed the Zacks Consensus Estimate of $47 million. This weaker-than-expected performance was due to lower volumes and realized sales prices of rare earth oxide in concentrate.
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