MP Materials (NYSE:MP) expects to begin shipping qualified magnets to General Motors in the fourth quarter and start commercial-scale production of two heavy rare earth elements, marking new steps in the company’s expansion beyond mining and processing.
The company reported third-quarter revenue plus price protection agreement, or PPA, income of $155.8 million, up 23.6% from the prior quarter. Higher neodymium-praseodymium, or NdPr, sales volumes, stronger realized prices, a one-time inventory sale and PPA income contributed to the year-over-year improvement, Chief Financial Officer Ryan Corbett said.
NdPr production rose 41% from a year earlier to 1,018 metric tons, while sales volumes increased 94% to 1,020 metric tons. The materials segment generated $141.6 million in revenue and PPA income and $47.8 million in adjusted EBITDA.
Magnet shipments to begin gradually
Founder, Chairman and CEO Jim Litinsky said MP Materials completed qualification for its magnets and plans to start shipping saleable products to GM in the fourth quarter. The company also expects to begin deliveries to Apple in 2027 as it expands its Independence facility.
Corbett cautioned that magnet sales will be modest and potentially uneven over the next several quarters. He expects volumes to increase in the second half of 2027, when Apple production should also begin contributing. Customer adoption will occur gradually as existing supplies are used and MP’s magnets are incorporated into particular programs and plants, he said.
Although magnet sales are expected to generate positive adjusted EBITDA from the outset, Corbett said the overall magnetics segment’s contribution should remain modest in 2027, particularly in the first half, as declining precursor revenue offsets the early sales ramp. The segment’s full earnings power should become visible in 2028, he said.
The magnetics segment posted third-quarter revenue of $18.6 million and adjusted EBITDA of $5.3 million. It had approximately $28 million of deferred revenue related to magnetic precursor products at quarter-end, which the company expects to recognize at a declining rate over the next several quarters.
MP’s 10X magnetics project remains on schedule for commissioning in late 2028. Litinsky said customer requests and indications of demand have exceeded its planned capacity, which he described as fully contracted.
Heavy rare earth production advances
MP Materials expects commercial-scale production of dysprosium and terbium to begin in the fourth quarter. The output is primarily intended to support magnets made at Independence, including those for electric vehicle traction motors.
Founder and Chief Operating Officer Michael Rosenthal said the first heavy rare earth separation circuits had begun operating and that process and equipment performance met expectations. He cautioned that separation circuits can face unexpected challenges and that minor disruptions can have multiweek effects.
During the third quarter, MP sold a portion of its stockpiled SEG+ material to a strategic customer amid supply constraints. The company retained several hundred tons of feedstock for future production, Litinsky said. Corbett characterized the transaction as a one-off sale and said the material was sold for a use unrelated to magnets.
Rosenthal said the separation process also produces intermediate streams that have attracted customer interest. Projects to produce samarium and gadolinium remain on track for initial production in the first half of 2028. While prices for several medium and heavy rare earth products are unusually strong, he said the company does not expect those elevated levels to persist indefinitely.
Production and spending outlook
For the fourth quarter, MP expects NdPr oxide sales volumes of approximately 1,000 metric tons and realized prices of about $100 per kilogram, broadly consistent with the third quarter. At that price and expected product mix, Corbett said the company anticipates roughly $8 per kilogram of PPA income on sold NdPr.
Rosenthal said the company operated at a rate above 450 metric tons per month for portions of the third quarter, though further optimization and debottlenecking are needed to sustain that pace. He expects an annual production rate above 5,000 tons in 2027, with some additional downtime as projects are commissioned.
One of those projects is the Chlor-Alkali facility, whose first phase is expected to start in the first quarter of 2027. Management expects the project to improve supply resilience and help reduce costs, though Corbett cautioned that startup could create some unevenness early in the year.
Year-to-date capital expenditures totaled $413.8 million, approximately 60% of which was related to magnetics. MP maintained its full-year spending outlook of $500 million to $600 million and ended the quarter with $1.34 billion in cash equivalents and short-term investments.
Asked about potential share buybacks, Litinsky did not outline a specific action. He emphasized the importance of preserving balance-sheet strength and said the company would continue to be opportunistic.
About MP Materials (NYSE:MP)
MP Materials Corp. is a rare earth materials company focused on restoring and expanding a fully integrated rare earth supply chain in the United States. The company owns and operates the Mountain Pass rare earth mine and processing facility in California, one of the largest rare earth production sites in the Western Hemisphere.
MP Materials primarily produces rare earth concentrate containing neodymium and praseodymium, elements used in high-strength permanent magnets. These magnets are important components in electric vehicles, wind turbines, robotics, defense systems, and other advanced technologies.
