COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39277 | |
Entity Registrant Name | MP Materials Corp. / DE | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-4465489 | |
Entity Address, Address Line One | 1700 S. Pavilion Center Drive, Suite 800 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89135 | |
City Area Code | 702 | |
Local Phone Number | 844-6111 | |
Title of 12(b) Security | Common Stock, par value of $0.0001 per share | |
Trading Symbol | MP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 165,316,817 | |
Amendment Flag | false | |
Entity Central Index Key | 0001801368 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 296,468 | $ 263,351 |
Short-term investments | 650,299 | 734,493 |
Total cash, cash equivalents and short-term investments | 946,767 | 997,844 |
Accounts receivable, net of allowance for credit losses of $0 and $0, respectively (including related party) | 21,600 | 10,029 |
Inventories | 108,509 | 95,182 |
Government grant receivable | 19,302 | 19,302 |
Prepaid expenses and other current assets | 10,021 | 8,820 |
Total current assets | 1,106,199 | 1,131,177 |
Non-current assets | ||
Property, plant and equipment, net | 1,196,486 | 1,158,054 |
Operating lease right-of-use assets | 9,705 | 10,065 |
Inventories | 14,531 | 13,350 |
Equity method investment | 9,647 | 9,673 |
Intangible assets, net | 8,582 | 8,881 |
Other non-current assets | 8,889 | 5,252 |
Total non-current assets | 1,247,840 | 1,205,275 |
Total assets | 2,354,039 | 2,336,452 |
Current liabilities | ||
Accounts and construction payable | 26,139 | 27,995 |
Accrued liabilities | 73,987 | 73,939 |
Other current liabilities | 7,420 | 6,616 |
Total current liabilities | 107,546 | 108,550 |
Non-current liabilities | ||
Asset retirement obligations | 5,576 | 5,518 |
Environmental obligations | 16,532 | 16,545 |
Long-term debt, net | 935,585 | 681,980 |
Operating lease liabilities | 6,573 | 6,829 |
Deferred government grant | 18,349 | 17,433 |
Deferred income taxes | 121,877 | 130,793 |
Other non-current liabilities | 4,247 | 3,025 |
Total non-current liabilities | 1,108,739 | 862,123 |
Total liabilities | 1,216,285 | 970,673 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Preferred stock ($0.0001 par value, 50,000,000 shares authorized, none issued and outstanding in either period) | 0 | 0 |
Common stock ($0.0001 par value, 450,000,000 shares authorized, $178,319,495 and $178,082,383 shares issued, and 165,307,107 and 178,082,383 shares outstanding, as of March 31, 2024, and December 31, 2023, respectively) | 18 | 17 |
Additional paid-in capital | 938,209 | 979,891 |
Retained earnings | 402,215 | 385,726 |
Accumulated other comprehensive income (loss) | (130) | 145 |
Treasury stock, at cost, 13,012,388 and 0 shares, respectively | (202,558) | 0 |
Total stockholders’ equity | 1,137,754 | 1,365,779 |
Total liabilities and stockholders’ equity | $ 2,354,039 | $ 2,336,452 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 0 | $ 0 |
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred shares, outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, issued (in shares) | 178,319,495 | 178,082,383 |
Common stock, outstanding (in shares) | 165,307,107 | 178,082,383 |
Treasury stock (in shares) | 13,012,388 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total revenue | $ 48,684 | $ 95,700 |
Operating costs and expenses: | ||
Cost of sales (excluding depreciation, depletion and amortization) (including related party) | 35,594 | 24,216 |
Selling, general and administrative | 21,267 | 19,403 |
Depreciation, depletion and amortization | 18,385 | 8,122 |
Start-up costs | 1,287 | 4,669 |
Advanced projects and development | 4,206 | 3,611 |
Other operating costs and expenses | 377 | 2,717 |
Total operating costs and expenses | 81,116 | 62,738 |
Operating income (loss) | (32,432) | 32,962 |
Interest expense, net | (2,857) | (1,359) |
Gain on early extinguishment of debt | 46,265 | 0 |
Other income, net | 12,657 | 13,693 |
Income before income taxes | 23,633 | 45,296 |
Income tax expense | (7,144) | (7,849) |
Net income | $ 16,489 | $ 37,447 |
Earnings (loss) per share: | ||
Basic EPS (in USD per share) | $ 0.09 | $ 0.21 |
Diluted (in USD per share) | $ (0.08) | $ 0.20 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 174,556,850 | 176,881,723 |
Diluted (in shares) | 186,791,826 | 193,613,539 |
Rare earth concentrate (including related party) | ||
Total revenue | $ 40,076 | $ 95,666 |
Other rare earth products | ||
Total revenue | 281 | 34 |
NdPr oxide and metal (including related party) | ||
Total revenue | $ 8,327 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,489 | $ 37,447 |
Other comprehensive loss, net of tax: | ||
Change in net unrealized losses on available-for-sale securities | (275) | (58) |
Total comprehensive income | $ 16,214 | $ 37,389 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock, Common |
Beginning balance (in shares) at Dec. 31, 2022 | 0 | 177,706,608 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,312,634 | $ 0 | $ 18 | $ 951,008 | $ 361,419 | $ 189 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation (in shares) | 98,418 | ||||||
Stock-based compensation | 7,758 | (7,758) | |||||
Shares used to settle payroll tax withholding (in shares) | (185,221) | ||||||
Shares used to settle payroll tax withholding | (5,976) | $ 1 | (5,975) | ||||
Stock Issued During Period, Value, Issued for Services | 0 | ||||||
Net income | 37,447 | 37,447 | |||||
Unrealized gains (losses) on available-for-sale securities | (58) | (58) | |||||
Ending balance (in shares) at Mar. 31, 2023 | 0 | 177,619,805 | |||||
Ending balance at Mar. 31, 2023 | 1,351,805 | $ 0 | $ 17 | 952,791 | 398,866 | 131 | 0 |
Beginning balance (in shares) at Dec. 31, 2023 | 0 | 178,082,383 | |||||
Beginning balance at Dec. 31, 2023 | 1,365,779 | $ 0 | $ 17 | 979,891 | 385,726 | 145 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation (in shares) | 234,763 | ||||||
Stock-based compensation | 7,803 | 7,802 | |||||
Shares used to settle payroll tax withholding (in shares) | (238,314) | ||||||
Shares used to settle payroll tax withholding | $ (3,950) | (3,950) | |||||
Treasury Stock, Common, Shares | (13,000,000) | (13,012,388) | |||||
Treasury Stock, Value, Acquired, Cost Method | $ 202,558 | 202,558 | |||||
Stock Issued During Period, Value, Issued for Services | 3,737 | 3,737 | |||||
Stock Issued During Period, Shares, Issued for Services | 240,663 | ||||||
Capped Call Transaction Cost | 49,271 | 49,271 | |||||
Net income | 16,489 | 16,489 | |||||
Unrealized gains (losses) on available-for-sale securities | (275) | (275) | |||||
Ending balance (in shares) at Mar. 31, 2024 | 0 | 165,307,107 | |||||
Ending balance at Mar. 31, 2024 | $ 1,137,754 | $ 0 | $ 18 | $ 938,209 | $ 402,215 | $ (130) | $ 202,558 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | $ 1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net income | $ 16,489 | $ 37,447 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, depletion and amortization | 18,385 | 8,122 |
Accretion of asset retirement and environmental obligations | 231 | 227 |
Accretion of discount on short-term investments | (8,493) | (8,842) |
Gain on early extinguishment of debt | 46,265 | 0 |
Loss (gain) on disposals of long-lived assets, net | 45 | (5) |
Stock-based compensation expense | 7,467 | 7,013 |
Amortization of debt issuance costs | 913 | 882 |
Lower of cost or net realizable value reserve | 5,991 | 0 |
Deferred income taxes | 7,144 | 7,377 |
Decrease (increase) in operating assets: | ||
Accounts receivable (including related party) | (11,571) | 11,611 |
Inventories | (20,943) | (5,024) |
Government grant receivable | (1,617) | 0 |
Prepaid expenses, other current and non-current assets | (3,243) | 123 |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued liabilities | (7,633) | (3,586) |
Deferred government grant | 1,489 | 0 |
Other current and non-current liabilities | 485 | 146 |
Net cash provided by (used in) operating activities | (41,126) | 55,491 |
Investing activities: | ||
Additions to property, plant and equipment | (51,838) | (74,462) |
Purchases of short-term investments | (390,608) | (320,884) |
Proceeds from sales of short-term investments | 22,954 | 447,227 |
Proceeds from maturities of short-term investments | 460,110 | 410,307 |
Proceeds from government awards used for construction | 96 | 0 |
Net cash provided by investing activities | 40,714 | 462,188 |
Financing activities: | ||
Proceeds from issuance of long-term debt | 747,500 | 0 |
Payment of debt issuance costs | (15,125) | 0 |
Payments to retire long-term debt | (428,599) | 0 |
Purchase of capped call options | (65,332) | 0 |
Repurchases of common stock | (200,764) | 0 |
Principal payments on debt obligations and finance leases | (811) | (846) |
Tax withholding on stock-based awards | (3,949) | (5,976) |
Net cash provided by (used in) financing activities | 32,920 | (6,822) |
Net change in cash, cash equivalents and restricted cash | 32,508 | 510,857 |
Cash, cash equivalents and restricted cash beginning balance | 264,988 | 143,509 |
Cash, cash equivalents and restricted cash ending balance | 297,496 | 654,366 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 296,468 | 651,215 |
Restricted cash, current | 692 | 2,552 |
Restricted cash, non-current | 336 | 599 |
Total cash, cash equivalents and restricted cash | $ 297,496 | $ 654,366 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business: MP Materials Corp., including its subsidiaries (the “Company” or “MP Materials”), is the largest producer of rare earth materials in the Western Hemisphere. The Company, which is headquartered in Las Vegas, Nevada, owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (“Mountain Pass”), the only rare earth mining and processing site of scale in North America, and is constructing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (the “Fort Worth Facility”), where the Company anticipates manufacturing neodymium-iron-boron (“NdFeB”) permanent magnets and its precursor products. The Company produces rare earth concentrate products as well as refined rare earth oxides and related products. The rare earth concentrate is principally sold pursuant to the Offtake Agreements to Shenghe (as such terms are defined in Note 19 , “Related-Party Transactions” ), a related party of the Company, that, in turn, typically sells that product to refiners in China. In the second half of 2023, the Company began producing and selling separated rare earth products, including neodymium-praseodymium (“NdPr”) oxide. Additionally, the Company has a long-term agreement with General Motors Company (NYSE: GM) (“GM”) to supply U.S.-sourced and manufactured rare earth materials and finished magnets for the electric motors in more than a dozen models based on GM’s Ultium Platform. Operating segments are defined as components of an enterprise engaged in business activities, about which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM views the Company’s operations and manages the business as one reportable segment. The cash flows and profitability of the Company’s operations are significantly affected by the market price of rare earth products. The prices of rare earth products are affected by numerous factors beyond the Company’s control. The products of the Company are sold globally, with a primary focus in the Asian market due to the refining, metallization, and magnet manufacturing capabilities of the region. Rare earth products are critical inputs in hundreds of existing and emerging clean-tech applications including electric vehicles and wind turbines as well as robotics, drones, and defense applications. Basis of Presentation: The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, since they are interim statements, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited Condensed Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Form 10-K. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The unaudited Condensed Consolidated Financial Statements include the accounts of MP Materials Corp. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates: The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from those estimates. Concentration of Risk: Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents and short-term investments, and receivables from customers. The Company believes that its credit risk is limited because the Company’s current contracts are with companies that have a reliable payment history. The Company does not believe that it is exposed to any significant risks related to its cash accounts, money market funds, or short-term investments. As of March 31, 2024, Shenghe was the Company’s principal customer and accounted for more than 80% of revenue. Rare earth concentrate is not quoted on any major commodities market or exchange and demand for rare earth concentrate is currently constrained to a relatively limited number of refiners, a significant majority of which are based in China. Uncertainty exists as to the market price of rare earth oxide (“REO”), as evidenced by the volatility experienced in 2022 and 2023 primarily due to concerns over the global economic conditions and actual or perceived concerns over increases in the supply of or slower growth in the demand for rare earth products. Furthermore, while revenue is generated in the U.S., Shenghe conducts its primary operations in China and may transport and sell products in the Chinese market. Note 19 , “Related-Party Transactions,” for additional information. Capped Call Options: The Company’s Capped Call Options cover the aggregate number of shares of its common stock that initially underlie the 2030 Notes (as such terms are defined in Note 10 , “Debt Obligations” ), and generally reduce potential dilution to the Company’s common stock upon the conversion of the 2030 Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted 2030 Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Options. The Company determined that the Capped Call Options meet the definition of a freestanding derivative under Accounting Standards Codification (“ASC”) 815, “Derivatives and Hedging” (“ASC 815”), but are not required to be separately accounted for as a derivative as they meet the indexation and equity classification scope exception outlined in ASC 815. Accordingly, the Company recognized the cash paid to enter into the Capped Call Options contract by recording an entry to “Additional paid-in capital” (“APIC”) in “Stockholders’ equity” within the Company’s unaudited Condensed Consolidated Balance Sheets. The Capped Call Options recorded in APIC will not be remeasured each reporting period. See Note 10 , “Debt Obligations,” for additional information. Treasury Stock: Treasury stock represents shares of the Company’s common stock that have been reacquired after having been issued, and is accounted for under the cost method. Treasury stock is excluded from the Company’s outstanding shares and recorded as a reduction of “Stockholders’ equity” within the Company’s unaudited Condensed Consolidated Balance Sheets, unless the repurchased shares are immediately retired. Incremental direct costs to purchase treasury stock, such as excise taxes and commission fees, are included in the cost of the shares acquired. As of March 31, 2024, the outstanding balance of the excise tax liability was $1.8 million and was included in “Other non-current liabilities” within the Company’s unaudited Condensed Consolidated Balance Sheets. Recently Issued Accounting Pronouncements: During the three months ended March 31, 2024, there were no accounting pronouncements adopted by the Company that had a material impact on the Company’s unaudited Condensed Consolidated Financial Statements. The Company is currently evaluating the effect of adopting Accounting Standards Update (“ASU”) No. 2023-07, “Improvements to Reportable Segment Disclosures,” and ASU No. 2023-09, “Improvements to Income Tax Disclosures,” on its disclosures. Reclassifications: Certain amounts in prior periods have been reclassified to conform to the current year presentation. |
CASH, CASH EQUIVALENTS AND INVE
CASH, CASH EQUIVALENTS AND INVESTMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
CASH, CASH EQUIVALENTS AND INVESTMENTS | CASH, CASH EQUIVALENTS AND INVESTMENTS The following table presents the Company’s cash, cash equivalents and short-term investments: March 31, 2024 December 31, 2023 (in thousands) Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Cash: Demand deposits $ 1,190 $ — $ — $ 1,190 $ 2,795 $ — $ — $ 2,795 Cash equivalents: Money market funds 134,329 — — 134,329 61,166 — — 61,166 U.S. Treasury securities 57,770 1 (2) 57,769 92,113 14 — 92,127 Commercial paper 81,433 — (12) 81,421 93,447 15 — 93,462 Certificates of deposit 21,758 1 — 21,759 13,799 2 — 13,801 Total cash equivalents 295,290 2 (14) 295,278 260,525 31 — 260,556 Total cash and equivalents 296,480 2 (14) 296,468 263,320 31 — 263,351 Short-term investments: U.S. agency securities — — — — 118,370 — (78) 118,292 U.S. Treasury securities 650,369 23 (93) 650,299 615,962 249 (10) 616,201 Total short-term investments 650,369 23 (93) 650,299 734,332 249 (88) 734,493 Total cash, cash equivalents and short-term investments $ 946,849 $ 25 $ (107) $ 946,767 $ 997,652 $ 280 $ (88) $ 997,844 The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell, any investments in unrealized loss positions before recovery of their amortized cost basis. The Company did not recognize any credit losses related to its available-for-sale investments during the three months ended March 31, 2024 and 2023. The unrealized losses on the Company’s available-for-sale investments were primarily due to unfavorable changes in interest rates subsequent to initial purchase. None of the available-for-sale investments held as of March 31, 2024, were in a continuous unrealized loss position for greater than 12 months and the unrealized losses and the related risk of expected credit losses were not material. The Company recognized the following income and expense amounts, all of which are included in “Other income, net” within the Company’s unaudited Condensed Consolidated Statements of Operations: For the three months ended March 31, (in thousands) 2024 2023 Gross realized gains $ 2 $ 505 Gross realized losses $ 6 $ 139 Interest and investment income (1) $ 12,870 $ 13,347 (1) Includes interest and investment income on the Company’s available-for-sale securities and other money market funds. As of March 31, 2024, all outstanding available-for-sale investments had contractual maturities within one year and aggregated to a fair value of $811.2 million. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The Company’s inventories consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Raw materials and supplies, including spare parts (1) $ 43,808 $ 42,371 Mined ore stockpiles 29,694 28,507 Work in process 27,141 15,019 Finished goods 7,866 9,285 Total current inventories 108,509 95,182 Add: Non-current portion (2) 14,531 13,350 Total inventories $ 123,040 $ 108,532 (1) Includes raw materials to support activities pertaining to the Company’s rare earth metal, alloy and magnet manufacturing capabilities. (2) Represents stockpiled ore that is not expected to be processed within the next 12 months as well as certain raw materials that are not expected to be consumed within the next 12 months. The stockpiled ore amounts as of March 31, 2024 and December 31, 2023, were $9.6 million and $9.1 million, respectively. For the three months ended March 31, 2024, the Company recorded a lower of cost or net realizable value reserve of $6.0 million on certain of the Company’s work in process and finished goods inventories, largely attributable to elevated carrying costs of the Company’s initial production of separated products given the early stage of ramping the Stage II facilities to normalized production levels. The reserve is included in “Cost of sales (excluding depreciation, depletion and amortization) (including related party)” within the unaudited Condensed Consolidated Statement of Operations. There was no lower of cost or net realizable value reserve for the three months ended March 31, 2023. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The Company’s property, plant and equipment consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Land and land improvements $ 28,855 $ 27,091 Buildings and building improvements 92,814 92,203 Machinery and equipment 512,997 503,145 Assets under construction 256,434 211,848 Mineral rights 438,395 438,395 Property, plant and equipment, gross 1,329,495 1,272,682 Less: Accumulated depreciation and depletion (133,009) (114,628) Property, plant and equipment, net $ 1,196,486 $ 1,158,054 Additions to Property, Plant and Equipment: The Company capitalized expenditures related to property, plant and equipment of $56.6 million and $74.3 million for the three months ended March 31, 2024 and 2023, respectively, including amounts not yet paid (see Note 20 , “Supplemental Cash Flow Information” ). The capitalized expenditures for the three months ended March 31, 2024, related primarily to machinery, equipment and assets under construction to support the Company’s Fort Worth Facility, as well as its HREE Facility (as defined in Note 15 , “ Government Grants ” ), and other projects at Mountain Pass. The capitalized expenditures for the three months ended March 31, 2023, related to machinery, equipment, and assets under construction to support the Company’s Stage II optimization project, and assets under construction for its Fort Worth Facility. The Company’s depreciation and depletion expense were as follows: For the three months ended March 31, (in thousands) 2024 2023 Depreciation expense $ 14,900 $ 5,245 Depletion expense $ 3,132 $ 2,800 The Company recognized $2.5 million of demolition costs for the three months ended March 31, 2023, which are included in “Other operating costs and expenses” within the Company’s unaudited Condensed Consolidated Statements of Operations, incurred in connection with demolishing and removing certain old facilities from the Mountain Pass site that have never been used in the Company’s operations. There were no property, plant and equipment impairments recognized for the three months ended March 31, 2024 and 2023. For information on the Company’s asset-based government grants, which impact the carrying amount of the Company’s property, plant and equipment, see Note 15 , “Government Grants.” |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS The Company’s intangible assets were as follows: March 31, 2024 December 31, 2023 (in thousands) Intangible assets with indefinite lives: Emissions allowances $ 316 $ 316 Intangible assets with definite lives: Patent and intellectual property license 8,963 8,963 Less: Accumulated amortization (697) (398) Patent and intellectual property license, net 8,266 8,565 Intangible assets, net $ 8,582 $ 8,881 Amortization expense related to amortizing intangible assets was $0.3 million for the three months ended March 31, 2024. There was no amortization expense related to amortizing intangible assets recognized for the three months ended March 31, 2023. No impairment charges were recorded during the three months ended March 31, 2024 and 2023. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENT The Company’s equity method investment balance was $9.6 million and $9.7 million, as of March 31, 2024, and December 31, 2023, respectively, and pertains to the Company’s 49% equity interest in VREX Holdco Pte. Ltd. (“VREX Holdco”). VREX Holdco wholly owns Vietnam Rare Earth Company Limited (“VREX”), which owns and operates a metal processing plant and related facilities in Vietnam. The Company determined that VREX Holdco is a variable interest entity, but that the Company is not the primary beneficiary. Consequently, the Company does not consolidate VREX Holdco, and instead, accounts for its investment in VREX Holdco under the equity method of accounting as it has the ability to exercise significant influence, but not control, over VREX Holdco’s operating and financial policies. For the three months ended March 31, 2024, the Company’s share of VREX Holdco’s net loss, which was not material, was included in “Other income, net” within the Company’s unaudited Condensed Consolidated Statements of Operations. As of March 31, 2024, the tolling fees due to VREX Holdco pursuant to the Tolling Agreement (as defined in Note 19 , “Related-Party Transactions,” ) and capitalized to inventories that are subject to intra-entity profit or loss elimination were immaterial. See Note 19 , “Related-Party Transactions,” for a discussion on the transactions between the Company and VREX Holdco during the three months ended March 31, 2024. As of March 31, 2024, the Company evaluated its equity method investment for impairment to determine if there were any events or changes in circumstances that would indicate if the carrying amount of its investment had experienced an “other-than-temporary” decline in value. As a result, no impairment charge was recorded during the three months ended March 31, 2024. |
ASSET RETIREMENT AND ENVIRONMEN
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS | ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS Asset Retirement Obligations The Company estimates asset retirement obligations based on the requirements to reclaim certain land areas associated with mineral extraction activities and certain related facilities at Mountain Pass. Minor reclamation activities related to discrete portions of the Company’s operations are ongoing. As of March 31, 2024, the Company estimated a significant portion of the cash outflows for major reclamation activities including the retirement of Mountain Pass will be incurred beginning in 2056. As of March 31, 2024, the credit-adjusted risk-free rate ranged between 6.5% and 12.0% depending on the timing of expected settlement and when the increment was recognized. There were no significant increments or decrements for the three months ended March 31, 2024 and 2023. The balance as of both March 31, 2024 and December 31, 2023, included current portions of $0.2 million, which are included in “Other current liabilities” within the Company’s unaudited Condensed Consolidated Balance Sheets. The total estimated future undiscounted cash flows required to satisfy the Company’s asset retirement obligations were $50.2 million as of both March 31, 2024 and December 31, 2023. Environmental Obligations The Company has certain environmental monitoring and remediation obligations related to the monitoring of groundwater contamination. The Company engaged an environmental consultant to develop a remediation plan and remediation cost projections based upon that plan. Utilizing the consultant’s plan, the Company developed an estimate of future cash payments for the environmental obligations. As of March 31, 2024, the Company estimated the cash outflows related to these environmental activities will be incurred annually over the next 24 years. The Company’s environmental obligations are measured at the expected value of future cash outflows discounted to their present value using a discount rate of 2.93%. There were no significant changes in the estimated remaining remediation costs for the three months ended March 31, 2024 and 2023. The total estimated aggregate undiscounted cost of $26.5 million and $26.7 million as of March 31, 2024, and December 31, 2023, respectively, principally related to water monitoring activities required by state and local agencies. Based on the Company’s estimate of the cost and timing and the assumption that payments are considered to be fixed and reliably determinable, the Company has discounted the liability. The balance as of both March 31, 2024, and December 31, 2023, included current portions of $0.5 million, which are included in “Other current liabilities” within the Company’s unaudited Condensed Consolidated Balance Sheets. Financial Assurances The Company is required to provide certain government agencies with financial assurances relating to closure and reclamation obligations. As of March 31, 2024, and December 31, 2023, the Company had financial assurance requirements of $45.5 million and $45.4 million, respectively, which were satisfied with surety bonds placed with applicable California state and regional agencies. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES The Company’s accrued liabilities consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Accrued payroll and related $ 8,703 $ 14,499 Accrued construction costs 55,365 46,976 Accrued taxes 839 3,373 Other accrued liabilities 9,080 9,091 Accrued liabilities $ 73,987 $ 73,939 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | DEBT OBLIGATIONS The Company’s long-term debt, net, was as follows: March 31, 2024 December 31, 2023 (in thousands) Principal Amount Unamortized Debt Issuance Costs Carrying Amount Principal Amount Unamortized Debt Issuance Costs Carrying Amount Convertible Notes due 2026 $ 210,000 $ (2,180) $ 207,820 $ 690,000 $ (8,020) $ 681,980 Convertible Notes due 2030 747,500 (19,735) 727,765 — — — Total long-term debt outstanding $ 957,500 $ (21,915) $ 935,585 $ 690,000 $ (8,020) $ 681,980 Convertible Notes due 2026 In March 2021, the Company issued $690.0 million aggregate principal amount of 0.25% unsecured convertible senior notes (the “2026 Notes”) at a price of par. Interest on the 2026 Notes is payable on April 1 st and October 1 st of each year, beginning on October 1, 2021. Contemporaneous with the pricing of the 2030 Notes (as defined below), the Company entered into privately negotiated transactions with certain holders of the 2026 Notes to repurchase $400.0 million in aggregate principal amount of the 2026 Notes, using $358.0 million of the net proceeds from the offering of the 2030 Notes. The price the Company paid to repurchase the 2026 Notes, 89.5% of par value, was the same for each lender and approximated the trading price of the 2026 Notes at the time of the repurchases. Subsequent to the issuance of the 2030 Notes, the Company repurchased an additional $80.0 million in aggregate principal amount of the 2026 Notes in open market transactions for $70.6 million. As a result of the repurchases of 2026 Notes, during the three months ended March 31, 2024, the Company recorded a $46.3 million gain on early extinguishment of debt included within the Company’s unaudited Condensed Consolidated Statement of Operations. The remaining 2026 Notes outstanding mature, unless earlier converted, redeemed or repurchased, on April 1, 2026. The initial conversion price of the remaining 2026 Notes is approximately $44.28 per share, or 22.5861 shares per $1,000 principal amount of notes, subject to adjustment upon the occurrence of certain events. As of March 31, 2024, the maximum number of shares that could be issued to satisfy the conversion feature of the 2026 Notes was 5,999,994. The 2026 Notes’ if-converted value did not exceed its principal amount as of March 31, 2024. In March 2024, the Company provided a written notice to the trustee and the holders of the 2026 Notes that it has irrevocably elected to fix the settlement method for all conversions that may occur subsequent to the election date, to a combination of cash and shares of the Company’s common stock with the specified dollar amount per $1,000 principal amount of the 2026 Notes of $1,000. As a result, for any conversions of 2026 Notes occurring after the election date, a converting holder will receive (i) up to $1,000 in cash per $1,000 principal amount of the 2026 Notes and (ii) shares of the Company’s common stock for any conversion consideration in excess of $1,000 per $1,000 principal amount of the 2026 Notes converted. Prior to the election being made, the Company could have elected to settle the 2026 Notes in cash, shares of the Company’s common stock or a combination thereof. Convertible Notes due 2030 In March 2024, the Company issued $747.5 million in aggregate principal amount of 3.00% unsecured convertible senior notes that mature, unless earlier converted, redeemed or repurchased, on March 1, 2030 (the “2030 Notes” and, together with the 2026 Notes, the “Convertible Notes”), at a price of par. Interest on the 2030 Notes is payable on March 1 st and September 1 st of each year, beginning on September 1, 2024. In connection with the issuance, the Company recorded debt issuance costs of $19.9 million, of which, $15.1 million was paid in cash as of March 31, 2024, and $3.7 million was settled through the issuance of shares of the Company’s common stock (see Note 20 , “Supplemental Cash Flow Information” ). The 2030 Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion price of approximately $21.74 per share, or 45.9939 shares per $1,000 principal amount of 2030 Notes, subject to adjustment upon the occurrence of certain events. As of March 31, 2024, the maximum number of shares that could be issued to satisfy the conversion feature of the 2030 Notes was 48,132,646. The 2030 Notes’ if-converted value did not exceed its principal amount as of March 31, 2024. Prior to December 1, 2029, at their election, holders of the 2030 Notes may convert their outstanding notes under the following circumstances: i) during any calendar quarter commencing with the third quarter of 2024 if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; ii) during the five business day period after any ten consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the indenture governing the 2030 Notes) per $1,000 principal amount of 2030 Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; iii) if the Company calls any or all of the 2030 Notes for redemption, the notes called for redemption may be converted at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or iv) upon the occurrence of specified corporate events set forth in the indenture governing the 2030 Notes. On or after December 1, 2029, and prior to the close of business on the second scheduled trading day immediately preceding the maturity date of the 2030 Notes, holders may convert their outstanding notes at any time, regardless of the foregoing circumstances. The Company has the option to redeem for cash the 2030 Notes, in whole or in part, beginning on March 5, 2027, if certain conditions are met as set forth in the indenture governing the 2030 Notes. The redemption price is equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. If the Company undergoes a fundamental change (as defined in the indenture governing the 2030 Notes), holders may require the Company to repurchase for cash all or any portion of their outstanding 2030 Notes at a price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date of the 2030 Notes or if the Company delivers a notice of early redemption, holders may, at their election, convert their outstanding 2030 Notes in connection with such event or notice, as applicable, and the Company will, in certain circumstances, increase the conversion rate but not to exceed 64.3915 shares per $1,000 principal amount of any converted 2030 Notes, subject to further adjustment upon the occurrence of certain events. Capped Call Options In March 2024, in connection with the offering of the 2030 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Options”) with certain financial institutions (“Counterparties”). The Capped Call Options cover, subject to anti-dilution adjustments substantially similar to those in the 2030 Notes, 34.4 million shares of the Company’s common stock, the same number of shares that initially underlie the 2030 Notes. The Capped Call Options have an expiration date of March 1, 2030, subject to earlier exercise. The Capped Call Options are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the 2030 Notes and/or offset cash payments the Company is required to make in excess of the principal amount of the converted 2030 Notes, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Options, is greater than the strike price of the Capped Call Options, which initially corresponds to the initial conversion price of the 2030 Notes, or approximately $21.74 per share of common stock, with such reduction and/or offset subject to an initial cap of $31.06 per share of the Company’s common stock. The Capped Call Options are separate transactions, entered into by the Company with each of the Counterparties, and are not part of the terms of the 2030 Notes. Holders of the 2030 Notes will not have any rights with respect to the Capped Call Options. The Capped Call Options meet the criteria for classification as equity and, as such, are not remeasured each reporting period. The Company paid $65.3 million for the Capped Call Options, which was recorded as a reduction to APIC within the Company’s unaudited Condensed Consolidated Balance Sheets along with the offsetting associated deferred tax impact of $16.1 million. The Company elected to integrate the Capped Call Options with the 2030 Notes for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $65.3 million gross cost of the purchased Capped Call Options will be deductible for income tax purposes as original discount interest over the term of the 2030 Notes. Interest expense related to the Convertible Notes was as follows: For the three months ended March 31, (in thousands) 2024 2023 Coupon interest $ 1,914 $ 431 Amortization of debt issuance costs 913 882 Convertible Notes interest expense $ 2,827 $ 1,313 The debt issuance costs associated with the 2026 Notes and the 2030 Notes are being amortized to interest expense over the terms of each note at effective interest rates of 0.51% and 3.49%, respectively. The remaining term of the 2026 Notes and the 2030 Notes were 2.0 years and 5.9 years, respectively, as of March 31, 2024. Equipment Notes The Company has financing agreements for the purchase of certain equipment, including trucks, tractors, loaders, graders, and various other machinery. The Company’s equipment notes, which are secured by the purchased equipment, have terms of between 4 to 5 years and interest rates of between 0.0% and 4.5% per annum. The current and non-current portions of the equipment notes, which are included within the unaudited Condensed Consolidated Balance Sheets in “Other current liabilities” and “Other non-current liabilities,” respectively, were as follows: March 31, 2024 December 31, 2023 (in thousands) Equipment notes Current $ 1,868 $ 2,106 Non-current 2,121 2,637 $ 3,989 $ 4,743 As of March 31, 2024, none of the agreements or indentures governing the Company’s indebtedness contain financial covenants. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating and finance leases for certain office space, warehouses, vehicles and equipment used in its operations. The Company’s lease agreements do not contain material residual value guarantees or restrictive covenants. As of March 31, 2024, the Company was not reasonably certain of exercising any material purchase, renewal, or termination options contained within its lease agreements. No ROU asset impairment charges were recorded during the three months ended March 31, 2024 and 2023. Supplemental disclosure for the unaudited Condensed Consolidated Balance Sheets related to the Company’s operating and finance leases is as follows: Location on Unaudited Condensed Consolidated Balance Sheets March 31, 2024 December 31, 2023 (in thousands) Operating leases: Right-of-use assets Operating lease right-of-use assets $ 9,705 $ 10,065 Operating lease liability, current Other current liabilities $ 974 $ 959 Operating lease liability, non-current Operating lease liabilities 6,573 6,829 Total operating lease liabilities $ 7,547 $ 7,788 Finance leases: Right-of-use assets Other non-current assets $ 536 $ 591 Finance lease liability, current Other current liabilities $ 193 $ 195 Finance lease liability, non-current Other non-current liabilities 331 388 Total finance lease liabilities $ 524 $ 583 |
LEASES | LEASES The Company has operating and finance leases for certain office space, warehouses, vehicles and equipment used in its operations. The Company’s lease agreements do not contain material residual value guarantees or restrictive covenants. As of March 31, 2024, the Company was not reasonably certain of exercising any material purchase, renewal, or termination options contained within its lease agreements. No ROU asset impairment charges were recorded during the three months ended March 31, 2024 and 2023. Supplemental disclosure for the unaudited Condensed Consolidated Balance Sheets related to the Company’s operating and finance leases is as follows: Location on Unaudited Condensed Consolidated Balance Sheets March 31, 2024 December 31, 2023 (in thousands) Operating leases: Right-of-use assets Operating lease right-of-use assets $ 9,705 $ 10,065 Operating lease liability, current Other current liabilities $ 974 $ 959 Operating lease liability, non-current Operating lease liabilities 6,573 6,829 Total operating lease liabilities $ 7,547 $ 7,788 Finance leases: Right-of-use assets Other non-current assets $ 536 $ 591 Finance lease liability, current Other current liabilities $ 193 $ 195 Finance lease liability, non-current Other non-current liabilities 331 388 Total finance lease liabilities $ 524 $ 583 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate to its year-to-date pretax book income or loss. The tax effects of discrete items, including but not limited to, excess tax benefits or deficiencies associated with stock-based compensation, valuation allowance adjustments based on new evidence, and enactment of tax laws, are reported in the interim period in which they occur. The effective tax rate (income tax expense or benefit as a percentage of income or loss before income taxes) including discrete items was 30.2% and 17.3% for the three months ended March 31, 2024 and 2023, respectively. The Company’s effective income tax rate can vary from period to period depending on, among other factors, percentage depletion, executive compensation deduction limitations, the Section 45X Advanced Manufacturing Production Credit (the “45X Credit”), and changes to its valuation allowance against deferred tax assets. Certain of these and other factors, including the Company’s history and projections of pretax earnings, are considered in assessing its ability to realize its net deferred tax assets. In March 2024, the Company was awarded a $58.5 million Section 48C Qualifying Advanced Energy Project Tax Credit (the “48C Credit”) to advance the construction on its Fort Worth Facility. The 48C Credit is an investment tax credit equal to 30% of qualified investments for certified projects that meet prevailing wage and apprenticeship requirements and are placed in service after the date of the award. For the Company, the 48C Credit is not eligible for direct pay; however, an election may be made to transfer the credit to an unrelated taxpayer at a negotiated rate. As of March 31, 2024, no amount of the 48C Credit has yet been recognized. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation: The Company may become party to lawsuits, administrative proceedings, and government investigations, including environmental, regulatory, construction, and other matters, in the ordinary course of business. Large, and sometimes unspecified, damages or penalties may be sought in some matters, and certain matters may require years to resolve. Other than the matter described below, the Company is not aware of any pending or threatened litigation that it believes would have a material adverse effect on its unaudited Condensed Consolidated Financial Statements. The Company is currently in dispute with a general contractor for a construction project, which is scheduled to go to binding arbitration. The Company disputes that it owes any monies in connection with this construction project. The Company is unable to estimate a range of loss, if any, at this time. If an unfavorable outcome were to occur in the arbitration, it is possible that the impact could be material to the Company’s unaudited Condensed Consolidated Financial Statements in the period in which any such outcome becomes probable and reasonably estimable. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The following table disaggregates the Company’s revenue from contracts with customers by type of good sold, which are transferred to customers at a point in time: For the three months ended March 31, (in thousands) 2024 2023 Rare earth concentrate $ 40,076 $ 95,666 NdPr oxide and metal 8,327 — Other rare earth products 281 34 Total revenue $ 48,684 $ 95,700 The Company evaluates the recognition of revenue based on the criteria set forth in ASC 606, “Revenue from Contracts with Customers.” Given the nature of the Company’s contracts with customers, contract assets and contract liabilities are not material for any period presented. Furthermore, the amount of revenue recognized in the periods presented from performance obligations that were satisfied (or partially satisfied) in previous periods were not material to any period presented. Rare earth concentrate revenue is primarily generated from sales to Shenghe under either the 2022 Offtake Agreement, or starting in January 2024, under the 2024 Offtake Agreement (as such terms are defined in N ote , “ Related-Party Transactions” ). The sales price of rare earth concentrate sold to Shenghe under both agreements is based on a preliminary market price per MT, with an adjustment for the ultimate market price of the product realized by Shenghe upon sales to their customers, including the impact of changes in the exchange rate between the Chinese Yuan and the U.S. dollar. NdPr oxide and metal revenue was generated from sales made primarily under the Company’s distribution agreement with Sumitomo Corporation of Americas. Other rare earth products revenue was generated primarily from sales of other non-concentrate products, including cerium. |
GOVERNMENT GRANTS
GOVERNMENT GRANTS | 3 Months Ended |
Mar. 31, 2024 | |
Government Assistance [Abstract] | |
GOVERNMENT GRANTS | GOVERNMENT GRANTS Asset-Based Grants: In November 2020, the Company was awarded a Defense Production Act Title III technology investment agreement (“TIA”) from the Department of Defense (“DOD”) to establish domestic processing for separated light rare earth elements (this “project”) in the amount of $9.6 million. During the three months ended March 31, 2024, pursuant to the TIA, the Company received $0.1 million in reimbursements from the DOD, which was the final reimbursement expected for this project. There were no reimbursements received for the three months ended March 31, 2023. In February 2022, the Company was awarded a $35.0 million contract by the DOD’s Office of Industrial Base Analysis and Sustainment program to design and build a facility to process heavy rare earth elements (“HREE”) at Mountain Pass (the “HREE Facility”) (the “HREE Production Project Agreement”). There were no reimbursements received from the DOD under the HREE Production Project Agreement for the three months ended March 31, 2024 and 2023. Income-Based Grants: In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022, which, among other things, promotes clean energy adoption by providing several tax incentives for the domestic production and sale of eligible components for tax years beginning after December 31, 2022. Specifically, the 45X Credit provides a credit equal to 10% of eligible “production costs incurred” with respect to the production and sale of critical minerals, including NdPr oxide. In December 2023, the Internal Revenue Service released proposed regulations on the 45X Credit which, among other things, clarified that the definition of “production costs incurred” excludes direct and indirect materials costs, including costs related to the extraction or acquisition of raw materials. The Company accounts for the 45X Credit as an income-based grant as it is not within the scope of ASC 740, “Income Taxes.” As of March 31, 2024 and December 31, 2023, the government grant receivable and deferred government grant within the Company’s unaudited Condensed Consolidated Balance Sheets pertain to the 45X Credit. As of March 31, 2024, the non-current portion of government grant receivable and current portion of deferred government grant of $2.0 million and $1.8 million, respectively, are included in “Other non-current assets” and “Other current liabilities,” respectively. The current portion of deferred government grant as of December 31, 2023, was $1.7 million. For the three months ended March 31, 2024, the benefits recognized in the Company’s unaudited Condensed Consolidated Statements of Operations pertaining to the 45X Credit, which are included as reductions to “Cost of sales (excluding depreciation, depletion and amortization) (including related party)” and “Depreciation, depletion and amortization,” were not material. There were no benefits recognized from income-based government grants for the three months ended March 31, 2023. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION | STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION Treasury Stock In March 2024, the Company’s Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to an aggregate amount of $300.0 million of the Company’s outstanding common stock. The authorization is effective until March 1, 2025, and does not require the purchase of any minimum number of shares. Additionally, in March 2024, pursuant to the Company’s share repurchase program, the Company paid $200.8 million to repurchase 13.0 million shares of its outstanding common stock, of which 12.3 million shares were repurchased contemporaneous with the 2030 Notes offering using $191.6 million of the net proceeds from such offering. The shares repurchased in connection with the 2030 Notes offering were privately negotiated transactions with or through one of the initial purchasers of the 2030 Notes or its affiliate at a price of $15.53 per share, which was equal to the closing price per share of common stock on the date of such transactions. Capped Call Options In March 2024, in connection with the offering of the 2030 Notes, the Company entered into the Capped Call Options with the Counterparties, which cover, subject to anti-dilution adjustments substantially similar to those in the 2030 Notes, 34.4 million shares of the Company’s common stock, the same number of shares that initially underlie the 2030 Notes. The Capped Call Options meet the criteria for classification as equity and, as such, are not remeasured each reporting period. The Company paid $65.3 million for the Capped Call Options, which was recorded as a reduction to APIC within the Company’s unaudited Condensed Consolidated Balance Sheets along with the offsetting associated deferred tax impact of $16.1 million. See Note 10 , “Debt Obligations,” for additional information. Stock-Based Compensation 2020 Incentive Plan: In November 2020, the Company’s stockholders approved the MP Materials Corp. 2020 Stock Incentive Plan (the “2020 Incentive Plan”), which permits the Company to issue stock options (incentive and/or non-qualified); stock appreciation rights (“SARs”); restricted stock, restricted stock units (“RSUs”) and other stock awards (collectively, the “Stock Awards”); and performance awards, which vest contingent upon the attainment of either or a combination of market- or performance-based goals. As of March 31, 2024, the Company has not issued any stock options or SARs and there were 5,381,452 shares available for future grants under the 2020 Incentive Plan. Market-Based PSUs: In January 2024, pursuant to the 2020 Incentive Plan, the Compensation Committee of the Company’s Board of Directors adopted a performance share plan (the “2024 Performance Share Plan”). Pursuant to the 2024 Performance Share Plan, during the three months ended March 31, 2024, the Company granted 177,766 of market-based performance stock units (“PSUs”) at target, all of which cliff vest after a requisite performance and service period of three years. The PSUs have the potential to be earned at between 0% and 200% of the number of awards granted depending on the level of growth of the Company’s total shareholder return (“TSR”) as compared to the TSR of the S&P 400 Index and the S&P 400 Materials Group over the performance period. The fair value of the market-based PSUs was determined using a Monte Carlo simulation technique. The Company’s stock-based compensation was recorded as follows: For the three months ended March 31, (in thousands) 2024 2023 Cost of sales (excluding depreciation, depletion and amortization) (including related party) $ 1,459 $ 1,122 Selling, general and administrative 5,762 5,774 Start-up costs 114 105 Advanced projects and development 132 12 Total stock-based compensation expense $ 7,467 $ 7,013 Stock-based compensation capitalized to property, plant and equipment, net $ 336 $ 745 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS ASC 820, “Fair Value Measurement”, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability and model-based valuation techniques (e.g., the Black-Scholes model) for which all significant inputs are observable in active markets. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate. The fair value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximates the carrying amounts because of the immediate or short-term maturity of these financial instruments. Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalents and restricted cash are classified within Level 1 of the fair value hierarchy. The carrying amounts reported in the unaudited Condensed Consolidated Balance Sheets approximate the fair value of cash, cash equivalents and restricted cash due to the short-term nature of these assets. Short-term Investments The fair value of the Company’s short-term investments, which are classified as available-for-sale securities, is estimated based on quoted prices in active markets and is classified as a Level 1 measurement. Convertible Notes The fair value of the Company’s Convertible Notes is estimated based on quoted prices in active markets and is classified as a Level 1 measurement. Equipment Notes The Company’s equipment notes are classified within Level 2 of the fair value hierarchy because there are inputs that are directly observable for substantially the full term of the liability. Model-based valuation techniques for which all significant inputs are observable in active markets were used to calculate the fair values of liabilities classified within Level 2 of the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: March 31, 2024 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 296,468 $ 296,468 $ 296,468 $ — $ — Short-term investments $ 650,299 $ 650,299 $ 650,299 $ — $ — Restricted cash $ 1,028 $ 1,028 $ 1,028 $ — $ — Financial liabilities: 2026 Notes $ 207,820 $ 183,750 $ 183,750 $ — $ — 2030 Notes $ 727,765 $ 703,121 $ 703,121 $ — $ — Equipment notes $ 3,989 $ 3,915 $ — $ 3,915 $ — December 31, 2023 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 263,351 $ 263,351 $ 263,351 $ — $ — Short-term investments $ 734,493 $ 734,493 $ 734,493 $ — $ — Restricted cash $ 1,637 $ 1,637 $ 1,637 $ — $ — Financial liabilities: 2026 Notes $ 681,980 $ 619,496 $ 619,496 $ — $ — Equipment notes $ 4,743 $ 4,628 $ — $ 4,628 $ — |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income by the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method or the if-converted method, as applicable. The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted earnings (loss) per share: For the three months ended March 31, 2024 2023 Weighted-average shares outstanding, basic 174,556,850 176,881,723 Assumed conversion of 2026 Notes 12,234,976 15,584,409 Assumed conversion of restricted stock — 723,145 Assumed conversion of RSUs — 424,262 Weighted-average shares outstanding, diluted 186,791,826 193,613,539 The following table presents unweighted potentially dilutive shares that were not included in the computation of diluted earnings (loss) per share because to do so would have been antidilutive: For the three months ended March 31, 2024 2023 2030 Notes 34,380,440 — Restricted Stock 342,601 — RSUs 1,889,538 4,245 Total 36,612,579 4,245 The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock: For the three months ended March 31, (in thousands, except share and per share data) 2024 2023 Calculation of basic EPS: Net income $ 16,489 $ 37,447 Weighted-average shares outstanding, basic 174,556,850 176,881,723 Basic EPS $ 0.09 $ 0.21 Calculation of diluted earnings (loss) per share: Net income $ 16,489 $ 37,447 Interest expense, net of tax (1) : 2026 Notes 740 1,086 Gain on early extinguishment of debt (1)(2) (32,279) — Diluted income (loss) $ (15,050) $ 38,533 Weighted-average shares outstanding, diluted 186,791,826 193,613,539 Diluted earnings (loss) per share $ (0.08) $ 0.20 (1) The three months ended March 31, 2024 and 2023, were tax-effected at a rate of 30.2% and 17.3%, respectively. (2) Pertains to the 2026 Notes, a portion of which were repurchased during the three months ended March 31, 2024. In connection with the issuance of the 2030 Notes, the Company entered into Capped Call Options, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive. The Capped Call Options are expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the 2030 Notes. The Company has not exercised any of the Capped Call Options as of March 31, 2024. As discussed in Note 10 , “Debt Obligations,” |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Offtake Agreements: In March 2022, the Company entered into an offtake agreement (the “2022 Offtake Agreement”) with Shenghe Resources (Singapore) International Trading Pte. Ltd. (“Shenghe”), a majority-owned subsidiary of Leshan Shenghe Rare Earth Co., Ltd. whose ultimate parent is Shenghe Resources Holding Co., Ltd., a leading global rare earth company listed on the Shanghai Stock Exchange. The 2022 Offtake Agreement became effective upon the termination of the amended and restated offtake agreement with Shenghe. The initial term of the 2022 Offtake Agreement was two years, with the option to extend the term at the Company’s discretion for an additional one-year period. Pursuant to the 2022 Offtake Agreement, and subject to certain exclusions, Shenghe was obligated to purchase on a “take or pay” basis the rare earth concentrate produced by the Company as the exclusive distributor in China, with certain exceptions for the Company’s direct sales globally. In addition, at the discretion of the Company, Shenghe may be required to purchase on a “take or pay” basis certain non-concentrate rare earth products, although the Company may sell all non-concentrate rare earth products in its sole discretion to customers or end users in any jurisdiction. The sales price of rare earth concentrate sold to Shenghe were based on a preliminary market price per metric ton, with an adjustment for the ultimate market price of the product realized by Shenghe upon sales to their customers. The sales price and other terms applicable to a quantity of offtake products were set forth in monthly purchase agreements between the Company and Shenghe. Under the 2022 Offtake Agreement, Shenghe was paid a variable commission on net proceeds to the Company. In January 2024, the Company entered into a new offtake agreement with Shenghe (the “2024 Offtake Agreement” and, together with the 2022 Offtake Agreement, the “Offtake Agreements”) that replaced and extended the 2022 Offtake Agreement. The initial term of the 2024 Offtake Agreement is two years, with the option for the Company to extend the term for an additional one-year period. The terms of the 2024 Offtake Agreement are substantially the same as those of the 2022 Offtake Agreement with the exception of the addition of NdPr metal into the definition of non-concentrate rare earth products. Tolling Agreement with VREX Holdco: In October 2023, prior to the Company’s investment in VREX Holdco, the Company entered into a tolling agreement with VREX Holdco (the “Tolling Agreement”). Pursuant to the Tolling Agreement, the Company delivers NdPr oxide to VREX Holdco, which VREX Holdco then causes VREX to process into NdPr metal for delivery to the Company’s customers globally. During the term of the Tolling Agreement, the Company will pay VREX Holdco a processing fee per unit of rare earth metal produced. The Company maintains title to the products and directly enters into sales agreements for the produced NdPr metal. The initial term of the Tolling Agreement is three years and may be renewed for additional three-year terms. In December 2023, prior to the Company’s investment in VREX Holdco, the Company made a payment of $1.2 million to VREX Holdco for tolling services, of which, $0.7 million was for services yet to be performed as of March 31, 2024. Refer to Not e , “Equity Method Investment,” for additional information on the investment in VREX Holdco. Revenue and Cost of Sales: The Company’s related-party revenue and cost of sales were as follows: For the three months ended March 31, (in thousands) 2024 2023 Revenue: Rare earth concentrate $ 40,076 $ 89,054 NdPr oxide and metal $ 546 $ — Cost of sales (excluding depreciation, depletion and amortization) $ 19,232 $ 22,709 Purchases of Materials and Supplies: The Company purchases certain reagent products (generally produced by an unrelated third-party manufacturer) used in the flotation process as well as other materials from Shenghe in the ordinary course of business. Total purchases were $1.1 million and $0.9 million for the three months ended March 31, 2024 and 2023, respectively. Accounts Receivable: As of March 31, 2024, and December 31, 2023, $13.6 million and $9.2 million, respectively, of the accounts receivable as stated in the unaudited Condensed Consolidated Balance Sheets, were receivable from and pertained to sales made to Shenghe in the ordinary course of business. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Supplemental cash flow information and non-cash investing and financing activities were as follows: For the three months ended March 31, (in thousands) 2024 2023 Supplemental cash flow information: Cash paid for interest $ 594 $ 105 Change in construction payables and accrued construction costs $ 4,744 $ (130) Supplemental non-cash investing and financing activities: Common stock issued in exchange for financial advisory services $ 3,737 $ — Excise tax obligation related to repurchases of common stock $ 1,794 $ — |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, since they are interim statements, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations and cash flows for the interim periods presented herein are not necessarily indicative of the results that would be achieved during a full year of operations or in future periods. These unaudited Condensed Consolidated Financial Statements and notes thereto should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Form 10-K. |
Principles of Consolidation | The unaudited Condensed Consolidated Financial Statements include the accounts of MP Materials Corp. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from those estimates. |
Concentration of Risk | Financial instruments that potentially subject the Company to credit risk consist principally of cash, cash equivalents and short-term investments, and receivables from customers. The Company believes that its credit risk is limited because the Company’s current contracts are with companies that have a reliable payment history. The Company does not believe that it is exposed to any significant risks related to its cash accounts, money market funds, or short-term investments. As of March 31, 2024, Shenghe was the Company’s principal customer and accounted for more than 80% of revenue. Rare earth concentrate is not quoted on any major commodities market or exchange and demand for rare earth concentrate is currently constrained to a relatively limited number of refiners, a significant majority of which are based in China. Uncertainty exists as to the market price of rare earth oxide (“REO”), as evidenced by the volatility experienced in 2022 and 2023 primarily due to concerns over the global economic conditions and actual or perceived concerns over increases in the supply of or slower growth in the demand for rare earth products. Furthermore, while revenue is generated in the U.S., Shenghe conducts its primary operations in China and may transport and sell products in the Chinese market. Note 19 , “Related-Party Transactions,” for additional information. |
Capped Call Options | The Company’s Capped Call Options cover the aggregate number of shares of its common stock that initially underlie the 2030 Notes (as such terms are defined in Note 10 , “Debt Obligations” ), and generally reduce potential dilution to the Company’s common stock upon the conversion of the 2030 Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted 2030 Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Options. The Company determined that the Capped Call Options meet the definition of a freestanding derivative under Accounting Standards Codification (“ASC”) 815, “Derivatives and Hedging” (“ASC 815”), but are not required to be separately accounted for as a derivative as they meet the indexation and equity classification scope exception outlined in ASC 815. Accordingly, the Company recognized the cash paid to enter into the Capped Call Options contract by recording an entry to “Additional paid-in capital” (“APIC”) in “Stockholders’ equity” within the Company’s unaudited Condensed Consolidated Balance Sheets. The Capped Call Options recorded in APIC will not be remeasured each reporting period. See Note 10 , “Debt Obligations,” for additional information. |
Treasury Stock | Treasury stock represents shares of the Company’s common stock that have been reacquired after having been issued, and is accounted for under the cost method. Treasury stock is excluded from the Company’s outstanding shares and recorded as a reduction of “Stockholders’ equity” within the Company’s unaudited Condensed Consolidated Balance Sheets, unless the repurchased shares are immediately retired. Incremental direct costs to purchase treasury stock, such as excise taxes and commission fees, are included in the cost of the shares acquired. |
Recently Issued Accounting Pronouncements | During the three months ended March 31, 2024, there were no accounting pronouncements adopted by the Company that had a material impact on the Company’s unaudited Condensed Consolidated Financial Statements. The Company is currently evaluating the effect of adopting Accounting Standards Update (“ASU”) No. 2023-07, “Improvements to Reportable Segment Disclosures,” and ASU No. 2023-09, “Improvements to Income Tax Disclosures,” on its disclosures. |
Reclassifications | Certain amounts in prior periods have been reclassified to conform to the current year presentation. |
CASH, CASH EQUIVALENTS AND IN_2
CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Debt Securities, Available-for-Sale | The following table presents the Company’s cash, cash equivalents and short-term investments: March 31, 2024 December 31, 2023 (in thousands) Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Cash: Demand deposits $ 1,190 $ — $ — $ 1,190 $ 2,795 $ — $ — $ 2,795 Cash equivalents: Money market funds 134,329 — — 134,329 61,166 — — 61,166 U.S. Treasury securities 57,770 1 (2) 57,769 92,113 14 — 92,127 Commercial paper 81,433 — (12) 81,421 93,447 15 — 93,462 Certificates of deposit 21,758 1 — 21,759 13,799 2 — 13,801 Total cash equivalents 295,290 2 (14) 295,278 260,525 31 — 260,556 Total cash and equivalents 296,480 2 (14) 296,468 263,320 31 — 263,351 Short-term investments: U.S. agency securities — — — — 118,370 — (78) 118,292 U.S. Treasury securities 650,369 23 (93) 650,299 615,962 249 (10) 616,201 Total short-term investments 650,369 23 (93) 650,299 734,332 249 (88) 734,493 Total cash, cash equivalents and short-term investments $ 946,849 $ 25 $ (107) $ 946,767 $ 997,652 $ 280 $ (88) $ 997,844 The Company recognized the following income and expense amounts, all of which are included in “Other income, net” within the Company’s unaudited Condensed Consolidated Statements of Operations: For the three months ended March 31, (in thousands) 2024 2023 Gross realized gains $ 2 $ 505 Gross realized losses $ 6 $ 139 Interest and investment income (1) $ 12,870 $ 13,347 (1) Includes interest and investment income on the Company’s available-for-sale securities and other money market funds. |
Schedule of Cash and Cash Equivalents | The following table presents the Company’s cash, cash equivalents and short-term investments: March 31, 2024 December 31, 2023 (in thousands) Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Cash: Demand deposits $ 1,190 $ — $ — $ 1,190 $ 2,795 $ — $ — $ 2,795 Cash equivalents: Money market funds 134,329 — — 134,329 61,166 — — 61,166 U.S. Treasury securities 57,770 1 (2) 57,769 92,113 14 — 92,127 Commercial paper 81,433 — (12) 81,421 93,447 15 — 93,462 Certificates of deposit 21,758 1 — 21,759 13,799 2 — 13,801 Total cash equivalents 295,290 2 (14) 295,278 260,525 31 — 260,556 Total cash and equivalents 296,480 2 (14) 296,468 263,320 31 — 263,351 Short-term investments: U.S. agency securities — — — — 118,370 — (78) 118,292 U.S. Treasury securities 650,369 23 (93) 650,299 615,962 249 (10) 616,201 Total short-term investments 650,369 23 (93) 650,299 734,332 249 (88) 734,493 Total cash, cash equivalents and short-term investments $ 946,849 $ 25 $ (107) $ 946,767 $ 997,652 $ 280 $ (88) $ 997,844 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The Company’s inventories consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Raw materials and supplies, including spare parts (1) $ 43,808 $ 42,371 Mined ore stockpiles 29,694 28,507 Work in process 27,141 15,019 Finished goods 7,866 9,285 Total current inventories 108,509 95,182 Add: Non-current portion (2) 14,531 13,350 Total inventories $ 123,040 $ 108,532 (1) Includes raw materials to support activities pertaining to the Company’s rare earth metal, alloy and magnet manufacturing capabilities. (2) Represents stockpiled ore that is not expected to be processed within the next 12 months as well as certain raw materials that are not expected to be consumed within the next 12 months. The stockpiled ore amounts as of March 31, 2024 and December 31, 2023, were $9.6 million and $9.1 million, respectively. |
Schedule of Noncurrent Inventories | The Company’s inventories consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Raw materials and supplies, including spare parts (1) $ 43,808 $ 42,371 Mined ore stockpiles 29,694 28,507 Work in process 27,141 15,019 Finished goods 7,866 9,285 Total current inventories 108,509 95,182 Add: Non-current portion (2) 14,531 13,350 Total inventories $ 123,040 $ 108,532 (1) Includes raw materials to support activities pertaining to the Company’s rare earth metal, alloy and magnet manufacturing capabilities. (2) Represents stockpiled ore that is not expected to be processed within the next 12 months as well as certain raw materials that are not expected to be consumed within the next 12 months. The stockpiled ore amounts as of March 31, 2024 and December 31, 2023, were $9.6 million and $9.1 million, respectively. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment and Depreciation and Depletion Expense | The Company’s property, plant and equipment consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Land and land improvements $ 28,855 $ 27,091 Buildings and building improvements 92,814 92,203 Machinery and equipment 512,997 503,145 Assets under construction 256,434 211,848 Mineral rights 438,395 438,395 Property, plant and equipment, gross 1,329,495 1,272,682 Less: Accumulated depreciation and depletion (133,009) (114,628) Property, plant and equipment, net $ 1,196,486 $ 1,158,054 The Company’s depreciation and depletion expense were as follows: For the three months ended March 31, (in thousands) 2024 2023 Depreciation expense $ 14,900 $ 5,245 Depletion expense $ 3,132 $ 2,800 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The Company’s intangible assets were as follows: March 31, 2024 December 31, 2023 (in thousands) Intangible assets with indefinite lives: Emissions allowances $ 316 $ 316 Intangible assets with definite lives: Patent and intellectual property license 8,963 8,963 Less: Accumulated amortization (697) (398) Patent and intellectual property license, net 8,266 8,565 Intangible assets, net $ 8,582 $ 8,881 |
Schedule of Indefinite-Lived Intangible Assets | The Company’s intangible assets were as follows: March 31, 2024 December 31, 2023 (in thousands) Intangible assets with indefinite lives: Emissions allowances $ 316 $ 316 Intangible assets with definite lives: Patent and intellectual property license 8,963 8,963 Less: Accumulated amortization (697) (398) Patent and intellectual property license, net 8,266 8,565 Intangible assets, net $ 8,582 $ 8,881 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The Company’s accrued liabilities consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Accrued payroll and related $ 8,703 $ 14,499 Accrued construction costs 55,365 46,976 Accrued taxes 839 3,373 Other accrued liabilities 9,080 9,091 Accrued liabilities $ 73,987 $ 73,939 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Obligations | The Company’s long-term debt, net, was as follows: March 31, 2024 December 31, 2023 (in thousands) Principal Amount Unamortized Debt Issuance Costs Carrying Amount Principal Amount Unamortized Debt Issuance Costs Carrying Amount Convertible Notes due 2026 $ 210,000 $ (2,180) $ 207,820 $ 690,000 $ (8,020) $ 681,980 Convertible Notes due 2030 747,500 (19,735) 727,765 — — — Total long-term debt outstanding $ 957,500 $ (21,915) $ 935,585 $ 690,000 $ (8,020) $ 681,980 The current and non-current portions of the equipment notes, which are included within the unaudited Condensed Consolidated Balance Sheets in “Other current liabilities” and “Other non-current liabilities,” respectively, were as follows: March 31, 2024 December 31, 2023 (in thousands) Equipment notes Current $ 1,868 $ 2,106 Non-current 2,121 2,637 $ 3,989 $ 4,743 |
Schedule of Interest Expense, Net | Interest expense related to the Convertible Notes was as follows: For the three months ended March 31, (in thousands) 2024 2023 Coupon interest $ 1,914 $ 431 Amortization of debt issuance costs 913 882 Convertible Notes interest expense $ 2,827 $ 1,313 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Supplemental Disclosure For The Consolidated Balance Sheets Related to Operating And Finance Leases | Supplemental disclosure for the unaudited Condensed Consolidated Balance Sheets related to the Company’s operating and finance leases is as follows: Location on Unaudited Condensed Consolidated Balance Sheets March 31, 2024 December 31, 2023 (in thousands) Operating leases: Right-of-use assets Operating lease right-of-use assets $ 9,705 $ 10,065 Operating lease liability, current Other current liabilities $ 974 $ 959 Operating lease liability, non-current Operating lease liabilities 6,573 6,829 Total operating lease liabilities $ 7,547 $ 7,788 Finance leases: Right-of-use assets Other non-current assets $ 536 $ 591 Finance lease liability, current Other current liabilities $ 193 $ 195 Finance lease liability, non-current Other non-current liabilities 331 388 Total finance lease liabilities $ 524 $ 583 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s revenue from contracts with customers by type of good sold, which are transferred to customers at a point in time: For the three months ended March 31, (in thousands) 2024 2023 Rare earth concentrate $ 40,076 $ 95,666 NdPr oxide and metal 8,327 — Other rare earth products 281 34 Total revenue $ 48,684 $ 95,700 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Awards Activity | The Company’s stock-based compensation was recorded as follows: For the three months ended March 31, (in thousands) 2024 2023 Cost of sales (excluding depreciation, depletion and amortization) (including related party) $ 1,459 $ 1,122 Selling, general and administrative 5,762 5,774 Start-up costs 114 105 Advanced projects and development 132 12 Total stock-based compensation expense $ 7,467 $ 7,013 Stock-based compensation capitalized to property, plant and equipment, net $ 336 $ 745 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: March 31, 2024 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 296,468 $ 296,468 $ 296,468 $ — $ — Short-term investments $ 650,299 $ 650,299 $ 650,299 $ — $ — Restricted cash $ 1,028 $ 1,028 $ 1,028 $ — $ — Financial liabilities: 2026 Notes $ 207,820 $ 183,750 $ 183,750 $ — $ — 2030 Notes $ 727,765 $ 703,121 $ 703,121 $ — $ — Equipment notes $ 3,989 $ 3,915 $ — $ 3,915 $ — December 31, 2023 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 263,351 $ 263,351 $ 263,351 $ — $ — Short-term investments $ 734,493 $ 734,493 $ 734,493 $ — $ — Restricted cash $ 1,637 $ 1,637 $ 1,637 $ — $ — Financial liabilities: 2026 Notes $ 681,980 $ 619,496 $ 619,496 $ — $ — Equipment notes $ 4,743 $ 4,628 $ — $ 4,628 $ — |
Fair Value Disclosure of Asset and Liability Not Measured at Fair Value | The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: March 31, 2024 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 296,468 $ 296,468 $ 296,468 $ — $ — Short-term investments $ 650,299 $ 650,299 $ 650,299 $ — $ — Restricted cash $ 1,028 $ 1,028 $ 1,028 $ — $ — Financial liabilities: 2026 Notes $ 207,820 $ 183,750 $ 183,750 $ — $ — 2030 Notes $ 727,765 $ 703,121 $ 703,121 $ — $ — Equipment notes $ 3,989 $ 3,915 $ — $ 3,915 $ — December 31, 2023 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 263,351 $ 263,351 $ 263,351 $ — $ — Short-term investments $ 734,493 $ 734,493 $ 734,493 $ — $ — Restricted cash $ 1,637 $ 1,637 $ 1,637 $ — $ — Financial liabilities: 2026 Notes $ 681,980 $ 619,496 $ 619,496 $ — $ — Equipment notes $ 4,743 $ 4,628 $ — $ 4,628 $ — |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares | The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted earnings (loss) per share: For the three months ended March 31, 2024 2023 Weighted-average shares outstanding, basic 174,556,850 176,881,723 Assumed conversion of 2026 Notes 12,234,976 15,584,409 Assumed conversion of restricted stock — 723,145 Assumed conversion of RSUs — 424,262 Weighted-average shares outstanding, diluted 186,791,826 193,613,539 |
Schedule of potentially dilutive securities | The following table presents unweighted potentially dilutive shares that were not included in the computation of diluted earnings (loss) per share because to do so would have been antidilutive: For the three months ended March 31, 2024 2023 2030 Notes 34,380,440 — Restricted Stock 342,601 — RSUs 1,889,538 4,245 Total 36,612,579 4,245 |
Schedule of basic and diluted earnings per share | The following table presents the calculation of basic and diluted earnings (loss) per share for the Company’s common stock: For the three months ended March 31, (in thousands, except share and per share data) 2024 2023 Calculation of basic EPS: Net income $ 16,489 $ 37,447 Weighted-average shares outstanding, basic 174,556,850 176,881,723 Basic EPS $ 0.09 $ 0.21 Calculation of diluted earnings (loss) per share: Net income $ 16,489 $ 37,447 Interest expense, net of tax (1) : 2026 Notes 740 1,086 Gain on early extinguishment of debt (1)(2) (32,279) — Diluted income (loss) $ (15,050) $ 38,533 Weighted-average shares outstanding, diluted 186,791,826 193,613,539 Diluted earnings (loss) per share $ (0.08) $ 0.20 (1) The three months ended March 31, 2024 and 2023, were tax-effected at a rate of 30.2% and 17.3%, respectively. (2) Pertains to the 2026 Notes, a portion of which were repurchased during the three months ended March 31, 2024. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Revenue and Cost of Sales | The Company’s related-party revenue and cost of sales were as follows: For the three months ended March 31, (in thousands) 2024 2023 Revenue: Rare earth concentrate $ 40,076 $ 89,054 NdPr oxide and metal $ 546 $ — Cost of sales (excluding depreciation, depletion and amortization) $ 19,232 $ 22,709 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow information and non-cash investing and financing activities were as follows: For the three months ended March 31, (in thousands) 2024 2023 Supplemental cash flow information: Cash paid for interest $ 594 $ 105 Change in construction payables and accrued construction costs $ 4,744 $ (130) Supplemental non-cash investing and financing activities: Common stock issued in exchange for financial advisory services $ 3,737 $ — Excise tax obligation related to repurchases of common stock $ 1,794 $ — |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 1 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Concentration Risk [Line Items] | |
Excise tax liability | $ 1.8 |
Shenghe | Product sales | Customer concentration risk | Shenghe | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 80% |
CASH, CASH EQUIVALENTS AND IN_3
CASH, CASH EQUIVALENTS AND INVESTMENTS - Amortized Costs, Unrealized Gains and Losses, and Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Total cash and equivalents | ||
Amortized Cost Basis | $ 296,480 | $ 263,320 |
Unrealized Gains | 2 | 31 |
Unrealized Losses | (14) | 0 |
Estimated Fair Value | 296,468 | 263,351 |
Short-term investments: | ||
Amortized Cost Basis | 650,369 | 734,332 |
Unrealized Gains | 23 | 249 |
Unrealized Losses | (93) | (88) |
Short-term investments | 650,299 | 734,493 |
Amortized Cost Basis | 946,849 | 997,652 |
Unrealized Gains | 25 | 280 |
Unrealized Losses | (107) | (88) |
Total cash, cash equivalents and short-term investments | 946,767 | 997,844 |
U.S. agency securities | ||
Short-term investments: | ||
Amortized Cost Basis | 0 | 118,370 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (78) |
Short-term investments | 0 | 118,292 |
U.S. Treasury securities | ||
Short-term investments: | ||
Amortized Cost Basis | 650,369 | 615,962 |
Unrealized Gains | 23 | 249 |
Unrealized Losses | (93) | (10) |
Short-term investments | 650,299 | 616,201 |
Demand deposits | ||
Total cash and equivalents | ||
Amortized Cost Basis | 1,190 | 2,795 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 1,190 | 2,795 |
Total cash equivalents | ||
Total cash and equivalents | ||
Amortized Cost Basis | 295,290 | 260,525 |
Unrealized Gains | 2 | 31 |
Unrealized Losses | (14) | 0 |
Estimated Fair Value | 295,278 | 260,556 |
Money market funds | ||
Total cash and equivalents | ||
Amortized Cost Basis | 134,329 | 61,166 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 134,329 | 61,166 |
U.S. Treasury securities | ||
Total cash and equivalents | ||
Amortized Cost Basis | 57,770 | 92,113 |
Unrealized Gains | 1 | 14 |
Unrealized Losses | (2) | 0 |
Estimated Fair Value | 57,769 | 92,127 |
Commercial paper | ||
Total cash and equivalents | ||
Amortized Cost Basis | 81,433 | 93,447 |
Unrealized Gains | 0 | 15 |
Unrealized Losses | (12) | 0 |
Estimated Fair Value | 81,421 | 93,462 |
Certificates of deposit | ||
Total cash and equivalents | ||
Amortized Cost Basis | 21,758 | 13,799 |
Unrealized Gains | 1 | 2 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 21,759 | $ 13,801 |
CASH, CASH EQUIVALENTS AND IN_4
CASH, CASH EQUIVALENTS AND INVESTMENTS - Debt Securities, Income and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross realized gains | $ 2 | $ 505 |
Gross realized losses | 6 | 139 |
Interest and investment income | 12,870 | $ 13,347 |
Due within one year | $ 811,200 |
CASH, CASH EQUIVALENTS AND IN_5
CASH, CASH EQUIVALENTS AND INVESTMENTS - Schedule of Investments Classified by Contractual Maturity Date (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract] | |
Due within one year | $ 811.2 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |||
Raw materials and supplies, including spare parts | $ 43,808 | $ 42,371 | |
Inventory, Mined Ore Stockpiles, Net of Reserves, Current | 29,694 | 28,507 | |
Work in process | 27,141 | 15,019 | |
Finished goods | 7,866 | 9,285 | |
Total current inventories | 108,509 | 95,182 | |
Add: Non-current portion | 14,531 | 13,350 | |
Total inventories | 123,040 | 108,532 | |
Inventory, Mined Ore Stockpiles, Net of Reserves, Non-current | 9,600 | $ 9,100 | |
Lower of cost or net realizable value reserve | $ 5,991 | $ 0 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Schedule Of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,329,495 | $ 1,272,682 |
Less: Accumulated depreciation and depletion | (133,009) | (114,628) |
Property, plant and equipment, net | 1,196,486 | 1,158,054 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 28,855 | 27,091 |
Buildings and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 92,814 | 92,203 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 512,997 | 503,145 |
Assets under construction | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 256,434 | 211,848 |
Mineral rights | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 438,395 | $ 438,395 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Capitalized expenditures | $ 56,600,000 | $ 74,300,000 |
Demolition costs | 2,500,000 | |
Asset impairment charges | $ 0 | $ 0 |
PROPERTY, PLANT AND EQUIPENT -
PROPERTY, PLANT AND EQUIPENT - Depreciation and Depletion Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 14,900 | $ 5,245 |
Depletion expense | $ 3,132 | $ 2,800 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.3 | $ 0 |
Goodwill and Intangible Asset Impairment | $ 0 | $ 0 |
INTANGIBLE ASSETS - Finite-Live
INTANGIBLE ASSETS - Finite-Lived and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible assets with indefinite lives: | ||
Emissions allowances | $ 316 | $ 316 |
Intangible assets with definite lives: | ||
Patent and intellectual property license | 8,963 | 8,963 |
Less: Accumulated amortization | (697) | (398) |
Patent and intellectual property license, net | 8,266 | 8,565 |
Intangible assets, net | $ 8,582 | $ 8,881 |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment | $ 9,647 | $ 9,673 |
Impairment charge | $ 0 | |
VREX HoldCo Pte. Ltd | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest percentage | 49% |
ASSET RETIREMENT AND ENVIRONM_2
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Unusual Risk or Uncertainty [Line Items] | ||
Asset retirement obligation, current | $ 0.2 | $ 0.2 |
Estimated undiscounted cash flows, to satisfy obligation | $ 50.2 | 50.2 |
Remediation term | 24 years | |
Discount rate | 2.93% | |
Environmental obligations, undiscounted cost | $ 26.5 | 26.7 |
Environmental obligations, current | 0.5 | 0.5 |
Closure and reclamation obligations, financial assurances | $ 45.5 | $ 45.4 |
Minimum | ||
Unusual Risk or Uncertainty [Line Items] | ||
Asset retirement obligations, credit-adjusted risk free rate | 6.50% | |
Maximum | ||
Unusual Risk or Uncertainty [Line Items] | ||
Asset retirement obligations, credit-adjusted risk free rate | 12% |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related | $ 8,703 | $ 14,499 |
Accrued construction costs | 55,365 | 46,976 |
Accrued taxes | 839 | 3,373 |
Other accrued liabilities | 9,080 | 9,091 |
Accrued liabilities | $ 73,987 | $ 73,939 |
DEBT OBLIGATIONS - Schedule of
DEBT OBLIGATIONS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Principal Amount | $ 957,500 | $ 690,000 |
Unamortized Debt Issuance Costs | (21,915) | (8,020) |
Carrying Amount | 935,585 | 681,980 |
Convertible Notes due 2026 | Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 210,000 | 690,000 |
Unamortized Debt Issuance Costs | (2,180) | (8,020) |
Carrying Amount | 207,820 | 681,980 |
Convertible Notes due 2030 | Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 747,500 | 0 |
Unamortized Debt Issuance Costs | (19,735) | 0 |
Carrying Amount | $ 727,765 | $ 0 |
DEBT OBLIGATIONS - Convertible
DEBT OBLIGATIONS - Convertible Notes (Details) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2024 USD ($) d $ / shares | Mar. 31, 2021 USD ($) $ / shares | Mar. 31, 2024 USD ($) shares $ / shares | Mar. 31, 2023 USD ($) | Mar. 07, 2024 USD ($) | |
Debt Instrument [Line Items] | |||||
Gain on early extinguishment of debt | $ 46,265,000 | $ 0 | |||
Debt issuance costs paid in cash | 15,125,000 | 0 | |||
Common stock issued in exchange for financial advisory services | 3,737,000 | $ 0 | |||
Convertible Notes due 2026 | |||||
Debt Instrument [Line Items] | |||||
Percentage of par value | $ 0.895 | ||||
Convertible Notes due 2026 | Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Amount borrowed | $ 690,000,000 | ||||
Interest rate | 0.25% | ||||
Principal amount of debt repurchased | 80,000,000 | 80,000,000 | $ 400,000,000 | ||
Cash paid to repurchase debt | $ 70,600,000 | $ 70,600,000 | $ 358,000,000 | ||
Debt instrument, convertible, conversion price (in USD per share) | $ / shares | $ 44.28 | ||||
Debt instrument, convertible, conversion ratio | 0.0225861 | ||||
Debt instrument, convertible, number of equity instruments (in shares) | shares | 5,999,994 | ||||
Effective interest rate | 0.51% | 0.51% | |||
Debt term | 2 years | ||||
Convertible Notes due 2030 | Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Amount borrowed | $ 747,500,000 | $ 747,500,000 | |||
Interest rate | 3% | 3% | |||
Debt instrument, convertible, conversion price (in USD per share) | $ / shares | $ 21.74 | $ 21.74 | |||
Debt instrument, convertible, conversion ratio | 0.0459939 | ||||
Debt instrument, convertible, number of equity instruments (in shares) | shares | 48,132,646 | ||||
Effective interest rate | 3.49% | 3.49% | |||
Debt term | 5 years 10 months 24 days | ||||
Gross debt issuance costs | $ 19,900,000 | $ 19,900,000 | |||
Debt issuance costs paid in cash | 15,100,000 | ||||
Common stock issued in exchange for financial advisory services | $ 3,700,000 | ||||
Debt instrument, redemption price, percentage | 100% | ||||
Convertible Notes due 2030 | Convertible Debt [Member] | Debt Instrument, Redemption, Period One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, convertible, threshold trading days | d | 20 | ||||
Threshold consecutive trading days | d | 30 | ||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130% | ||||
Debt Instrument, Convertible, Business Day Period During Which Debt Can be Converted | d | 5 | ||||
Debt Instrument, Convertible, Treshold Consecutive Business Days | d | 10 | ||||
Debt Instrument, Convertible, Percentage of Product Of The Last Reported Sale Price Of the Company’s Common Stock And The Conversion Rate On Each Such Trading Day | 98% | ||||
Convertible Notes due 2030 | Convertible Debt [Member] | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, convertible, conversion ratio | 0.0643915 |
DEBT OBLIGATIONS - Capped Calls
DEBT OBLIGATIONS - Capped Calls (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Debt Instrument [Line Items] | |
Option Indexed To Issuers Equity Stock Price Cap | $ / shares | $ 31.06 |
Call Option | |
Debt Instrument [Line Items] | |
Payments For Capped Call Option Related To Convertible Debt | $ 65.3 |
Deferred tax impact of Capped Call Options | $ 16.1 |
Call Option | Common Stock, par value of $0.0001 per share | |
Debt Instrument [Line Items] | |
Shares covered by Capped Call Options | shares | 34.4 |
DEBT OBLIGATIONS - Interest Exp
DEBT OBLIGATIONS - Interest Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | $ 913 | $ 882 |
Convertible Debt [Member] | ||
Debt Instrument [Line Items] | ||
Coupon interest | 1,914 | 431 |
Amortization of debt issuance costs | 913 | 882 |
Convertible Notes interest expense | $ 2,827 | $ 1,313 |
DEBT OBLIGATIONS - Equipment No
DEBT OBLIGATIONS - Equipment Notes (Details) - Equipment notes - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Equipment notes | ||
Current | $ 1,868 | $ 2,106 |
Non-current | 2,121 | 2,637 |
Notes payable | $ 3,989 | $ 4,743 |
Minimum | ||
Debt Instrument [Line Items] | ||
Debt term | 4 years | |
Interest rate | 0% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Debt term | 5 years | |
Interest rate | 4.50% |
LEASES - Supplemental Disclosur
LEASES - Supplemental Disclosure for the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Right-of-use assets | ||
Right-of-use assets | $ 9,705 | $ 10,065 |
Operating lease liability, current | 974 | 959 |
Operating lease liability, non-current | 6,573 | 6,829 |
Total operating lease liabilities | $ 7,547 | $ 7,788 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Finance leases: | ||
Right-of-use assets | $ 536 | $ 591 |
Finance lease liability, current | 193 | 195 |
Finance lease liability, non-current | 331 | 388 |
Total finance lease liabilities | $ 524 | $ 583 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other non-current assets | Other non-current assets |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating Loss Carryforwards [Line Items] | ||
Effective tax rate | 30.20% | 17.30% |
Investment Tax Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward | $ 58.5 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 48,684 | $ 95,700 |
Rare earth concentrate (including related party) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 40,076 | 95,666 |
NdPr oxide and metal (including related party) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 8,327 | 0 |
Other rare earth products | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 281 | $ 34 |
GOVERNMENT GRANTS - Narrative (
GOVERNMENT GRANTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Feb. 28, 2022 | Nov. 30, 2020 | |
Government Assistance [Line Items] | |||||
Reimbursements received from the government | $ 96 | $ 0 | |||
Government grant receivable | 19,302 | $ 19,302 | |||
Technology Investment Agreement | |||||
Government Assistance [Line Items] | |||||
Technology investment agreement, stage II optimization contribution | $ 9,600 | ||||
Reimbursements received from the government | 100 | 0 | |||
HREE Production Project Agreement | |||||
Government Assistance [Line Items] | |||||
Reimbursements received from the government | 0 | $ 0 | |||
HREE Production Project Agreement, stage II optimization contribution | $ 35,000 | ||||
45 X Credit Government Grant | |||||
Government Assistance [Line Items] | |||||
Government grant receivable, noncurrent | 2,000 | ||||
Deferred government grant | $ 1,800 | $ 1,700 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Mar. 07, 2024 | Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share repurchase program, authorized, amount | $ 300,000 | $ 300,000 | ||
Repurchases of common stock | $ 191,600 | $ 200,764 | $ 0 | |
Repurchases of common stock (in shares) | 12,300,000 | 13,000,000 | ||
Average cost per share acquired | $ 15.53 | |||
Requisite service period | 3 years | |||
Call Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Payments For Capped Call Option Related To Convertible Debt | 65,300 | |||
Deferred tax impact of Capped Call Options | $ 16,100 | $ 16,100 | ||
Call Option | Common Stock, par value of $0.0001 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares covered by Capped Call Options | 34,400,000 | 34,400,000 | ||
2020 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants (in shares) | 5,381,452 | 5,381,452 | ||
2024 Performance Share Plan | Market-Based PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted (in shares) | 177,766 | |||
Vesting period | 3 years | |||
2024 Performance Share Plan | Market-Based PSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage of the awards granted (as a percent) | 0% | |||
2024 Performance Share Plan | Market-Based PSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage of the awards granted (as a percent) | 200% |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-Based Compensation and Related Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 7,467 | $ 7,013 |
Stock-based compensation capitalized to property, plant and equipment, net | 336 | 745 |
Cost of sales (excluding depreciation, depletion and amortization) (including related party) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 1,459 | 1,122 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 5,762 | 5,774 |
Start-up costs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 114 | 105 |
Advanced Projects and Development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 132 | $ 12 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financial assets: | ||
Cash and cash equivalents | $ 296,468 | $ 263,351 |
Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 296,468 | 263,351 |
Short-term investments | 650,299 | 734,493 |
Restricted cash | 1,028 | 1,637 |
Level 1 | Convertible Debt [Member] | Convertible Notes due 2026 | ||
Financial liabilities: | ||
Debt fair value | 183,750 | 619,496 |
Level 1 | Convertible Debt [Member] | Convertible Notes due 2030 | ||
Financial liabilities: | ||
Debt fair value | 703,121 | |
Level 1 | Equipment notes | ||
Financial liabilities: | ||
Debt fair value | 0 | 0 |
Level 2 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Restricted cash | 0 | 0 |
Level 2 | Convertible Debt [Member] | Convertible Notes due 2026 | ||
Financial liabilities: | ||
Debt fair value | 0 | 0 |
Level 2 | Convertible Debt [Member] | Convertible Notes due 2030 | ||
Financial liabilities: | ||
Debt fair value | 0 | |
Level 2 | Equipment notes | ||
Financial liabilities: | ||
Debt fair value | 3,915 | 4,628 |
Level 3 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Restricted cash | 0 | 0 |
Level 3 | Convertible Debt [Member] | Convertible Notes due 2026 | ||
Financial liabilities: | ||
Debt fair value | 0 | 0 |
Level 3 | Convertible Debt [Member] | Convertible Notes due 2030 | ||
Financial liabilities: | ||
Debt fair value | 0 | |
Level 3 | Equipment notes | ||
Financial liabilities: | ||
Debt fair value | 0 | 0 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 296,468 | 263,351 |
Short-term investments | 650,299 | 734,493 |
Restricted cash | 1,028 | 1,637 |
Carrying Amount | Convertible Debt [Member] | Convertible Notes due 2026 | ||
Financial liabilities: | ||
Debt fair value | 207,820 | 681,980 |
Carrying Amount | Convertible Debt [Member] | Convertible Notes due 2030 | ||
Financial liabilities: | ||
Debt fair value | 727,765 | |
Carrying Amount | Equipment notes | ||
Financial liabilities: | ||
Debt fair value | 3,989 | 4,743 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 296,468 | 263,351 |
Short-term investments | 650,299 | 734,493 |
Restricted cash | 1,028 | 1,637 |
Fair Value | Convertible Debt [Member] | Convertible Notes due 2026 | ||
Financial liabilities: | ||
Debt fair value | 183,750 | 619,496 |
Fair Value | Convertible Debt [Member] | Convertible Notes due 2030 | ||
Financial liabilities: | ||
Debt fair value | 703,121 | |
Fair Value | Equipment notes | ||
Financial liabilities: | ||
Debt fair value | $ 3,915 | $ 4,628 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Weighted Average Number of Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class of Warrant or Right [Line Items] | ||
Weighted-average shares outstanding, basic (in shares) | 174,556,850 | 176,881,723 |
Assumed conversion of Convertible Notes (in shares) | 12,234,976 | 15,584,409 |
Weighted-average shares outstanding, diluted (in shares) | 186,791,826 | 193,613,539 |
Restricted Stock | ||
Class of Warrant or Right [Line Items] | ||
Assumed conversion of restricted stock awards (in shares) | 0 | 723,145 |
RSUs | ||
Class of Warrant or Right [Line Items] | ||
Assumed conversion of restricted stock awards (in shares) | 0 | 424,262 |
EARNINGS (LOSS) PER SHARE - S_2
EARNINGS (LOSS) PER SHARE - Schedule of Unweighted Potentially Dilutive Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class of Warrant or Right [Line Items] | ||
Antidilutive securities excluding from computation (in shares) | 36,612,579 | 4,245 |
Convertible Notes due 2030 | Convertible Notes due 2030 | ||
Class of Warrant or Right [Line Items] | ||
Antidilutive securities excluding from computation (in shares) | 34,380,440 | 0 |
Restricted Stock | ||
Class of Warrant or Right [Line Items] | ||
Antidilutive securities excluding from computation (in shares) | 342,601 | 0 |
RSUs | ||
Class of Warrant or Right [Line Items] | ||
Antidilutive securities excluding from computation (in shares) | 1,889,538 | 4,245 |
EARNINGS (LOSS) PER SHARE - Cal
EARNINGS (LOSS) PER SHARE - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Calculation of basic EPS: | ||
Net income | $ 16,489 | $ 37,447 |
Weighted-average shares outstanding, basic (in shares) | 174,556,850 | 176,881,723 |
Basic earnings (loss) per share (in USD per share) | $ 0.09 | $ 0.21 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Extinguishment of Debt, Gain (Loss), Net of Tax | $ (32,279) | $ 0 |
Diluted income (loss) | $ (15,050) | $ 38,533 |
Weighted-average shares outstanding, diluted (in shares) | 186,791,826 | 193,613,539 |
Diluted earnings (loss) per share (in USD per share) | $ (0.08) | $ 0.20 |
Effective tax rate | 30.20% | 17.30% |
Convertible Notes due 2026 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Interest expense on convertible debt, net of tax | $ 740 | $ 1,086 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Jan. 31, 2024 | Dec. 31, 2023 | Oct. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 1,100 | $ 900 | ||||
Accounts receivable | $ 10,029 | 21,600 | ||||
Related party | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable | 9,200 | 13,600 | ||||
Offtake Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Initial term | 2 years | |||||
Extension period | 1 year | |||||
VREX Tolling Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Initial term | 3 years | |||||
Extension period | 3 years | |||||
Prepayment for Tolling Services | $ 1,200 | |||||
Prepaid Expense | $ 700 | |||||
2024 Offtake Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Initial term | 2 years | |||||
Extension period | 1 year |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party Revenue and Cost of Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Total revenue | $ 48,684 | $ 95,700 |
Cost of sales (excluding depreciation, depletion and amortization) | 35,594 | 24,216 |
Related party | ||
Related Party Transaction [Line Items] | ||
Cost of sales (excluding depreciation, depletion and amortization) | 19,232 | 22,709 |
Rare earth concentrate | ||
Related Party Transaction [Line Items] | ||
Total revenue | 40,076 | 95,666 |
Rare earth concentrate | Related party | ||
Related Party Transaction [Line Items] | ||
Total revenue | 40,076 | 89,054 |
Other rare earth products | ||
Related Party Transaction [Line Items] | ||
Total revenue | 281 | 34 |
NdPr oxide and metal (including related party) | ||
Related Party Transaction [Line Items] | ||
Total revenue | 8,327 | 0 |
NdPr oxide and metal (including related party) | Related party | ||
Related Party Transaction [Line Items] | ||
Total revenue | $ 546 | $ 0 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Supplemental cash flow information: | ||
Cash paid for interest | $ 594 | $ 105 |
Change in construction payables and accrued construction costs | 4,744 | (130) |
Supplemental non-cash investing and financing activities: | ||
Common stock issued in exchange for financial advisory services | 3,737 | 0 |
Share Repurchase Program, Excise Tax | $ 1,794 | $ 0 |