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MP Materials suffers a quarterly loss due to rising production costs

MP Materials, a U.S. rare-earths producer, announced on Thursday it had swung into a loss in the first quarter due to rising production costs as well as interest expenses. However, results were within expectations.

These are the first results since the Las Vegas company announced last month that it would no longer ship the minerals to China to be processed in response to Beijing’s tariffs.

The company's revenue will be affected by this move, but not until the second quarter results are released in August.

The company reported a loss of $22.6m, or 14c per share for the first quarter ending March 31. This compares to a profit of $16.5m in the same period last year.

According to IBES from LSEG, the company's loss per share was 12 cents, which is in line with analysts' expectations.

After-hours, shares of the Las Vegas based company dropped by 1.3%.

MP reported that its cost of sale, excluding depreciation, and other related items, had increased by approximately $13.3 million. This was due to higher production costs, which were associated with a low level of utilization of its refinery facilities. The company is increasing its use of these facilities.

Interest costs for MP also increased by almost $5 million, largely due to the rising expenses associated with a convertible debt due in 2030.

MP sells rare earth concentrates to refiners around the world, including China. It refines rare Earths in California.

The company produced 12213 metric tonnes of this concentrate in the third quarter, which is 10% more than the previous period.

MP's California refinery produced more than four-times the amount of rare earths (NdPr and Neodymium) during the first quarter.

The actual prices of rare earths concentrates rose by 12% during the third quarter compared to the same period last year, while the prices for NdPr dropped by 16%. (Reporting and editing by Michael Perry; Ernest Scheyder)

(source: Reuters)