Jim Litinsky: Sure. Well, we finally have a Speaker of the House, so that’s progress. I think we’re heading into an election season. And so – and particularly given what’s going on around the world, I’d be – I think it’d be aggressive to say that we expect anything in the very short-term. What I would say, I would look out for, I think one big area from the Mountain Pass standpoint would be there is a bipartisan committee in the House, the Select Committee on China, which has discussed doing something on that front. And so I do think that we will see something on this front. But again, I mean, you see the – what’s going on in Washington on both sides on all fronts. And so we’re certainly not relying on that with respect to the magnet business.
But we do think that as something happens, it’s a strong possibility that something helpful there gets tacked on. And – but to get to the part of your question, just kind of adding on to what Ryan was discussing before with the magnet business, we really – we understand that we’re building a business from scratch there. And the governor is, again, making sure that we are proceeding thoughtfully in a way that is a high return on capital and that we’re managing risk with respect to building out that business. And so we aren’t just going to kind of go out and aggressively spend. And frankly, even if there were legislation as such, we are going to do things that make economic sense. We’re not waiting on government help there, but we want to continue to hit sort of base hits on that front before there is anything much larger.
And of course, obviously, what we’ve got, if you see the scale that we have in Fort Worth today, it’s a pretty big start.
Laurence Alexander: Thank you.
Jim Litinsky: Sure, next questions.
Operator: Thank you. The next question is from the line of Carlos De Alba with Morgan Stanley. You may proceed.
Carlos De Alba: Hi, guys. Good afternoon. So the question I have is you talked about potentially increasing by multiples the production that you had of NdPr oxide in the fourth quarter. And do you feel – I think Michael said that you guys feel very comfortable in reaching your guidance for – your production target for the fourth quarter. I wonder if you can maybe quantify a little bit more this narrowed range of possibilities just given how important it is the cadence of how you guys ramp up the oxide production. That would be my first question.
Michael Rosenthal: Thanks, Carlos. We’re pretty excited with the progress we’re making. I’d be reluctant to give too much clarity on what we expect. But we do expect continued progress in the fourth quarter and even more notable progress into the next year. So we are seeing more stability, more reliability, and we’re going to continue to focus on stability, reliability, longer uninterrupted periods of uptime and then focus really on throughput.
Ryan Corbett: Yes. And Carlos, the only thing I’d add there – it’s Ryan. I think importantly, what we’re also focused on here is ramping production profitably and sustainably and not just chasing volume at all costs. And so I think Michael and his team have done an incredible job achieving that so far. And so we probably expect to have a few more quarters of ramp before we hit our stride, but we’re very, very happy with where we are today.
Carlos De Alba: Alright. Okay. And I hear you correctly in saying that you expect to have already sales of NdPr oxide and ore metal in the fourth quarter?
Ryan Corbett: What we mentioned is expecting the majority of sales even of the Q3 production to occur in Q1. So certainly not ruling out Q4 sales, but in thinking about the sales cycle and the timing of that sale cycle that I’ve laid out in the past, particularly because this initial set of volumes is building up a set of inventory and tolling partners. So this early production is a uniquely slow sales cycle in terms of the transition from concentrate to oxide or metal. I don’t expect the sales cycle to always be exactly this pace. But I think that’s important as you guys look at your models for Q4 and Q1.
Carlos De Alba: Alright. Good. And then my last question is on the 200 million, give or take, that you expect to spend in the Upstream 60k project, is this – how should we think about the cadence or the pace of the disbursements? Is this something that might take maybe start next year and accelerate over the next 4 years or how do you see that disbursement?
Ryan Corbett: Sure. What I’d say on that front is, I think the exciting thing about this project is there are many different pathways for us to hit that target. And so we’ve got enough confidence in the initial test work to lay out the strategy. But like I said, a couple of different ways to get there. I’d expect that the outlay may start very modestly next year and then be a bit backloaded as we likely look at those step changes towards the back portion of that guided for years.
Carlos De Alba: Great. That’s good. Congratulates.
Jim Litinsky: Thanks.
Operator: Thank you. The next question is from the line of George Gianarikas with Canaccord Genuity. You may proceed.
George Gianarikas: Hey, guys. Thank you for taking my questions. First, I’d like to ask about the pricing environment. And a couple of few quarters ago, Jim talked about at $60 a kilogram kind of being a bottom for NdPr prices globally just based on profitability of China Inc. It seems to be – or it seems to be somewhat pressured because we seem to have bounced off that level a couple of times despite a weakening EV market. So any update on your thinking there and whether or not we can continue to at least bounce around these levels for the time being before EV sales accelerate?
Jim Litinsky: Sure. Thank you, George. I always like a question that starts with giving me credit for being patient. So thanks on that. So NdPr is sitting roughly around 70. If you think about the world today versus several months ago, it’s correct that we’ve seen a lot of – the pricing has pretty much held in, but in that time period, if you think about it, we’ve seen deteriorating trends whether – if we look at this quarter, across electrification and whether it was the OEMs themselves, both the new ones and maybe what some would consider legacy ones, the research analysts or some of the semiconductor companies feeding into the supply chain. You’ve sort of seen this feeling around a slowdown in electrification relative to what people thought.
Simultaneously, you’ve seen some wind projects canceled, some major wind turbine projects canceled. And so relative to what people thought and actually, though, even with all of that, prices have held in very well. And so I think it does speak to the fact that we are – we have been bouncing around the bottom because the economics just really require – I mean there is only so long that parties want to lose money. And so certainly, it makes zero economic sense at these levels for any incremental supply really anywhere in the – at least in the non-Chinese world, outside of our Upstream 60k, which also makes our Upstream 60k so exciting because we – for very little incremental capital can create what we believe to be very large long-term enterprise value and have very attractive economics out of the gate.
And so I think that will – I think, hopefully, that will prove pression as well that we have positioned ourselves to be able to make these kinds of investments at times like now where you’d have to be crazy to invest in a greenfield sort of elsewhere in the world with prices here relative to, frankly, buying an MP stock for sure. And then lastly, what I would say is just as I think about trends is we can’t forget about the reality of October and what has happened this past month in the world. And what I mean by that is, of course, there is going to be global macro impacts, and I think all of us see that. But I think that, that is a further strengthening of the theme. There is a theme that we’ve talked about on calls over the last couple of years about deglobalization, people starting to think about supply chains and making sure there isn’t a single point of failure risk.
