EQUITY METHOD INVESTMENTS

6 Months Ended

Jun. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INVESTMENTS

EQUITY METHOD INVESTMENT

The Company’s equity method investment balance was $9.3 million and $9.7 million, as of June 30, 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 and six months ended June 30, 2024, the Company recognized $0.2 million and $0.3 million of Company’s share of VREX Holdco’s net loss, respectively, which were included in “Other income, net” within the Company’s unaudited Condensed Consolidated Statements of Operations. As of June 30, 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 and six months ended June 30, 2024.

As of June 30, 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 charges were recorded during the three and six months ended June 30, 2024.