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PROPERTY, PLANT AND EQUIPMENT
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT PROPERTY, PLANT AND EQUIPMENT
The Company’s property, plant and equipment consisted of the following:
December 31,
(in thousands)20222021
Land and land improvements$16,102 $7,925 
Buildings and building improvements15,111 8,791 
Machinery and equipment186,388 61,822 
Assets under construction338,482 134,327 
Mineral rights438,395 437,376 
Property, plant and equipment, gross994,478 650,241 
Less: Accumulated depreciation and depletion(58,735)(39,629)
Property, plant and equipment, net$935,743 $610,612 
Additions to Property, Plant and Equipment: The Company capitalized expenditures related to property, plant and equipment of $361.2 million, $138.0 million and $26.2 million for the years ended December 31, 2022, 2021 and 2020, respectively, including amounts not yet paid (see Note 19, “Supplemental Cash Flow Information”). The capitalized expenditures for the year ended December 31, 2022, related to machinery, equipment, and assets under construction to support the Company’s Stage II optimization project, and assets under construction for its rare earth metal, alloy and magnet manufacturing facility as a part of Stage III, including the purchase of approximately 18 acres of land in Fort Worth, Texas. The capitalized expenditures for the years ended December 31, 2021 and 2020, mostly related to vehicles, machinery, equipment, and assets under construction to support the Stage II optimization project and other capital projects at Mountain Pass.
Placement of Certain Stage II Assets into Service: At the end of the fourth quarter of 2022, the Company transferred certain of its assets totaling $121.0 million and pertaining to its Stage II optimization project from assets under construction to buildings, machinery and equipment, with $115.2 million relating to machinery and equipment.
Government Awards: 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. Pursuant to the terms of the TIA, the Company was required to utilize the funds to acquire property and equipment that contribute to the mission of this project. Furthermore, in exchange for these funds, the Company is required to provide the DOD with periodic reporting specific to this project for up to approximately five years.
During the years ended December 31, 2022 and 2021, pursuant to the TIA, the Company received $5.1 million and $4.4 million, respectively, in reimbursements from the DOD. The funds received reduced the carrying amount of certain fixed assets associated with the Company’s Stage II optimization project, which were included in machinery and equipment as of December 31, 2022, and assets under construction as of December 31, 2021. As of December 31, 2022, the Company is entitled to receive an additional $0.1 million from the DOD under the TIA.
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 Production Project Agreement”). The Company must utilize the funds to acquire property and equipment that will contribute to commercial-scale production of separated HREE at Mountain Pass. The Company will be paid fixed amounts upon the completion of certain project milestones. In exchange for these funds, the DOD will have certain rights to technical data following the completion of the project. The funds received pursuant to the HREE Production Project Agreement will reduce the carrying amount of the fixed assets associated with the Company’s HREE processing and separations facility. As of December 31, 2022, the Company has not yet received any funds from the DOD.
Change in Estimates of Asset Retirement Costs: As a result of a decrement to the Company’s ARO during the third quarter of 2022 and fourth quarter of 2021, the carrying amount of the Company’s total property, plant and equipment was reduced by $10.4 million and $8.7 million, respectively, the majority of which pertained to buildings, machinery and equipment, and assets under construction, in the amounts of $0.6 million, $2.7 million and $6.7 million, respectively, and $2.0 million, $2.4 million and $3.2 million, respectively. Additionally, the Company’s depreciation expense for the years ended December 31, 2022 and 2021, was reduced by $2.7 million and $1.1 million, respectively, reflecting the excess of the decrement over the carrying amount of the related property, plant and equipment. See Note 10, “Asset Retirement and Environmental Obligations,” for further information on the decrements.
The Company’s depreciation and depletion expense were as follows:
For the year ended December 31,
(in thousands)202220212020
Depreciation expense$5,808 $6,825 $4,702 
Depletion expense(1)
$12,209 $17,200 $1,961 
(1)At the beginning of the fourth quarter of 2021, as a result of an updated life of mine, the Company revised its estimate of the remaining useful life of the mineral rights to approximately 35 years from approximately 23 years. The effect of the change in estimate was a reduction in depletion expense for the years ended December 31, 2022 and 2021 of $6.1 million and $1.5 million, respectively.
There were no impairments recognized for the years ended December 31, 2022, 2021 and 2020.