Could Buying MP Materials Today Set You Up for Life?

Key Points

• MP Materials’ share price has surged after partnerships with Apple and the Department of Defense.
• It owns the only rare-earth mining and processing site in the U.S.
• Growth hinges on revenue generation, completion of the 10X Facility, and increased magnet production.

I’ve been watching MP Materials (NYSE: MP) with fascination this year. The numbers speak for themselves - a $10,000 investment at the start of 2025 would now be worth a staggering $34,300. That’s a 343% increase that few mining stocks could ever dream of achieving in such a compressed timeframe.

MP Materials stands alone as America’s rare-earth champion. They control the Mountain Pass mine in California - literally the only active rare-earth mining and processing site in the country. This matters tremendously because these elements (like neodymium and praseodymium) are crucial for permanent magnets used in EV motors, wind turbines, and defense systems.

Despite being called “rare,” these elements aren’t geologically scarce - they’re just difficult to find in economically viable concentrations. China currently dominates this market, extracting 70% and processing 90% of global rare earths. The U.S. imports 80% of its rare-earth metals, with 77% coming from China - a strategic vulnerability that keeps Pentagon officials up at night.

This explains why the Department of Defense invested $400 million for a 15% stake in MP Materials and guaranteed a floor price of $110 per kilogram of NdPr oxide for the next decade - double the current Chinese market price. The stock jumped 50% on this news alone.

But that’s not all. Apple committed $500 million to secure U.S.-made rare-earth magnets from 100% recycled materials, while General Motors locked in MP as a supplier for its EV platforms back in 2021. With these heavyweight customers secured, MP’s challenge isn’t demand - it’s production capacity.

The company has only recently started producing small batches of finished magnets at its Fort Worth plant. With a capacity of just 1,000 metric tons, it’s woefully inadequate to meet existing commitments. Their salvation lies in the planned 10X Facility - a second magnet factory backed by $1 billion in financing from major banks that could boost annual capacity to 10,000 metric tons. At $110 per kilogram, that’s potentially $1.1 billion in annual revenue - compared to just $61 million in 2024.

Yet I can’t ignore the risks. MP is bleeding cash while trying to build capital-intensive facilities. They’ve also cut ties with Shenghe Resources, the Chinese company that purchased most of their rare-earth concentrate last year.

While MP Materials rides strong tailwinds and offers tremendous potential, it lacks the immediate production capacity to translate demand into profits. If they complete the 10X Facility by 2028 as planned, buying at today’s price could yield substantial returns. But life-changing wealth? The picture remains too uncertain for such bold predictions.

Should you invest $1,000 in MP Materials right now? Consider exploring other opportunities first. The market offers many promising stocks that might deliver superior returns with less uncertainty than this cash-burning operation with ambitious but unproven plans.