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I'll come out and say it: I don't think investing $5,000 in rare-earth mining stock MP Materials (NYSE:MP) is going to make you a millionaire. And yet -- yet -- it could still be a great long-term investment, especially with Washington throwing its weight behind MP's development. Here's why.
For those unfamiliar with the company, MP Materials operates the Mountain Pass rare-earth mine in California, one of America's most significant sources of minerals used to make permanent magnets. These magnets are at the heart of MP's story, as they are essential components in an extraordinary range of technology, from electric vehicles and personal computers to fighter jets, drones, and robots.
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Over the years, MP has remade itself into an integrated manufacturer of rare-earth materials, with operations in mining, refining, and magnet production. If that doesn't sound particularly exciting, maybe some context will help.
The integrated business that MP is building could help the U.S. government reduce dependence on foreign suppliers of rare-earth materials and magnets. This reliance has become something of a security issue for Washington, especially given that America's largest suppliers of rare-earths are also its most formidable economic rival (yes, China).
In that regard, Washington has put its weight behind MP. In July 2025, the Pentagon struck a landmark agreement with MP, including a 10-year price floor of $110 per kilogram for its neodymium-praseodymium products. It also agreed to purchase or find buyers for all the magnets produced at MP's planned 10X manufacturing facility, which it plans to begin commissioning in 2028.
Meanwhile, MP is working to secure customers. In July, it launched Project Swarm, which allows drone manufacturers to reserve future magnet production from 10X. That same month, MP also signed a long-term agreement to supply gadolinium to a U.S. aerospace and defense customer.
Clearly, MP has a special place in the U.S.'s efforts to build a domestic rare-earth supply chain. So, why isn't it a millionaire maker?
To turn $5,000 into $1 million, MP Materials stock would need to grow 200-fold. Given its current market cap of about $6.5 billion, that would imply a valuation of roughly $1.3 trillion, assuming its share count remains about the same.
No matter how many friends MP has in Washington, a $1.3 trillion valuation would be extraordinary for this company, quite possibly making it the world's most valuable miner. For perspective, none of the biggest mining companies command a market cap even close to that valuation, despite earning significantly more revenue than MP.
That said, I can envision MP becoming a much larger company in the future, especially if America's push for rare-earth independence continues. MP might not turn $5,000 into $1 million, but for patient investors, it could still deliver substantial returns over the long run.
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Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MP Materials. The Motley Fool has a disclosure policy.
Could Investing $5,000 in MP Materials Help Make You a Millionaire? was originally published by The Motley Fool
