Lynas (ASX: LYC) has signed a contract with the U.S. Department of Defense to start design work for a heavy rare earth element (HREE) separation facility in Texas.
The facility would process heavy rare earths from the company's Mt. Weld mine in Western Australia.
In April, the Pentagon awarded Lynas and privately held MP Materials funding for rare earths separation facilities in Texas and California, respectively.
The funds will allow Lynas and U.S. partner Blue Line to complete a detailed market and strategy study as well as detailed planning and design work for the construction of a heavy rare earth separation facility, and management said it expects the work to be completed in the 2021 financial year.
"Heavy Rare Earths are essential for the high performance magnets used in electric motors, and Lynas has the feedstock, intellectual property, and track record to deliver a Heavy Rare Earths facility in a timely and low risk manner," Amanda Lacaze, Lynas's chief executive officer, said in a July 27 news release.
The 'Phase 1' funding forms part of an effort by Washington to lower its reliance on China as the world's largest producer of the strategic minerals.