Lynas was chosen from submissions for a tender held last December. It and joint venture partner Blue Line will be tasked with completing the detailed planning and design work.

"Successful completion of Phase I milestones may lead to further contracts for commercial-scale production and operation of a US heavy rare earth separation facility; however, this is not guaranteed," Lynas officials noted. "Following Phase I, the DoD will conduct a merit evaluation of Lynas/Blue Line and any other parties selected for Phase I."

While a final location has not yet been selected for the facility, reports have suggested Texas will be chosen.

"We have confidence in the strength of our proposal and in our ability to meet the conditions set by the DoD for the development of a successful heavy rare earths separation facility," Lynas CEO and managing director Amanda Lacaze said.

"Today's announcement creates the foundation for a facility in the US that will assist the US to avoid the supply chain vulnerability that has been exposed over the past year. We look forward to working with the DoD on Phase 1 of this important project."

Neither the financial terms nor the timeline for the facility's construction have been released. However, the DoD will provide Lynas and Blue Line Phase 1 funding under the US Defense Production Act to cover planning work costs.