Lynas Corp (LYC.AX) announced on Monday it signed a contract with the US Department of Defense to begin initial design work for its heavy rare earth separation facility in Texas that the Pentagon is providing initial funding for.

The funding will allow the company and US partner Blue Line to complete a market and strategy study for the construction, the company said in a press release. Lynas expects the work to be completed in the 2021 financial year.

The facility will process heavy rare earths sourced from Lynas’ flagship Mt Weld mine in Western Australia.

“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,” Lynas CEO Amanda Lacaze said in a media statement.

The ‘Phase 1’ funding forms part of a concerted effort by Washington to reduce the United States’ reliance on China as the world’s largest producer of the strategic minerals used to make missiles, cell phones to a ranger of other high-tech equipment.

Several US senators have pushed the Pentagon to fund only domestic rare earth projects.

The Pentagon on April 22 awarded Lynas and privately held MP Materials funding for rare earths separation facilities in Texas and California, respectively.

Lynas’ stock on the Australian Securities Exchange traded at A$2.4 per share, up 11.8% on Monday. Lynas’ market value is $1.2 billion.