The Pentagon has agreed to buy $400 million worth of preferred stock in U.S. rare earth miner MP Materials, making the Defense Department the company's largest shareholder.

According to CNBC, MP Materials owns the only operational rare earth mine in the U.S., which is located roughly 60 miles outside of Las Vegas in Mountain Pass, California. The Pentagon's investment will reportedly be used to expand MP's processing capacity for rare earth and magnet production.

The Pentagon uses magnets produced from rare earth elements in systems for Tomahawk missiles, Predator drones, smart bombs, F-35 Lightning II fighter jets, and Virginia and Columbia class submarines. Those magnets are also used to generate electricity in planes, and focus microwave energy in radar systems.

The Defense Department has sought to reduce its reliance on China for rare earths for years. Between 2020 and 2023, China accounted for 70% of rare earth imports into the U.S., followed by Malaysia at 13% and Japan at 6%. Compounds and metals imported from Japan and Malaysia were also derived from chemicals produced in Australia and China. U.S. Interior Secretary Doug Burgum first hinted at plans in April to have the U.S. make equity investments in companies that mine and process rare earth minerals.