KEY POINTS

The Defense Department will buy $400 million of preferred stock in MP Materials.

MP Materials owns the only operational rare earth mine in the U.S. at Mountain Pass, California.

It will build a second magnet manufacturing facility in the U.S. with the support of the Pentagon.

Rare earths are key components in a range of military weapons systems.

The Defense Department will become the largest shareholder in rare earth miner MP Materials after agreeing to buy $400 million of its preferred stock, the company said Thursday.

MP Materials owns the only operational rare earth mine in the U.S. at Mountain Pass, California, about 60 miles outside Las Vegas. Proceeds from the Pentagon investment will be used to expand MP's rare earths processing capacity and magnet production, the company said.