(Reuters) -The U.S. Department of Defense plans to continue working with rare earths companies to ensure diverse American supply of the critical minerals used across the economy, a defense official told Reuters on Tuesday. 

The Pentagon last week signed a multibillion-dollar deal to become the largest shareholder in rare earths producer MP Materials ( MP ) and also agreed to several financial backstop measures for the company.

The move - which the defense official said reflected a desire to "share the risk" inherent in a critical minerals project - sparked questions across the U.S. mining sector about whether other companies could see similar investments from the U.S. military.

The Pentagon "is looking forward to continue working with companies across the (rare earths) supply chain to ensure that DoD and the nation have the secure and resilient supply chains necessary to secure national and economic security for generations to come," the official said.

The MP deal structure reflects a "unique approach" by the government to "account for the difficulties in establishing and sustaining production of critical rare earth magnets in a market environment in which China controls much of the supply chain," the official added.

The Pentagon investment in MP was undertaken via a Cold War-era law known as the Defense Production Act, as well as its Office of Strategic Capital, the official said.