The United States has announced a $134 million investment through the U.S. Department of Energy (DOE) to expand domestic rare earth element (REE) production and processing. The program will back projects aimed at recovering, refining, and manufacturing rare earth materials from industrial waste streams. The DOE said the effort is intended to reduce reliance on foreign suppliers while strengthening critical minerals security.
Rare earths in permanent magnets and import dependence
Rare earth elements including neodymium, praseodymium, terbium, and dysprosium are used in high-performance permanent magnets for electric motors, wind turbines, aerospace applications, and military systems. They are also described as important for emerging technologies supporting the modern economy.
Despite their role in strategic equipment, the United States remains heavily dependent on imports. Approximately 70% of America’s imported rare earth materials originate from China, which also leads global refining and processing capabilities.
China accounts for more than 90% of global rare earth metal production and processing, according to the announcement. The concentration of refining capacity has raised concerns following trade disputes and export restrictions. The United States has significant resources, including the Mountain Pass mine in California, but much of the domestically extracted material is sent overseas for processing.
Recovering rare earths from industrial byproducts
The DOE’s funding focuses on recovering valuable rare earth elements from industrial waste streams. Audrey Robertson, Assistant Secretary of Energy for Energy Efficiency and Renewable Energy (EERE), said the initiative is designed to extract value from materials that have traditionally been overlooked.
The approach is intended to create a domestic source of rare earth metals by extracting critical minerals from waste products. It also targets environmental challenges associated with industrial byproducts. The program aligns with broader efforts to develop supply chains while reducing the environmental footprint of mineral production.
Colorado School of Mines demonstration using red mud
One of the two selected projects will be led by the Colorado School of Mines. The institution plans to design, construct, commission, and operate a rare earth demonstration facility near the Gramercy alumina refinery in Louisiana.
The facility will process red mud, described as a byproduct from aluminum production containing significant concentrations of critical minerals and rare earth elements. A consortium of industry and research partners will support the work, including ElementUSA, Pacific Northwest National Laboratory, Principal Mineral, and Rare Earth Technologies Inc.
The project aims to demonstrate an integrated domestic process that extracts rare earth oxides from waste material and refines them into market-ready rare earth metals. If successful, it would provide a scalable model for commercial rare earth production from industrial waste while reducing dependence on imported materials.
Phoenix Tailings demonstration for heavy rare earth recovery
The second project is led by Phoenix Tailings, a company focused on sustainable metal recovery technologies. Its demonstration-scale facility will process domestic waste-derived feedstocks including mine tailings, electronic waste, industrial byproducts, and other critical mineral-rich waste materials.
The project goal is to produce high-purity rare earth metals, with emphasis on heavy rare earth elements that are described as strategically important and difficult to source globally. Phoenix Tailings will collaborate with researchers from the Massachusetts Institute of Technology (MIT) and the University of Minnesota.
The company said the work will advance its technology’s commercial viability by demonstrating pathways for recovering rare earths from existing waste streams. The initiative is positioned to expand America’s domestic supply base through additional recovery routes.
Processing capacity as a focus amid supply chain risks
The DOE funding comes as governments seek supplies of critical minerals used in energy transition applications such as electric vehicles and renewable power infrastructure. It also relates to demand for advanced electronics and national defense systems.
Geopolitical tensions and export controls have highlighted vulnerabilities in existing supply chains. The United States has increasingly prioritized domestic mining, processing, and refining capabilities as part of efforts to reduce strategic dependence on foreign producers.
The DOE said industry experts have noted that securing raw materials alone is not sufficient. Developing domestic processing and refining infrastructure remains a key challenge for Western nations competing with China’s established dominance.
Two demonstration projects within a broader US supply chain effort
The two demonstration projects are described as part of a larger effort to rebuild an integrated American rare earth ecosystem. If technologies prove commercially successful, they could support a domestic supply chain covering extraction, separation, refining, and metal production.
The Department of Energy characterized its $134 million commitment as aimed at transforming industrial waste into strategic resources while reducing reliance on foreign-controlled supply chains. It also said investments in innovative processing technologies may shape future developments in the global rare earth market.
