The US Department of Energy (DOE) has selected two projects for up to $134 million in funding to strengthen domestic rare earth element production.
The project aims to recover valuable minerals from waste materials and convert them into products needed by key industries. The investment supports efforts to build a stronger and more resilient US supply chain for critical minerals.
Rare earth elements play an important role in modern technology. They are used in powerful magnets, electric motors, renewable energy systems, advanced electronics, and defense equipment. Materials such as neodymium, praseodymium, terbium, and dysprosium are especially important because they help improve the performance of many high-tech products.
The funding announcement came from DOE’s Office of Critical Minerals and Energy Innovation. The agency said the selected projects will demonstrate that rare earth elements can be recovered and refined from unconventional sources. These sources include mine waste, industrial byproducts, electronic waste, and other materials that are often discarded.
According to the DOE, finding valuable minerals in waste streams can help the US reduce dependence on imported supplies.
Building domestic processing capabilities is important as demand for rare earth elements continues to rise. Growth in electric vehicles, clean energy technologies, and advanced manufacturing is driving the need for these materials.
Rare Earth Recovery From Red Mud Waste
One of the selected projects is led by the Colorado School of Mines. The team plans to design, build, and operate a demonstration facility near the Gramercy alumina refinery in St. John the Baptist Parish, Louisiana. The facility will process red mud, a byproduct of alumina production.
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Red mud contains small amounts of valuable minerals, including rare earth elements. The project aims to extract rare-earth oxides from the material and refine them into rare-earth metals. By carrying out all major processing steps in a single operation, the facility will test the commercial viability of an integrated US-based rare-earth supply chain.
Several organizations will support the project. Partners include ElementUSA, Pacific Northwest National Laboratory, Principal Mineral, and Rare Earth Technologies Inc. Together, they will help develop technologies for extraction, separation, and refining.
The project is significant because red mud is produced in large quantities worldwide. Much of it is stored as industrial waste. Recovering valuable minerals from this material could create a new domestic source of critical resources while reducing waste disposal challenges.
Phoenix Tailings Targets High-Purity Rare Earth Metals
The second selected project is led by Phoenix Tailings. The company plans to construct and operate a demonstration-scale facility to produce high-purity rare earth metals from domestic industrial waste feedstocks.
The project focuses particularly on heavy rare earth elements. These materials are often harder to obtain and are essential for high-performance magnets and advanced technologies. Demonstrating a commercial production pathway for these metals could help diversify US supply sources.
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Phoenix Tailings will work with researchers from the Massachusetts Institute of Technology and the University of Minnesota. The collaboration combines industrial experience with academic expertise to improve processing methods and support future commercialization.
Unlike traditional mining projects, the facility will use waste-derived materials as feedstock. This approach seeks to recover valuable resources from existing waste streams instead of relying solely on newly mined ore. It also supports broader efforts to improve resource efficiency and reduce environmental impacts.
Why the Investment Matters
The funding will be managed through DOE’s Manufacturing Deployment Office under the Rare Earth Elements Demonstration Facility Program. The program is designed to support full-scale integrated facilities capable of extracting, separating, and refining rare earth elements within the US.
Global competition for rare minerals has intensified in recent years. Many countries are working to secure reliable supplies of materials needed for clean energy systems, electronics, transportation, and defense applications. Expanding domestic production capacity has become a strategic priority for the US.
DOE officials said recovering rare earth elements from waste materials offers an opportunity to unlock resources already present in the country. Instead of treating industrial byproducts as waste, companies can use them as valuable feedstocks for mineral production.
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The selected projects have entered the award negotiation stage. DOE emphasized that selection does not guarantee final funding, and award amounts remain subject to negotiations and further review. The department can also cancel negotiations before final agreements are completed.
These projects can demonstrate new ways to secure critical minerals from domestic sources. They also have the potential to build a stronger rare-earth supply chain that supports US manufacturing, energy security, and future technology development for years to come.
