The U.S. Department of Energy has announced up to $134 million in new federal funding aimed squarely at strengthening domestic rare earth element (REE) supply chains—a critical step in Washington’s broader campaign to reduce reliance on foreign-controlled mineral processing.
The funding, unveiled by the Department’s Office of Critical Minerals and Energy Innovation, will support projects that recover and refine rare earth elements from unconventional feedstocks, including mine tailings, electronic waste, and other industrial byproducts. The goal is not laboratory research, but commercial-scale demonstration.
Secretary of Energy Chris Wright framed the move as a course correction after decades of offshoring. According to the department, years of underinvestment enabled foreign competitors—particularly China—to dominate mining, processing, and magnet production across the rare-earth ecosystem. The new funding push aims to reverse that dynamic under the industrial policy agenda of Donald Trump’s administration.
“For too long, the United States has relied on foreign nations for the minerals and materials that power our economy,”
The initiative builds on DOE’s Rare Earth Demonstration Facility program, which is designed to establish fully integrated extraction, separation, and processing facilities on U.S. soil. It follows a Notice of Intent issued earlier this year, signaling growing urgency inside Washington over critical mineral vulnerabilities.
Why does it matter for global supply chains?
This funding marks another concrete escalation in Washington’s effort to onshore the most fragile link in the critical minerals chain—processing and refining. If successful, it could begin chipping away at China’s near-monopoly over rare earth separation, with downstream implications for clean energy, defense manufacturing, and industrial competitiveness over the next decade.