U.S. Energy Department to Pump Nearly $1 Billion into Critical Minerals

Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Department of Energy (DOE) plans to send out notices of funding opportunities, totaling nearly $1 billion in value, aimed at boosting the domestic supply of critical minerals.

"For too long, the United States has relied on foreign actors to supply and process the critical materials that are essential to modern life and our national security," U.S. Secretary of Energy Chris Wright said in Wednesday's announcement. The announcement comes on the heels of news reports that China is still limiting the flow of critical minerals to Western defense manufacturers.

According to the U.S. Geological Survey (USGS), the Energy Act of 2020 defined critical minerals as those that are essential to the economic or national security of the United States; have a supply chain that is vulnerable to disruption; and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the U.S.

The biggest chunk of the DOE funding ($500 million) would be used to expand the processing and recycling of minerals from batteries via demonstration or commercial facilities. These include minerals such as lithium, graphite, nickel, copper, aluminum and others. Award recipients would be required to pay for at least 50% of the cost.

Meanwhile, the DOE's Office of Fossil Energy and Carbon Management plans to offer about $250 million in financial assistance to facilities that can produce critical mineral byproducts from existing industrial processes. This would apply to industry at large and the coal-based industry.

The Office of Manufacturing and Energy Supply Chains (MESC) plans to issue a notice for up to $135 million to help fund a demonstration project, or projects, to show the commercial viability of refining and recovering rare earth elements from mine tailings, "deleterious material" and waste streams.

China currently controls about 90% of global rare earth production, according to various reports. The USGS says multiple studies have found critical minerals are often left behind in legacy mining operations. For more on that, see July 28, 2025, article - USGS Finds Critical Minerals Left in Legacy Mining Operations.

As much as $50 million would be earmarked for the Critical Minerals and Materials Accelerator Program, which promotes technology designed to unlock capital investments and domestic commercialization of things like the rare earth magnet supply chain, the refining of gallium and other minerals, and cost-competitive technologies for direct lithium extraction.

Also, the Advanced Research Projects Agency-Energy (ARPA-E) plans to announce project selections for its $40 million program to develop technologies to recover critical minerals from industrial wastewater early this fall.

The Wall Street Journal recently reported that China is limiting the flow of critical minerals to Western defense manufacturers, delaying production and forcing companies to scour the world for stockpiles of the minerals. The new restrictions come despite trade concessions made with the U.S.

The Trump administration has invoked the Defense Production Act, aiming to accelerate domestic production and reduce dependence on Chinese processing.

The U.S. isn't the only country now seeking to diversify its supplies of critical minerals away from China. In June, the European Commission issued a list of 13 strategic projects across the globe that have been chosen to receive financial backing. The 13 new projects complement an initial list of 47 strategic projects announced by the European Union in April. For more on that, see June 17, 2025, article - EU to Support 13 Critical Minerals Projects.

During a recent forum at Rice University's Baker Institute for Public Policy, Dr. Michelle Michot Foss said China's dominance of minerals supply chains "happened because of the choices we made. When our market shares shrunk because of our consolidations and dismantling of facilities here, the Chinese were industrializing. What do you think happens? You wake up one day and you were 40% of the finished aluminum market, and now you are 2% and China is 50%."

For more information on the forum, see June 19, 2025, article - Minerals, Metals & Mining -- Forum Explains Why These are a Big Deal.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).