In a significant push to bolster domestic supply chains and reduce reliance on foreign powers, particularly China, the Trump administration has proposed nearly $1 billion in funding for the development of critical minerals and materials. Announced by the U.S. Department of Energy (DOE) on August 13, 2025, this initiative aims to accelerate mining, processing, and manufacturing technologies essential for electric vehicle (EV) batteries, semiconductors, and national security applications.
As global demand for these resources surges amid the energy transition and technological advancements, this funding could mark a turning point for U.S. energy independence.The Context: Why This Funding MattersCritical minerals—such as rare earth elements, gallium, germanium, and silicon carbide—are vital components in modern technologies. However, the U.S. has long depended on imports, with China dominating over 50% of the supply for many of these materials.
Energy Secretary Chris Wright emphasized the urgency, stating, “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.”
This proposal aligns with President Donald Trump’s executive order on maximizing energy development and complements ongoing efforts by the Department of Defense (DOD), which has already invested around $540 million in critical minerals projects.
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The funding comes at a time when geopolitical tensions and supply chain vulnerabilities are prompting a reevaluation of domestic production. With rising demand for minerals like lithium, cobalt, nickel, and copper driven by EVs, renewable energy, and AI infrastructure, the U.S. is positioning itself to capture a larger share of the global market.
How the Funding Will Be Used
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Office/Program
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Amount
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Purpose
|
|---|---|---|
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Office of Manufacturing and Energy Supply Chains (MESC)
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Up to $500 million
|
Expanding U.S. critical minerals and materials processing, battery manufacturing, and recycling to strengthen domestic supply chains.
|
|
MESC (Rare Earth Elements Focus)
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Up to $135 million
|
Supporting the domestic supply chain for rare earth elements, including demonstrating commercial viability of refining and recovering these minerals from mining tailings.
|
|
Office of Fossil Energy and Carbon Management
|
About $250 million
|
Providing financial assistance to plants, including coal facilities, for producing mineral byproducts from industrial processes.
|
|
Rare Earth Magnet Supply Chain
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Up to $50 million
|
Supporting processes like refining and alloying gallium, germanium, and silicon carbide for use in semiconductors and rare earth magnets.
|
These funds aim to foster innovation in extraction from unconventional sources, such as industrial waste, while promoting sustainable practices. By targeting areas like battery recycling and rare earth recovery, the initiative not only addresses supply shortages but also supports the broader energy sector’s shift toward cleaner technologies.
This builds on existing programs under the DOE’s Critical Minerals and Materials Program, which has previously issued funding opportunities for similar projects.
Investor Opportunities: Capitalizing on the Critical Minerals Boom
For investors, this funding proposal represents a golden opportunity to tap into the growing critical minerals sector. Government support could provide grants, loans, or partnerships that accelerate project development, reduce risks, and enhance profitability for companies involved in mining, processing, and recycling. With the global critical minerals market projected to surge due to energy and tech demands, stocks in this space may see upward momentum.
Here are some U.S.-focused companies that could benefit, based on their operations in key minerals and potential alignment with federal funding:
MP Materials (NYSE: MP): As the operator of the only active rare earth mine in the U.S. (Mountain Pass, California), MP is already a prime beneficiary of government initiatives. The DOD recently acquired a direct equity stake, making it the largest shareholder, and has invested in its magnet production facilities. This positions MP to potentially access DOE funds for rare earth processing and supply chain expansion.
Analysts from Morgan Stanley have upgraded the stock, citing strong upside in rare earths.
Albemarle Corporation (NYSE: ALB): A leading lithium producer with U.S. operations, Albemarle could leverage funding for battery materials and recycling. As lithium demand grows for EVs, the company’s scale and domestic projects make it a top pick for investors eyeing the energy transition.
Energy Fuels Inc. (NYSE: UUUU): Focused on uranium and rare earth elements, this company has U.S.-based assets and is expanding into critical minerals recovery. Its involvement in alternative extraction methods, like from mining tailings, aligns directly with the proposed $135 million for rare earths.
Piedmont Lithium (NASDAQ: PLL): Developing lithium projects in North Carolina, Piedmont stands to gain from domestic battery supply chain incentives. The funding’s emphasis on processing and manufacturing could support its growth in the EV sector.
American Resources Corporation (NASDAQ: AREC): Specializing in rare earth elements and critical minerals from coal byproducts, AREC could benefit from the $250 million allocated to fossil energy plants for mineral production. This innovative approach fits the proposal’s focus on industrial waste recovery.
Investors should consider exchange-traded funds (ETFs) like the Sprott Energy Transition Materials ETF (SETM), which provides diversified exposure to critical minerals stocks.
However, the sector carries risks, including regulatory hurdles, commodity price volatility, and environmental concerns.
Tax incentives or insurance funds proposed by the administration could further de-risk investments.
Looking AheadThis $1 billion proposal underscores the U.S. commitment to securing critical minerals amid a competitive global landscape. For the energy sector, it promises enhanced innovation and resilience. Investors eyeing long-term growth should monitor how these funds are disbursed, as they could catalyze significant value in domestic companies. Stay tuned to Energy News Beat for updates on this developing story.
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