DOE Announces $355 Million Funding to Boost Domestic Critical Material Production

The U.S. Department of Energy has released two new funding opportunities totaling $355 million to support domestic production of minerals and materials considered essential to energy systems, manufacturing, transportation, and national defense. The programs, administered by DOE’s Office of Fossil Energy, are intended to expand U.S. capacity to recover critical materials from industrial byproducts and to test emerging mining technologies in real-world environments.

The announcement follows DOE’s earlier statement of intent to invest up to $1 billion in projects that strengthen domestic mining and processing capabilities. Federal officials say the new funding opportunities are designed to reduce reliance on foreign suppliers and support U.S.-based supply chains for high-value materials important to the energy transition and industrial competitiveness.

Two Funding Tracks

The larger funding opportunity—up to $275 million—targets U.S. industrial facilities capable of producing critical materials from coal-based resources as well as from industrial byproducts and waste streams. DOE aims to support the design, construction, and operation of pilot-scale projects that can demonstrate the viability of extracting market-ready materials from existing infrastructure and industrial processes. The agency said successful projects could help reduce waste while enabling new domestic sources of minerals needed across multiple sectors.

A second funding opportunity provides up to $80 million to establish “Mine of the Future” proving grounds. These field sites would allow mining companies, researchers, and technology developers to test next-generation mining systems outside of laboratory settings. DOE intends the initiative to help accelerate commercialization of advanced mining technologies and support training for workers who will operate these systems.

Industry Impact

Critical minerals such as rare earth elements, lithium, cobalt, and other specialty materials are used in electric motors, batteries, renewable energy systems, semiconductors, and a wide range of industrial equipment. Supply constraints and geopolitical risks have pushed federal agencies and private companies to explore new domestic sources and production methods.

For commercial and industrial energy users, DOE’s programs could help diversify supply chains for components dependent on these materials, potentially improving long-term availability and reducing exposure to supply disruptions.

Applications for both funding opportunities are due Dec. 15, 2025, at 5 p.m. ET.