(The Center Square) – The U.S. Department of Energy awarded $67 million in funding to ElementUSA and its partner the Colorado School of Mines for the construction and operation of a demonstration plant designed to extract and process rare earth elements from alumina tailings stored at the Atalco Alumina refinery near New Orleans.
The project in Gramercy, Louisiana, is one of two announced Monday by the department’s Office of Critical Minerals and Energy Innovation for the construction and operation of a rare earth element facility capable of separating and refining critical metals.
A project managed by Phoenix Tailings in Ardmore, Oklahoma, will receive a separate $67 million in funding to convert domestic industrial waste into high-purity rare earth metals in partnership with the Massachusetts Institute of Technology.
Previously, Texas-based ElementUSA received a Department of Defense grant of $29.9 million to fund gallium and scandium extraction at the same Gramercy plant. This November 2025 grant funds the development of critical minerals production for use in manufacturing military hardware, semiconductors, missile defense systems, and other U.S. security needs.
The awards support the Trump administration’s goal of increasing the production of processed critical minerals, as established in Executive Order 14241, which mandated immediate measures to boost domestic mineral output.
The Federal grant announced Monday is designed to support commercial-scale production of critical metals praseodymium, neodymium, terbium, and dysprosium-vital components in advanced manufacturing, defense systems, and the high-performance magnets used in power generation and electric motors.
In December 2025, ElementUSA announced an $850 million investment to build a full-scale critical minerals refinery at the Gramercy site. Unlike traditional facilities that perform only one stage of production, this integrated plant will handle extraction, chemical separation, and high-purity metallic refining under a single roof.
As the only operational alumina refinery left in the United States, the Atalco facility ensures a steady, long-term supply of raw bauxite tailings for the Gramercy project.
More than 30 million dry tons of bauxite residue are already stored at that site, with roughly another 1 million tons produced on an annual basis, according to information about the project on ElementUSA’s website. By converting the corrosive, highly alkaline material into marketable tech minerals, the ElementUSA project could remediate a local environmental liability while establishing a domestic rare earth supply chain, the company said.
In March 2025, a Louisiana Department of Environmental Quality report found the Atalco site had more than 20 enforcement violations after toxic red mud breached containment levees and spilled onto neighboring properties. In May 2025, Louisiana State University scientists studying the area warned that unlined open-air pits at the refinery pose a significant threat of heavy metals leaching directly into regional soils and groundwater.
“Adding Burnside to our portfolio of bauxite residue sites from which to remediate and extract valuable minerals is a major milestone in the growth of ElementUSA,” said Joe Carrabba, the company’s CEO. “We aspire to be a multisite business with the capabilities to clean up bauxite residue deposits around the globe and provide the market with a suite of strategic minerals produced in an environmentally friendly process,” Carrabba said in a release.
According to Louisiana Economic Development, the Gramercy expansion will support 200 direct advanced manufacturing jobs averaging $90,000 annually, plus 554 indirect positions. To secure the project, the state provided an incentive package featuring a $6 million performance-based infrastructure grant, custom workforce recruitment via LED FastStart, and eligibility for the state’s Quality Jobs and Industrial Tax Exemption programs.