The largest US coal producer was selected for federal funding to evaluate extracting rare earths, the metals in EVs and defense electronics, from the Powder River Basin, an unproven pathway.
Rare earth elements are a small set of metals that go into electric vehicle motors, missile guidance systems, phone screens, and wind turbine generators. The US imports the great majority of them, and China dominates much of the global processing market. The Department of Energy is trying to close that supply gap by funding unusual extraction routes, including one run by a major US coal producer in Wyoming.
Peabody Energy, the country's largest coal miner by volume, was selected by the DOE to receive funding aimed at recovering rare earth elements and other critical minerals from coal-related resources in the Powder River Basin, the company said in a press release. The award is part of a broader $75 million DOE program run by the Office of Critical Minerals and Energy Innovation. Peabody's individual share of that program is not disclosed in the current public materials.
The proposal rests on a simple claim: Peabody already moves more earth in the Powder River Basin than any other US coal producer, and that material contains trace amounts of rare earths and related minerals. The company calls this a built-in advantage. Critics note that trace occurrence is not the same as commercially recoverable supply, and that no US operator has yet demonstrated rare earth recovery from coal-related resources at commercial scale.
The technology in question is distinct from conventional mining. "Coal-related resources" can mean coal ash from power plants, mine waste, acid mine drainage, and the coal-bearing rock formations themselves. Each pathway requires a different separation chemistry, and each has produced different results in laboratory and pilot settings. The DOE funding is intended to evaluate which of these routes can be made to work economically at Powder River Basin scale, where most of the feedstocks would not be the coal itself but rock and waste moved incidentally during coal production.
Earlier in 2026, Peabody received a separate grant from the Wyoming Energy Authority for the same initiative, and the Powder River Basin cluster has also drawn $12 million in state Energy Matching Funds for related projects, according to the Gillette News Record. The sequencing, state then federal, suggests a coordinated push to test whether Wyoming's coal infrastructure can be repurposed for a different mineral economy, one in which the same trucks, crushers, and workforce end up producing different materials.
Peabody's pitch is that this would diversify the company beyond thermal coal, which faces declining domestic demand from US power plants. President and CEO Jim Grech framed the DOE award as progress toward demonstrating that recovering critical minerals from coal-related resources is both technically and economically feasible. That feasibility remains an open question. Independent technical literature on the economics of rare earth extraction from coal ash and related feedstocks has produced mixed results, with cost and recovery rates that vary sharply by feedstock and process.
The DOE's $75 million program is funding multiple projects across different extraction pathways, including ones unrelated to coal. Peabody is one recipient among several, and the program is structured around evaluation milestones rather than commercial production targets. In the near term, the money is funding feasibility work and pilot data. The first public measure of whether the coal-to-rare-earths pathway holds up will come from those program milestone reports, not from further press releases.