U.S. Energy Secretary Steven Chu said the plans would help fund an Energy Innovation Hub, a multidisciplinary effort aimed in advancing research in electric vehicles and other alternatives that rely on rare earth elements and so-called critical materials.
"We must ensure America's entrepreneurs and manufacturers continue to have access to these critical materials so we can compete in the global energy economy," he said in a statement.
The U.S. Geological Survey said the United States is 100 percent dependent on foreign sources for rare earth minerals. It added there may be deposits in 14 U.S. states. The minerals are used in industries from agriculture to renewable energy.
The Energy Department said activities at the hub could reduce U.S. dependence on critical materials.
"Our success will be crucial to ensuring we can continue producing the advanced energy technologies that will power our economy long into the future," said Chu.
At least 95 percent of the rare earth minerals on the world market come from China.