New Delhi, April 20 -- Two enormous sandlike dunes at an old chemical processing plant in South Africa are at the center of an exploratory U.S.-backed project to extract highly sought-after rare earth elements from industrial mining waste.

The Phalaborwa Rare Earths Project has U.S. support through a $50 million equity investment by the government's International Development Finance Corporation and is part of accelerated U.S. efforts to reduce reliance on economic rival China for the minerals crucial for making electronic devices, robotics, defense systems, electric vehicles and other high-tech products.

Countries have identified dozens of minerals, including copper, cobalt, lithium and nickel, as critical because they are essential for...