US Commits $500 Million to Onshore Critical Mineral and Battery Supply Chains

The common assumption about the U.S. energy transition is that it simply trades a reliance on foreign oil for a reliance on foreign minerals. While the raw materials for advanced batteries are indeed often mined abroad, the more acute vulnerability lies squarely in the middle of the supply chain: the highly specialized processing and refining of those raw minerals into usable, battery-grade components. Securing domestic sources of critical minerals is only part of the challenge facing American supply chains; those materials must also be refined and manufactured into usable forms before they can reach end markets across the energy, industrial, and national security sectors.[3]

To address this critical bottleneck, the U.S. Department of Energy awarded $500 million in grants on August 20, 2026, targeting seven projects that will significantly expand domestic capacity for critical mineral processing, battery manufacturing, and recycling. The funding, administered through the newly realigned Office of Critical Minerals and Energy Innovation, is part of a broader federal push to onshore the industrial base required for modern energy and defense technologies. By injecting capital directly into the middle of the supply chain, the government hopes to ensure that resources essential to the American economy are handled within the United States rather than relying heavily on foreign processing hubs.[1][2]

"For too long, America has depended on foreign actors for critical materials essential to modern life that underpin our economy, energy security, and national security," said U.S. Secretary of Energy Chris Wright in a public statement announcing the awards. The initiative, framed under the "Unleashing American Energy" executive order, aims to maximize domestic supply chains while fortifying national economic and military interests. Federal officials have repeatedly emphasized that expanding domestic processing, manufacturing, and recycling capacity is a foundational step toward reversing decades of offshoring and securing the critical supply chains necessary to power the nation's future infrastructure.[1][2][4]

The grants are strategically divided into two funding tiers to support projects at different stages of commercialization: three $100 million awards for large-scale commercial facilities, and four $50 million awards for pilot demonstrations, facility retrofits, and specialized manufacturing. These selected projects focus heavily on lithium and cobalt, two of the most critical elements in modern lithium-ion battery chemistries, while also addressing the need for advanced recycling techniques. By supporting a mix of raw material processing and end-of-life recovery, the funding targets the entire lifecycle of battery production to build a more resilient and self-sustaining domestic ecosystem.[2][3][7]

Among the largest grant recipients is Lilac Solutions, operating through its subsidiary Waterleaf P1 HoldCo, which will use its $100 million federal share to build a commercial lithium extraction and refining facility on the northeastern shore of Utah's Great Salt Lake. The plant is designed to produce battery-grade lithium carbonate using advanced direct lithium extraction technology, returning the processed brine to the lake with no net water loss. Department of Energy officials noted that the first phase of this project alone aims to double current U.S. lithium production, establishing a massive foundation for future expansion in the domestic market.[6][7]

Another $100 million grant was awarded to Formation Holdings US, operating under the name Jervois, to construct a commercial-scale cobalt refinery at a selected industrial site. The facility will produce battery-grade cobalt sulfate using proven refining technology, establishing a much-needed domestic processing capability for a metal that is heavily utilized in electronics, electric vehicle batteries, and advanced defense applications. Currently, the United States lacks significant domestic cobalt refining infrastructure, making this project a critical addition to the nation's industrial base and a direct countermeasure against foreign market dominance in the cobalt supply chain.[2][6][7]

The third $100 million recipient, Nth Cycle, will focus entirely on the recycling end of the battery lifecycle. The company plans to build a major facility in the southeastern United States that refines "black mass"—the crushed, mineral-rich remnants of end-of-life lithium-ion batteries and manufacturing scrap—into high-purity metals and battery-grade materials. Utilizing the company's proprietary electro-extraction platform, the project aims to recover valuable materials without the heavy emissions associated with traditional smelting, creating a domestic source of critical minerals that does not require new mining operations.[2][6]

The $50 million funding tier targets specialized downstream components that are equally vital to battery performance. Coreshell Technologies will establish a gigafactory in San Leandro, California, dedicated to manufacturing silicon-anode lithium-ion electrodes and cells. By using domestically sourced metallurgical silicon in place of imported graphite, the project aims to bypass a major supply chain choke point while simultaneously improving battery energy density. The facility will pair these advanced silicon-anode designs with dry-coating cathode technology to scale pilot-level innovations up to full gigawatt-hour production capacity.[3][6]

Other $50 million recipients include Princeton NuEnergy, which will build a demonstration facility in Commerce, Georgia, to recover and rejuvenate nickel-containing cathode material from battery manufacturing scrap using an innovative low-temperature plasma process. Meanwhile, Elevated Materials will scale its pilot technology to produce ultra-thin lithium-metal films and pre-lithiated materials for higher-energy, faster-charging batteries at a new U.S. facility. Rounding out the awards, an unnamed project will receive $50 million to build a Gulf Coast facility that produces battery-grade ethylene carbonate, a key chemical ingredient in lithium-ion battery electrolytes that integrates with existing domestic manufacturing infrastructure.[2][6]

The latest awards mark the third round of funding under the Department of Energy's Battery Materials Processing and Battery Manufacturing and Recycling programs, which were originally authorized under the bipartisan Infrastructure Investment and Jobs Act. Across the first two rounds, which began in October 2022 and continued through September 2024, the department awarded grants to 39 different projects. Together with this third round, the programs represent nearly $5 billion in federal grants, which have successfully catalyzed roughly $16 billion in combined public and private investment across the entire domestic battery ecosystem.[3][5]

While global demand for battery materials continues to grow exponentially, much of the world's processing capacity remains heavily concentrated in China, leaving Western supply chains highly exposed to geopolitical friction. By deliberately targeting the middle and downstream stages of the supply chain—where raw feedstocks are refined into battery-grade products and fed into component manufacturing—the United States is attempting to build a resilient, closed-loop system. If successful, these investments will ensure that the critical materials required to support the rapid growth of grid-scale energy storage and advanced manufacturing are processed, manufactured, and recovered entirely within American borders.[3][5][7]