US Energy Department Awards $500 Million to Seven Domestic Battery and Critical Mineral Projects

The US Department of Energy has awarded $500 million to seven projects spanning lithium extraction, cobalt refining, and battery recycling, marking the third round of federal grants aimed at onshore critical mineral production. The funding, announced on August 20, 2026, directs capital toward the midstream and downstream segments of the battery supply chain.[1][3]

Rather than focusing on new hardrock mining, the grants target chemical refining and the recovery of materials from end-of-life batteries. The selections are split across two programs funded by the 2021 Bipartisan Infrastructure Law: $200 million for battery materials processing and $300 million for manufacturing and recycling.[3]

"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," Energy Secretary Chris Wright said in the announcement. The grants align with the Trump administration's "Unleashing American Energy" executive order, which emphasizes reducing reliance on foreign entities.[3]

Two projects received $100 million each under the upstream processing program. Waterleaf P1 HoldCo, a Lilac Solutions company, plans to build a commercial lithium extraction facility on the Great Salt Lake in Utah. The project aims to double current US lithium output while returning processed brine to the lake with no net water loss.[1][3]

The second $100 million upstream grant went to Formation Holdings US, operating as Jervois, which will construct a commercial cobalt refinery. The facility is designed to produce battery-grade cobalt sulfate, a critical input for lithium-ion cathodes that is currently processed almost entirely overseas.[2][3]

Five projects were selected for manufacturing and recycling grants. Nth Cycle was awarded $100 million to build a facility in the Southeastern US that will refine up to 24,000 metric tons of "black mass"—the shredded remains of spent lithium-ion batteries—into high-purity metals annually.[1][4]

Princeton NuEnergy will receive $50 million for a demonstration plant in Commerce, Georgia. The $110 million closed-loop facility will use low-temperature plasma to recover nickel from cathode scrap, a process the company states can reduce the cost of manufacturing new batteries by roughly 45 percent compared to using virgin material.[1][3]

Additional $50 million grants went to Arcanum Ventures for an ethylene carbonate plant on the Gulf Coast, and Elevated Materials for ultra-thin lithium-metal films. Coreshell Technologies also received $50 million for a silicon-anode manufacturing facility in San Leandro, California, which will replace imported graphite with domestically sourced metallurgical silicon.[2][3]

The focus on domestic recycling coincides with a new federal one-year export ban on black mass that took effect on August 27, 2026. By keeping battery scrap within the country, the government intends to feed these newly funded domestic refineries, creating a closed-loop supply chain for the next generation of energy infrastructure.[1][4]