The $500 Million Push for Domestic Battery Supply Chains

The U.S. Department of Energy recently rolled out $500 million in new grants with the goal of curbing the United States' reliance on China and other mineral-producing countries.

According to the DOE, this infusion will be allocated to seven different projects and focuses on expanding critical mineral and material processing, battery manufacturing, and recycling capacity in the U.S. U.S. Secretary of Energy Chris Wright said in a statement that 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.

He continued, stating that the ultimate goal is to bring critical materials production and processing back to the United States.

This new round of grants marks the third round of funding from the DOE's Battery Materials Processing and Battery Manufacturing and Recycling programs, which support battery materials processing, recycling, and manufacturing projects.

The programs support demonstration projects, construction of commercial scale facilities, and the retrofitting or retooling of existing facilities.

The production of advanced batteries depends heavily on critical minerals like lithium, cobalt, nickel, copper, manganese, and graphite, whose extraction and processing are predominantly under Chinese control.

Battery Technology reports that China holds approximately 94% of the market share for lithium-iron phosphate battery production capacity and provides 70% of global processed lithium production.

All told, the U.S. imports nearly three-quarters of its lithium-ion batteries from China, which holds a commanding position in the global battery supply chain.

The Council on Strategic Risk adds that China controls a substantial share of the entire value chain from upstream mineral extraction and refinement to downstream anode, cathode, and finished battery production.

Battery technology also reminds us that this dominance is becoming increasingly problematic due to the 2024 National Defense Authorization Act, which prohibits the Defense Department from procuring batteries containing Chinese source materials beginning in October 2027.

This is creating a real sense of urgency for domestic supply chain development.

According to Reuters, the U.S. Department of Energy received hundreds of applications for this third round of funding from its battery materials processing and battery manufacturing and recycling programs.

Audrey Robertson, the department's assistant secretary, said that those chosen were most promising and had the highest return for Americans in the most needed areas of the battery ecosystem.

Among the recipients is Lilac Solutions, who will receive $100 million for a direct lithium extraction processing facility on Utah's Great Salt Lake.

Reuters reports that the company expects to open the facility by 2028 and produce 5,000 metric tons per year of the metal.

Jervois, which controls a large cobalt deposit in Idaho, will also receive $100 million to build the country's only refinery for that metal, used to make batteries, electronics, and a range of weapons.

EnthCycle, a battery recycler backed by Trafigura, is receiving $100 million for a facility to process battery metal scrap known as black mass.

Reuter says the DOE is also giving $50 million each to Princeton New Energy, which reprocesses cathode battery parts, Arcanum Ventures, which makes chemicals for battery electrolytes, and Corshell Technologies, which is developing battery anodes made with silicon.

Mining Technology reports that Corshell Technologies will receive $50 million to establish U.S. manufacturing capacity for silicon anode lithium-ion electrodes and cells, replacing imported graphite with domestically sourced metallurgical silicon.

Noting that this project combines Corshell's silicon anode technology with dry-coating cathode technology and is focused on establishing the first U.S. gigafactory dedicated to silicon anode battery production.

The latest awards add to around $40 billion in provisional US government funding for mineral projects since 2022, with the funding spanning grants, loans, equity investments, and other forms of support.

Mining Technology adds that the DOE said the first two funding rounds had already awarded $1.82 billion to 14 projects covering lithium, graphite, battery components, and recycled materials.