Jay Shidler, Director of Business Recruitment, Oklahoma Department of Commerce, emphasises the case for strengthening domestic processing and manufacturing, as part of larger critical-mineral supply chain efforts.
As the US looks to put a greater emphasis on strengthening the country’s critical-mineral supply chains, it is important that America’s strategy goes beyond the mine. Those efforts cannot stop at what comes out of the ground: the US also needs processing and manufacturing capabilities to turn materials into products here at home.
When mining critical-minerals – such as lithium, copper, or graphite – those materials often need to be separated, purified, refined, and converted into chemical compounds before they can be used in products, such as batteries and semiconductor chips. Having that process happen in the US not only greatly reduces the need to outsource domestically-extracted materials to a foreign country, but also helps streamline the process from raw minerals to components and then the finished product.
As questions of how to build greater resilience across this critical supply chain are considered, developing these capabilities domestically will be an important part of the equation. States with the resources, infrastructure, workforce, and industrial capacity will have an opportunity to contribute to broader national efforts across the US. Oklahoma is one example, but the larger opportunity is strengthening the nation’s critical-mineral supply chain as a whole.
What a domestic supply chain can look like
When it comes to how America’s domestic supply chain for minerals should expand beyond the mine, the development of processing and advanced manufacturing capabilities offers a useful example of what that supply chain can look like in practice.
Oklahoma provides a great case study. The state’s growing role in advanced manufacturing and mineral processing demonstrates how different stages of the supply chain can begin to take shape within the US.
For example, USA Rare Earth recently commissioned the first phase of magnet production at its 310 000 ft2 rare earth manufacturing facility in Stillwater. The facility represents one example of onshoring downstream rare-earth processing and manufacturing capabilities.
Stardust Power is also planning a major US$500 million battery-grade lithium carbonate refinery in Muskogee that is designed to produce up to 50 000 tpy of lithium, aiming to support domestic supply chains for EV batteries.
Recycling is another important part of building that capacity. Green Li-ion’s battery-recycling facility in Atoka currently serves as North America’s first commercial-scale plant that allows the conversion of spent battery ‘black mass’ directly into battery-grade precursor cathode active material.
Other critical minerals demonstrate the importance of domestic refining and recycling capabilities. Oklahoma houses Umicore’s Electro-Optic Materials site, a global leader in the refining, recycling, and supply of germanium used in fiber optics, medical diagnostic equipment, and surveillance equipment that cannot be mined as a primary commodity. Umicore has continued to invest in their US expansion in the past year, giving the US greater access to the materials after China imposed an export control regime on germanium and gallium being sent to the US.
When it comes to resources already at home, Oklahoma’s thousands of mining-related employees would bring experience in drilling, chemical processing, industrial maintenance, and engineering – all skills that can transfer to mineral processing and ensuring a greater capacity of domestic materials. A mix of energy resources, industrial infrastructure, manufacturing capabilities, and workforce skills can also help potentially attract downstream rare earth manufacturing.
The challenges to creating a greater supply
With every new expansion comes the issue of costs. Separation and refining of the materials represent a major share of the total mine-to-product costs, as rare earths contain multiple elements that must be separated through highly complicated processes. Mining, crushing, milling, and chemical processing of these materials can also be energy and water-intensive, adding higher operating and capital costs. Oklahoma has some of the cheapest energy process in the country.
Rare earth projects also often face a ‘financing gap’, as developers must invest heavily in exploration, technology, and facilities before proving their performance. That means customers may hesitate to commit to long-term purchases until production has been demonstrated, but with Oklahoma having some of the lowest costs nationwide of doing business, it makes the state more attractive for that investment.
There is also the issue of infrastructure: a solid project needs more than access to a mineral resource, but also reliable water and electricity, road and rail connections, access to waste and tailings management infrastructure, as well as access to downstream processors and customers to help move materials through multiple stages of the supply chain. Oklahoma just so happens to be home to the furthest inland ice-free port.
Rare earth mining and processing also requires a very technical workforce of geologists, exploration specialists, mining engineers, and heavy-equipment operators that are often scarce outside of well-established rare earth production hubs. Workforce development may require partnering with universities, local trade schools, or even national laboratories to build up that workforce, all things Oklahoma is already doing.
The goal: Greater domestic capacity
The US needs an entire rare-earth value chain, not just mines. America will remain vulnerable if most refining capacity remains heavily focused abroad. If the US only extracts critical materials but sends them overseas, much of the economic value, manufacturing capability, and even strategic control of those materials would remain outside of the country.
But while it is in America’s best interest to expand its domestic capacity of rare earth minerals, the US will continue to benefit from international trade with different countries possess different geological resources, and efforts to source every mineral and perform every stage of production domestically would be expensive, inefficient, and unrealistic.
That broader approach is already taking shape in places such as Oklahoma, where investments across different stages of the mineral supply chain offer one example of how domestic capacity can develop. The opportunity is not simply to produce more minerals, but to strengthen the connections between the resources, infrastructure, workforce, and industries needed to turn those materials into finished products.
Image details
Rendering of Stardust Power’s new lithium carbonate refinery in Muskogee (Source: Oklahoma Department of Commerce).
Author bio
Jay Shidler is the Director of Business Recruitment at the Oklahoma Department of Commerce, where he works with companies, both in-state and out-of-state as well as internationally, to increase jobs and investment in Oklahoma. He also acts as the main liaison for interested parties to bring new economic opportunities to Oklahoma.?Shidler was also appointed to the Board of Directors of the Export-Import Bank of the US earlier this year.