The U.S. is starting to make waves and change landscapes across the critical minerals space.
On more than one occasion, President Donald Trump has employed the stroke of a pen to set the U.S. on a path to potentially transform how it sources and produces critical materials, with the aim of reducing its reliance on foreign countries and loosening China鈥檚 grip on the global supply chain.
Why does it matter? Critical minerals鈥攕uch as lithium, cobalt, nickel, graphite and other rare earth materials鈥攅ssentially serve as basic building blocks for clean energy technologies such as energy storage systems, batteries and wind turbines. However, they are also essential for their roles in aerospace, health care and national defense, where they are used in radar, sonar and laser guidance systems, among other uses.
Heavy reliance on other nations for such materials creates a risk to U.S. national security and economic stability, opening the door to supply chain vulnerability prompted by political instability and trade disruptions, experts say.
The aerospace, electronics and construction industries together represent about $4.08 trillion in value, or nearly one-seventh of the U.S. economy, according to the U.S. Geological Survey (USGS).
The U.S. possesses abundant reserves of some critical minerals; however, domestic mining had not been prioritized鈥攗ntil now鈥攁s regulatory and environmental concerns have slowed progress. Prices for some critical minerals also have fallen in the last year due to oversupply by dominant producers, including China.
The U.S. in 2024 was completely reliant on imports for a dozen of the 50 minerals listed on the U.S. critical minerals list, and more than 50% reliant on imports for 28, USGS data show. Natural graphite, a heat-resistant material used in solar panels and lithium-ion batteries, and manganese, which is also used to make batteries, was on the list.
The Trump administration has set out to change that dependency, with the president having signed executive orders to increase mineral production. Among the focus areas is expediting federal project reviews. Efforts target minerals on land and sea, and include various production methods, such as direct lithium extraction and deep-sea mining.
鈥淭his administration has been highly supportive of development of domestic supply chains of lithium and critical minerals,鈥� Standard Lithium CEO David Park told Oil and Gas Investor. 鈥淲e鈥檝e learned that whether you believe in energy transition or energy addition, whether you wear a red tie or whether you wear a blue tie, everyone seems to agree that ensuring a domestic supply of lithium and other critical minerals is vitally important to national security and economic prosperity.鈥�
But turning that potential into production won鈥檛 be easy. Emerging technologies still face commercial and regulatory hurdles. Deep-sea mining also faces some stiff opposition from environmentalists. Plus, some experts warn that refining and processing capacity must not be forgotten鈥攁s China dominates that space as well.
鈥淐hina has been working to build up their capacity to collect nodules and use deep-sea mining to, frankly, disintermediate many of the countries with whom they鈥檙e dependent for feedstock,鈥� Craig Shesky, CFO for The Metals Company (TMC), told OGI. 鈥淲e鈥檝e also seen China start to use deep-sea mining as a carrot to bring into the fold some Pacific Island nations, such as the Cook Islands and Kiribati, both of which are exploring deep-sea mineral exploration agreements with China,鈥� with the offer of help to build up their economies as the U.S. watches.
The U.S. is aware and wary of ceding this area of competition to China, especially when a U.S. entity鈥擳MC鈥攊s a global leader in development of this technology, Shesky added. 鈥淚t would be a shame, I think, of the U.S. to give up that lead, and certainly this administration shows no intention of doing so.鈥�
Diving deep
About 4,000 meters below the ocean鈥檚 surface, roughly the length of the Hollywood Walk of Fame or the Daytona International Speedway, rock-like deposits sit on the seafloor of the Pacific Ocean between Hawaii and Mexico. The polymetallic nodules, which resemble potatoes in size, are rich in copper, cobalt, manganese, nickel, zinc and other rare earth elements. The metals are used for electrical systems, rechargeable batteries and electronics.
TMC said in late April it submitted applications for a commercial recovery permit and two exploration licenses under the Deep Seabed Hard Mineral Resources Act and National Oceanic and Atmospheric Administration (NOAA). More than a decade of scientific research, environmental data collection and proven offshore engineering has paved a path for responsible development of deep-sea critical minerals, the company said. The commercial recovery permit application covers a proposed 25,160-sq-km area. The area, along with other exploration areas, is believed to contain nodules that hold an estimated 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2 million tonnes of cobalt and 345 million tonnes of manganese, according to TMC.
鈥淲e are only looking to collect polymetallic nodules that are loosely attached to the seafloor and can be collected without any digging or blasting or drilling. No deforestation, no tailings, nearly zero solid waste,鈥� Shesky said. 鈥淎nd over the areas with which we applied for exploration, we have SEC compliant and Canadian compliant resource statements indicating a resource of 1.6 billion tons of polymetallic nodules.鈥�
TMC said that could meet 81 years of current U.S. consumption of nickel, 165 years of cobalt and 456 years of manganese. 鈥淭his is a solution that takes the U.S. from total import dependency on these three critical metals to total self-sufficiency in all three for many, many decades to come,鈥� he said. TMC鈥檚 main partner is Allseas, which acquired and converted a former ultra-deepwater drillship to serve as a nodule collection vessel.
The executive order for seabed minerals calls on U.S. agencies, including NOAA and the Interior Department, among others, to expedite deep-sea mining permits, produce a report exploring opportunities for the private sector to explore and develop the minerals; devise a mineral map with priority areas; and set up an expedited permit approval process and leases for exploration, development and production.
The order also includes a directive to evaluate use of the National Defense Stockpile to store minerals and enter offtake agreements along with a mandate to explore use of grants, loans and the Defense Production Act to advance seabed mineral development.
鈥淭his [seabed minerals] executive order for us is truly a watershed moment for the U.S. to return, frankly, to leadership in the space of seafloor minerals where back in the 1979s and 鈥�80s it was NOAA that pioneered much of the environmental work in this space,鈥� Shesky said.
At that time, NOAA pioneered collection technology, conducted deep-sea mining tests with companies that included Lockheed Martin and U.S. Steel, and issued exploration licenses under the Deep Seabed Hard Mineral Resources Act. The Clarion-Clipperton Zone was an area of focus for NOAA. The zone is also a focus area for TMC today.
鈥淭he U.S. has always been the leader in this space, and we feel this executive order reminds the world that the U.S. is ready to return to that seat,鈥� Shesky said.
The International Seabed Authority is the primary international body established under the 1982 United Nations Convention on the Law of the Sea to regulate seabed mining activity. However, the ISA has been working on its mining code since 2014. It鈥檚 still a work in progress.
TMC on its website described the nodules as the 鈥渃leanest source of critical base metals鈥� and deepsea mining supporters claim it will be less destructive than mining on land, including in rainforests. However, opponents say seabed mining could harm or disrupt marine ecosystems. Impacts include creation of plumes that could disrupt the feeding, breathing, communication and buoyancy of inhabiting species and stir up sediment that could drift and potentially smother or kill filter feeders and other deep-sea species, according to U.S. House subcommittee testimony from Duncan Currie, legal advisor for the Deep Sea Conservation Center. He also mentioned the impact removing nodules could have on species that attach themselves to the surface of nodules or use them as shelter, and the noise and light pollution that could impact marine life.
For now, the environmental impact of commercial mining is uncertain because it hasn鈥檛 been done.
In testimony before the subcommittee of the U.S. House of Representatives鈥� Natural Resources Committee, Massachusetts Institute of Technology professor Thomas Peacock compared the plume to a dust cloud stirred up behind a vehicle driving down a dusty road. Peacock was involved in studies involving technology tests in 2021-2022 and said that only about the first 2 inches of ocean floor sediment was suspended into the water column, less than the 6- to 12-inches hypothesized.
鈥淩ather than all the suspended sediment forming a plume, 92-98% of the sediment was either deposited on the seabed within around 300 feet of the mining tracks or remained suspended in the water column less than 2 feet above the seabed,鈥� Peacock said. He added that a 鈥減atchwork of protected areas鈥� will be needed in the Clarion-Clipperton Zone for effective environmental management. Between 6,000 and 8,000 biological species have been identified in the zone, but fewer than 500 have been given scientific names, according to his testimony.
Shesky said that TMC has spent more than $200 million on environmental assessments and made its findings available publicly. TMC has already proved it can collect the nodules at scale, but Shesky said the company is considering the collection weights鈥攂eing cautious to get the buoyancy right to avoid sinking too far into the clay-like sea floor.
Assuming it obtains permits in 2026, TMC aims to begin commercial production in 2027. It already has an offtake agreement in place with Glencore for half of the nickel and copper from its NORI exploration contract area near the Republic of Nauru.
鈥淭here are possibilities to accelerate that [timeline], but we want to ensure that going through this NOAA process, there is going to be stakeholder consultations, public comment periods, and those are elements in the application that we want to be as robust as possible,鈥� Shesky said. 鈥淲e鈥檙e very excited to have this new, more clear path forward from a regulator, frankly, that has more experience and deep-sea ocean research than any other agency on the planet.鈥�
Small company, big ambitions
Beside the controversial and headline-grabbing push for deepsea mining lies a quieter opportunity. It is one that has gained backing from some of the world鈥檚 biggest oil and gas players. One that could revolutionize how the U.S. sources lithium domestically. And one that could give rise to environmentally friendly extraction methods that use proven technology.
The direct lithium extraction (DLE) method, unlike traditional hard-rock mining or large-scale brine evaporation, boasts a smaller land footprint and less water use. If the policy momentum behind Trump鈥檚 orders translates into fast-tracked permits and a streamlined regulatory process, executives at DLE-focused companies say the U.S. could leap into a more sustainable phase of mineral development, and do so at a lower cost with minimal environmental impact.
Standard鈥檚 Park sees DLE as a more socially acceptable pathway to large-scale lithium production in the U.S. The company operates in Arkansas鈥� Smackover region, an area with deep oil and gas roots, a more than 60-year history for brine extraction and longtime pulp and paper operations.
鈥淭he community understands the nature of the operations. They understand the benefits of the operations and they understand the trade-offs involved. And because of that, combined with our investment and dialog with the community, I think we are very well positioned here,鈥� Park said. 鈥淥verall, DLE has a lighter footprint than open pit mining or than large evaporation ponds that you would see in South America or other places.鈥�
Standard Lithium鈥檚 joint venture with Norway-based oil producer Equinor, called Smackover Lithium, aims to produce battery-grade lithium carbonate from lithium-rich brine in the Smackover Formation using Li-Pro Lithium Selective Sorption technology supplied by Koch Technology Solutions. The project, called South West Arkansas (SWA), is on track for full commercial production by 2028, following what Park called a successful winter exploration program that further delineated and defined the natural resource.
鈥淲e had fuel testing work go on this winter, as well, further proving up our DLE technology. We are advancing front-end engineering and design. That should be complete by [the middle of] this year,鈥� Park said. 鈥淲e鈥檙e in parallel in advanced discussions with 鈥� potential buyers of lithium and all our work streams are working toward what we plan to have a final investment decision by year-end of 2025 and be producing lithium in 2028.鈥�
The project was the only DLE project deemed as a priority transparency critical mineral project when the Trump administration released its initial list of such projects earlier this year. The designation should ensure an efficient and timely National Environmental Policy Act review process that address all stakeholder concerns and won鈥檛 derail project schedules.
鈥淭he administration recognized that we were sitting on a world-class resource that鈥檚 globally significant in terms of both size and quality,鈥� Park said. He believes the administration also took notice of business-friendly Arkansas and its energy community, the project鈥檚 proximity to existing infrastructure, a willing labor supply and a supportive local community. 鈥淚n addition, I think they saw that we were a small company with big ambitions that needed some help and some support.鈥�
USGS has described the Smackover Formation as a 鈥渉idden treasure鈥� of potential lithium. Using a predictive model, a USGS-led study showed between an estimated 5 and 19 million tons of lithium reserves could be located beneath southwestern Arkansas. The formation, which stretches from Texas to Florida, dates back to the Jurassic period and is a known giver of oil and bromine.
鈥淭he surface disturbance of a DLE process is much more analogous to an oil and gas operation. You drill some wells, you produce the brine, you have a pipeline, it goes to a central processing facility and then you re-inject that brine back into the ground. We have minimal surface land disturbance compared to an open pit mine that you would see for another commodity or even lithium in the western United States.鈥�
Lithium extraction efforts have been focused on deep salt deposits in Arkansas. Area DLE players include Exxon Mobil and Occidental Petroleum. Other states such as California, Utah and Nevada are the sites for lithium exploration with DLE. Albemarle鈥檚 Silver Peak mine in Nevada is the only lithium-producing mine in the U.S.
鈥淭he key to understanding direct lithium extraction technology is there are different variations of DLE and the real art or science comes in matching the technology with the actual resource,鈥� Park said.
DLE involves using adsorption, resin or membranes to extract lithium from brine.
Lithium is present in many parts of the world, but concentrations may not be high enough everywhere to be extracted economically. Park said southwest Arkansas is fortunate to have world-class lithium brine concentrations of between 400 to 600 parts per million, which is considered a high concentration that rivals resources in South America. Chile holds the world鈥檚 largest lithium resources at an estimated 9.3 million tons compared to Australia鈥檚 6.2 million tons; Argentina鈥檚 3.6 million tons; China鈥檚 3 million tons and 1.1 million tons in the U.S., USGS data show.
The two largest levers to developing DLE projects are lithium concentration in brines and the percentage of lithium that can be extracted during the process, Park said. 鈥淎s a result of five years of learning and demonstration, Koch is willing to stand behind a performance guarantee that we will be able to extract 95% of the lithium in the brine,鈥� he said, adding that creates 鈥渁 powerful economic incentive that ensures we鈥檙e at the left-hand side of a supply curve or first quartile in a cost position. That said, the technology is applicable elsewhere. It just may not be as economic or competitively advantaged.鈥�
Smackover Lithium is targeting 22,500 tons of lithium carbonate for its first phase. The project鈥檚 second phase boosts that to roughly 45,000 tons. Standard Lithium also has land in East Texas that it believes could bring an additional 100,000 tons of lithium.
Eyeing refining
Extracting critical materials is only one part of the picture. Building facilities to process them is another. China may not possess the greatest amount of the world鈥檚 critical mineral resources, but it dominates the refining process as it continues to be a main financing source for projects across the world.
Citing the International Energy Agency, a report released by AidData, a research lab at William & Mary, showed China is home to 35% of the world鈥檚 reserves of rare earth elements (REE), but accounts for 70% of global extraction and 87% of global processing.
鈥淐hina has established a near-monopoly on the entire supply chain, giving it incredible power to direct鈥攐r withhold鈥攖hese resources to other countries. It has also 鈥榳eaponized鈥� its position three times,鈥� according to the report. In September 2010, Chinese authorities banned REE exports to Japan following a maritime fishing dispute. In December 2023, Beijing announced a ban on exporting REE extraction and separation technologies. In December 2024, it banned exports of gallium, germanium and antimony to the U.S. after Washington imposed restrictions on the sale of chips and specialized chipmaking equipment to China.
China has given itself an advantage with government-funded efforts that have included manipulating the market to suppress competition, according to John Busbee, CEO and co-founder of Xerion Advanced Battery Corp. The late-stage startup manufactures lithium-ion batteries. Its novel battery technology incorporates electroplating, a technique that changes an object鈥檚 physical properties by using electricity to coat a metal over a different metal. Think gold-plated jewelry.
(Source: Xerion Advanced Battery Corp.)
鈥淐apitalism works in an even playing field. I think you want survival of the fittest. But ... it becomes a real issue especially when those materials are critical to next-generation fighter jets and radars and missiles and things like that,鈥� Busbee said. 鈥淎nd when you combine that with the aggression that China has shown and the imperialistic expansion in the South China Sea and all the things like that and their aggressive approach at Taiwan, I think that it鈥檚 concerning.鈥�
The U.S. has been aware of its deficit in the critical minerals space for long time, said Busbee, who spent most of his 25-year time with the U.S. Air Force in its research lab before joining Xerion. As the U.S.-China relationship has deteriorated, China鈥檚 strategic moves in capturing markets have been more apparent with the lead widening within the last 20 years, he said.
Xerion鈥檚 technology, called DirectPlate, eliminates the need for plastic binders and conductive additives that are typically used for powder-based lithium-ion battery cathodes. Instead, battery materials such as lithium, cobalt, manganese and nickel precursors are electroplated directly on the aluminum foil for lithium batteries, creating finished electrodes, according to Xerion鈥檚 website. The process cuts what is typically a 14-step process down to three.
Earlier this year, the company announced development of molten salt electrolysis technology that it called a breakthrough in cobalt refining. The proprietary DirectPlate Molten Salt Electrolysis technology creates a one-step metal re铿乶ing technique from impure mined raw materials and select recycling streams. 鈥淲e really think that we have a pretty generic technique to really just more efficiently refine metals,鈥� he said.
Busbee, like others, see the U.S. critical minerals moves as a way to level the playing field. The steps are seen as an opportunity to clear red tape.
鈥淲e鈥檝e been pretty fortunate as we鈥檝e moved into this area, which was an offshoot of our battery technology. It was just a natural progression for us,鈥� Busbee said. 鈥淲e had some real price advantages with our batteries. And right now, specifically for cobalt, we believe that we can be on an even cost basis with China, even though they鈥檙e at massive scale and we鈥檙e not.鈥�
Xerion鈥檚 targeted market applications are focused on the military, drones and electronics and more recently, electric vehicles.
A realistic pathway for U.S. companies to compete with China and others in critical minerals will involve not only enabling mechanisms like the Defense Production Act but also public-private partnerships working toward a coordinated national strategy, according to Busbee.
He used the critical minerals-battery space as an example of where a more holistic effort is needed. 鈥淭hey built a bunch of assembly plants, but the refining and the precursor materials weren鈥檛 there and weren鈥檛 keeping up,鈥� he said. 鈥淲ithout that, the battery guys are like, 鈥榃ell, I built this, but I don鈥檛 have domestic materials to buy.鈥� And then materials guys were saying, 鈥楬ey, we want to build this factory, but nobody will sign off on it because there are no buyers.鈥欌€�
Without a coordinated national strategy between government and strategic corporates, venture capitalists, private equity and others, it鈥檚 a big lift to compete with China.
鈥淚 think if people aren鈥檛 pragmatic about it and coordinated about it on a national sense, that it鈥檚 going be really hard to achieve in any timeframe that鈥檒l be relevant to national security and the strategy,鈥� Busbee said.
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