Department of Defense Invests $250 Million in Funds Appropriated by Inflation Reduction Act to Expand Domestic Production of Critical Materials
Since mid-2023, the Department of Defense has awarded a total of $250 million to twelve recipients utilizing funds appropriated by the Inflation Reduction Act (IRA) (Public Law 117-169). The twelve awards, made via the Defense Production Act Purchases (DPAP) office within the Office of the Assistant Secretary of Defense for Industrial Base Policy (OASD(IBP)), directly support the objectives of the National Defense Industrial Strategy (NDIS) by establishing domestic manufacturing capability for a reliable and sustainable supply of strategic and critical materials for large-capacity batteries and other supply chains key to national defense.
“These strategic investments will result in accelerated access to critical materials by incentivizing the establishment, expansion, and modernization of essential items required for defense and commercial systems and the associated workforce development efforts,” said Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy (ASD(IBP)). “Many of these commodities have essential applications in microelectronics, aerospace, and other defense-related sectors as well.”
“Over the last few decades, the U.S. has seen the sourcing of a large number of critical materials shift overseas,” added Mr. Anthony Di Stasio, Director of the Manufacturing Capability Expansion and Investment Prioritization directorate (MCEIP) under the OASD(IBP). “Variable demand, price competition, and multiple other economic forces have resulted in the need to source many critical materials from foreign, often adversarial, nations. These awards reduce our reliance on foreign sources and mitigate severe defense industrial base risks.”
Details on these twelve awards and recipients are included below:
- In July 2023, the Department awarded $37.49 million to Graphite One (Alaska) to secure a reliable, sustainable supply of domestic graphite materials for producing large-capacity batteries. The award is intended to fast-track the company’s feasibility study north of Nome, Alaska, by a full year, informing and expediting decisions to move the project further through its plans for a completely U.S.-based graphite anode supply chain.
- In September 2023, the Department awarded $89.95 million to Albemarle Corporation in North Carolina to re-open the company’s Kings Mountain lithium mine site and enable the sustainable and responsible domestic mining of 8000 tons per day of spodumene ore, which supports large-capacity battery production.
- In November 2023, the Department awarded $3.18 million to South Star Battery Metals Corporation (South Star) to conduct a feasibility study of the entire mining-to-production process for coated, spheroid purified graphite at the company’s BamaStar Graphite Project in Coosa County, Alabama. Natural and synthetic graphite is a primary component in the anodes of lithium-ion batteries used in stationary energy storage and electric vehicles.
- In March 2024, the Department awarded $7.00 million to The Doe Run Resources Company (Doe Run) to complete a demonstration-scale production run at its hydrometallurgical plant for separating cobalt and nickel at its facility in Viburnum, Missouri. This will lead to a sustainable domestic processing facility capable of producing commercial-scale levels of cobalt and nickel, which are used in a number of DoD systems.
- In May 2024, the Department awarded $20.00 million to South32 to accelerate the company’s Hermosa Project—which produces battery-grade manganese in Santa Cruz County, Arizona—and deliver ore up to two years earlier than originally planned. Upon successful completion of this effort, South32 will be the first sustainable domestic producer of battery-grade manganese.
- Also in May 2024, the Department awarded $8.35 million to Lomiko Metals, Inc. (Lomiko) to advance the company’s La Loutre natural flake graphite project in Quebec, Canada, as a supplier of high-quality graphite for defense applications and the growing North American electric vehicle market. The funds will be used to complete a pre-feasibility study, perform spherical graphite battery testing and value-added studies, and complete a definitive feasibility study.
- In August 2024, the Department awarded $11.81 million to Lithium Nevada Corporation to upgrade infrastructure at Thacker Pass, the company's lithium mine located in McDermitt Caldera, Humboldt County, Nevada. These upgrades will enable the company to test, demonstrate, accelerate, and scale up its lithium carbonate extraction process and produce commercial-scale levels of battery-grade lithium carbonate.
- Also in August 2024, the Department awarded $6.56 million to Montana Technological University, located in Butte, Montana, to fund the development and delivery of a critical workforce development program that will allow trainees to upskill their capabilities in metallurgical, geological, mining, and environmental engineering.
- In September 2024, the Department issued four separate DPA Title III awards using funds appropriated by the IRA. The first was a $26.40 million award to Global Advanced Metals USA Inc. (GAM) to enable domestic production of high-purity niobium oxide at the company’s Boyertown, Pennsylvania, facilities. Niobium oxide is a precursor to high-purity superalloys in advanced aircraft, rocket systems, and other defense platforms.
- The second September 2024 award was $19.07 million to Nathan Trotter & Co., Inc. (Nathan Trotter), of which $16.55 million were IRA funds, to conduct an engineering study and establish a domestic facility to build comprehensive capacity for the smelting, refining, and recycling of tin in Coatesville, Pennsylvania. Tin is ubiquitous in both commercial and defense applications such as semiconductors, capacitors, mobile phones, flat panel displays, vehicles, batteries, photovoltaics, bearings, wire coatings, glass, plasticizers, and superalloys for aircraft.
- The third IRA-funded DPA Title III project announced in September 2024 was a $12.88 million award to Nano One Materials Corp. (Nano One) to demonstrate commercial-scale production of lithium iron phosphate (LFP) cathode active materials at the company’s Candiac, Québec and Burnaby, British Columbia facilities. LFP cathode active materials are critical precursors in the large-capacity battery supply chain. LFP has considerable advantages for military applications, including high power, advantageous safety characteristics, and a high cycle life. Additionally, all LFP inputs can eventually be sourced in North America, further reducing reliance on foreign sources.
- The final award in September 2024 was $10.00 million of IRA funding for the Energy Storage Systems Campus (ESSC), which is being executed by the University of Texas at Dallas. The ESSC is an MCEIP Pathfinder project to address cross-service and interagency needs in critical minerals and battery supply chains. The funds will help build a shared-use facility outside of Dallas, Texas, expanding the capacity of current battery chemistries while accelerating the development and production of next-generation batteries. The University of Texas at Dallas is leading this effort with a consortium of partners from Department of Energy national labs, the energy industry, emerging small businesses, and universities, colleges, and trade schools nationwide.
With DPA Title III funding, the recipients listed above will significantly contribute to the defense and commercial sectors' transition to more secure sourcing of these materials and a clean energy economy. The $250 million in total funding helps ensure that critical minerals for defense articles are available and enables the United States to guarantee that mineral procurement is not dependent on foreign and potentially adversarial sources. The DPAP office is overseen by the ASD(IBP)'s MCEIP directorate.
For more information on MCEIP, please visit: https://www.businessdefense.gov/ibr/mceip/index.html.
About the Office of the Assistant Secretary of Defense for Industrial Base Policy (OASD(IBP))
The OASD(IBP) works with domestic and international partners to forge and sustain a robust, secure, and resilient industrial base enabling the warfighter, now and in the future. OASD(IBP) also utilizes a new Defense Industrial Base Consortium Other Transaction Agreement (DIBC OTA) to solicit new ideas for research or prototype project solutions for critical Supply Chain Resiliency Focus Areas. It underscores the Department's ongoing dedication to safeguarding the integrity of our crucial supply chain and furnishing our warfighters with requisite materials and technologies promptly. To learn more about the DIBC OTA, please visit: https://www.dibconsortium.org.