Why Are Critical Minerals So Important to the U.S. Economy?
Critical minerals like lithium, nickel, and rare earth elements are essential for modern technologies, especially clean energy and defense systems. These minerals are used in:
- Electric vehicle (EV) batteries
- Wind turbines and solar panels
- Smartphones and electronics
- Military equipment
The U.S. Department of Energy has labeled them as “critical” because they are both economically important and at risk of supply disruption. Most of the world’s supply of these minerals is processed in China, raising concerns over national security and economic stability.
How Is Oklahoma Positioned to Become a Key Player in This Space?
Oklahoma is gaining national attention for its growing role in the U.S. critical minerals sector. Several factors contribute to this rise:
- Natural resource availability: The state has existing deposits and access to raw materials needed for refining.
- Infrastructure and logistics: Oklahoma offers proximity to highways, rail, and energy resources.
- Policy support and investment: State and federal support, including grants and tax incentives, are encouraging new facilities.
Projects under development include a rare-earth processing plant and a proposed lithium refining facility. These are being built with the goal of reducing dependence on foreign suppliers, especially China.
What Is Driving the Need for Domestic Battery Material Production?
The shift to green energy and electric vehicles is putting massive pressure on battery production. Batteries are the core of this energy transition, and their components must be secure, reliable, and affordable.
Current concerns include:
- Global supply chain risks: Ongoing geopolitical tensions and supply disruptions during COVID-19 have highlighted the need for local sources.
- National security: Critical minerals are essential to defense technologies.
- Job creation: Domestic processing and manufacturing can revitalize local economies.
The Inflation Reduction Act (IRA) has accelerated investment in battery material production in the U.S., offering billions in federal funding to eligible projects.
What Are the Main Projects Underway in Oklahoma?
According to a Reuters report, Oklahoma’s McCurtain County is now home to a major rare-earths processing project by USA Rare Earth, expected to become operational within a few years.
Other developments include:
- Lithium refining facilities aiming to support EV battery supply chains
- Nickel processing ventures to support high-density battery technologies
These investments represent a strategic response to both federal incentives and growing private-sector demand.
What Are the Risks Facing the U.S. EV and Battery Supply Chains?
While federal funding has driven a wave of investment, challenges remain:
Slowing EV Sales
Despite high expectations, electric vehicle adoption in the U.S. is not growing as fast as anticipated. Some automakers are pulling back production targets, citing:
- Consumer hesitation
- High vehicle costs
- Lack of charging infrastructure in rural areas
Overcapacity Risk
As reported by The Washington Post, the rapid scale-up of battery plants could result in overcapacity if EV demand continues to lag.
This could lead to:
- Project cancellations or delays
- Idle plants
- Increased financial risks for investors
Political Uncertainty
There is also concern over future policy shifts that could undo progress made under the IRA. Changes in government priorities could affect long-term investments.
How Does Battery Manufacturing Tie Into National Resilience?
Energy security is increasingly tied to technological independence. The ability to mine, refine, and manufacture batteries within national borders supports:
- Grid resilience and energy independence
- Innovation in clean technologies
- Reduced vulnerability to trade disputes or supply shocks
The combination of resource availability and federal backing places Oklahoma in a strategic position to contribute to this broader national goal.
Are There Environmental Concerns Around These Developments?
Yes. Mining and refining of critical minerals can have significant environmental impacts if not managed properly. Key concerns include:
- Water usage and contamination
- Air emissions from processing plants
- Waste disposal
To address these, companies are:
- Implementing closed-loop water systems
- Using renewable energy for processing
- Committing to environmental impact assessments and transparent reporting
What Role Do Private Companies Play in This Sector?
Private firms are leading many of the projects in Oklahoma, often in partnership with state and federal agencies. Their role includes:
- Technology development and innovation
- Capital investment
- Workforce development and training
Companies like Promwad and other manufacturers are also working to create more efficient and environmentally friendly battery designs that require fewer rare materials.
How Can Oklahoma Maintain Momentum?
Sustaining its growth as a critical minerals and battery hub will require:
- Continued investment in infrastructure
- Educational programs and training for skilled labor
- Strong environmental safeguards
- Ongoing public-private partnerships
Oklahoma’s universities, local governments, and tech firms must work together to ensure the long-term viability of these projects.
What Should Investors and Policymakers Watch Moving Forward?
Key indicators of progress include:
- Facility completion and production timelines
- Market demand for electric vehicles
- Policy continuity at federal and state levels
- Global shifts in critical mineral trade and availability
By tracking these trends, stakeholders can better assess both opportunities and risks in the evolving U.S. battery supply chain.
For companies ready to implement advanced solutions, Vergent Products supports high-reliability electronic manufacturing and intelligent design with integrated risk management built in.
Works Cited
Reuters. “Rural Oklahoma Strives to Become American Hub for Critical Minerals Processing.” Reuters, 18 June 2025, https://www.reuters.com/world/us/rural-oklahoma-strives-become-american-hub-critical-minerals-processing-2025-06-18/.
The Washington Post. “Electric Vehicle Battery Plants Face Risk of Overcapacity Amid Slower EV Sales.” The Washington Post, 19 June 2025, https://www.washingtonpost.com/climate-environment/2025/06/19/electric-vehicle-battery-plants-us-manufacturing/.
CFRA Research. “Key Trends in Electronic Manufacturing Services (EMS).” CFRA Research, 2025, https://www.cfraresearch.com/insights/key-trends-in-electronic-manufacturing-services-ems/.
U.S. Department of Energy. “Critical Materials Strategy.” Energy.gov, 2023, https://www.energy.gov/policy/critical-materials.
U.S. Geological Survey. “Mineral Commodity Summaries 2024.” USGS.gov, 2024, https://pubs.usgs.gov/periodicals/mcs2024/mcs2024.pdf.
Frequently Asked Questions
2. What are critical minerals used for?
Critical minerals are vital for electric vehicle batteries, renewable energy systems, smartphones, defense technologies, and other high-tech applications.
3. What are the risks of overcapacity in battery manufacturing?
Overcapacity could lead to underused plants and wasted investment if EV adoption slows or policy support is rolled back, especially given the large-scale facilities being built.
4. How is the federal government supporting this sector?
The Inflation Reduction Act provides funding, tax credits, and incentives for domestic battery production, mineral refining, and related infrastructure.
5. What environmental measures are in place for these projects?
Companies are incorporating water recycling, renewable energy use, and environmental assessments to minimize ecological impact during refining and manufacturing processes.
