Strategic Mineral Sovereignty: Ending Import Dependence on Chinese-Controlled Lithium & Rare Earth Processing Challenge

The global energy transition is driving unprecedented demand for battery metals, placing specialized mining and processing companies at the forefront of one of modern history’s largest infrastructure developments. As nations race to secure supply chains for lithium, rare earth elements, and other critical materials, companies with proven economics and government backing are emerging as strategic investment opportunities in a market experiencing structural growth.

Supply chain vulnerabilities have become a central concern for Western governments as they confront China’s dominance in critical mineral processing. The United States currently imports over 95% of its processed lithium despite possessing significant domestic resources, while China controls more than 80% of global lithium processing capacity. This imbalance has created a strategic imperative to establish alternative sources, generating premium valuations for quality projects outside Chinese influence.

“Currently there is very little battery lithium production in the United States. We see that there is so much demand that anyone who can produce battery grade lithium in the United States should be able to sell their products,” says Roshan Pujari, CEO of Stardust Power, which is developing a 50,000-ton lithium processing facility in Oklahoma.

The company recently completed its FEL-3 engineering study, which Pujari describes as “a monumental milestone” that provides institutional validation of the project’s technical feasibility and economic viability. This approach using proven, off-the-shelf technology reduces innovation risk while supporting favorable financing structures that enable 75-80% debt financing of project costs—a stark contrast to early-stage battery technology investments facing significant development uncertainties.

Processing bottlenecks extend beyond lithium to the broader spectrum of battery materials. Rare earth elements face similar concentration risks, with China dominating both mining and processing of ionic clay rare earths preferred for permanent magnet production. Cobra Resources, focused on South Australian development, is pursuing advanced metallurgical processes to remove lower-value light rare earth elements early in production, potentially enabling more profitable heavy rare earth concentrates.

“What we’re doing now is we’re assessing how we can maximize our value. One of those processes is reducing cerium and lanthanum, maximizing the dysprosium and terbium in our carbonate,” explains Cobra Resources CEO Rupert Verco.

In the bauxite market, prices recently spiked to around $120 per ton following supply disruptions in Guinea before moderating to approximately $75 per ton. China consumes about 75% of the 200 million tons traded annually in the global seaborne market. Canyon Resources is positioning itself as a significant player through its Minim Martap project in Cameroon, which the company claims is the largest high-grade undeveloped bauxite deposit in the world.

“China is the driving force but obviously increasing production coming out of the Middle East, production in India and obviously in North America,” notes Canyon Resources’ CEO Peter Secker.

Government support has become a crucial factor in accelerating battery metals projects, reflecting their strategic importance to national security and economic competitiveness. Stardust Power has secured $257 million in Oklahoma state incentives, representing over half of its Phase 1 construction costs. Additional federal support includes Export-Import Bank commitments to aggressively back shovel-ready critical mineral projects.

Canyon Resources exemplifies rapid advancement through its fast-track development timeline targeting production commencement in Q1 2026 with less than $100 million in Phase 1 capital requirements. “The mining convention was signed in July last year, the mining license was issued in September, we’ve now acquired a port, we’ve acquired rail access, we’ve ordered the locomotives,” says Secker.

Viridis Mining has secured a valuable regulatory advantage through radiological exemption from Brazil’s nuclear regulator due to exceptionally low radioactive content in its rare earth deposit. CEO Rafael Moreno explains: “Our MREC (Mixed Rare Earth Carbonate) showing that we’ve got less than 1% uranium and thorium, and there’s not many projects globally, if any, that could compete with that level of impurities in their final MREC.” This exemption enables state-level environmental approvals rather than federal jurisdiction, potentially reducing development timelines by five or more years.

The economic fundamentals of these projects are increasingly attractive. Canyon Resources projects $30 per ton margins at current bauxite prices, with production costs estimated at $35 per ton plus approximately $20 per ton in shipping costs. “If you were at 10 million tons today, you’d be making a $300 million EBITDA margin based on that,” Secker calculates.

The company’s Minim Martap bauxite deposit grades 51% alumina with less than 2% silica, providing material advantages over competing projects. “Compared to the Guinea bauxite price which is currently around $75 per ton, we would be getting if we were selling today $85 or more dollars per ton based on that higher grade alumina and lower grade silica,” Secker adds.

Viridis Mining’s Colossus project demonstrates similar robust economics. Its pre-feasibility study established an NPV of $1.41 billion with annual operating cash flow approaching $200 million at $90 per kilogram NdPr pricing. The project shows significant leverage to commodity pricing, with Moreno noting that “every dollar that NdPr goes up, we probably go up around 7 million” in annual cash flow.

Strategic infrastructure control provides another competitive advantage. Cadence Minerals has established complete supply chain integration through its 35% ownership in the Amapá iron ore project in Brazil, encompassing mine, railway, and port facilities. CEO Kiran Morzaria explains: “One of the reasons that we can keep this low is because we own our own port. We have effectively a renewable concession on the railway, which will renew every 23 years.”

Viridis Mining touts exceptional grade quality in its Brazilian rare earth development, claiming grades 4-6 times higher than Chinese counterparts. This grade advantage enables robust economics across commodity price cycles, with Moreno noting the project maintains strong returns even with NdPr prices at $50-$60.

Similarly, Cobra Resources has developed proprietary in-situ recovery technology for rare earth extraction that operates at benign pH levels. “We are planning on defining a bottom quartile cost source of dysprosium and terbium. We plan on doing that through a mining process called in-situ recovery. We have fantastic metallurgy. We’re getting high recoveries at a pH of five which is the equivalent of a black coffee,” says Verco.

For investors, the battery metals sector presents a multi-faceted opportunity. Companies addressing critical supply bottlenecks with proven technology, secured financing, and government support are positioned to capture significant value as global demand accelerates. The most attractive investments feature supply security premiums, advanced development stages, government policy alignment, premium product positioning, integrated infrastructure control, established financing pathways, and multiple near-term value catalysts.

As Western nations prioritize critical mineral independence, these companies stand at the intersection of strategic necessity and economic opportunity, offering potentially attractive risk-adjusted returns for investors willing to participate in building resilient supply chains for the energy transition.