DOD digs into U.S. minerals for future graphite supply chain

By Linda Hersey / July 17, 2023

Graphite mining in the United States may resume after a 30-year lapse under a Defense Department plan to establish a domestic supply chain to produce the critical mineral for large-capacity batteries that power unmanned systems and other military equipment.

A $37.5 million defense contract to Graphite One was announced Monday for a feasibility study to establish a mining operation on the Alaska coast, with the minerals expected to be shipped to a future processing plant and recycling facility in Washington State.

The United States is currently 100% dependent on imports of graphite, with China the world leader in production and processing of the mineral.

Graphite is listed as a mineral strategic to U.S. security under the Defense Production Act.

Anthony Huston, Graphite One founder and CEO, told Inside Defense Monday that the company is the first U.S.-based graphite producer to be awarded a contract under Title III of the Defense Production Act.

Title III addresses the availability of domestic industrial resources to support national defense and security requirements.

“Rechargeable batteries are increasingly important to defense platforms just as they are in commercial applications,” Huston said. “On the defense side, designers of UAVs -- drones -- have always had to make tough trade-offs between range capacity and ordinance capacity. Next-generation UAV batteries are focused on extended dwell-time and ordinance capability to lessen those trade-offs.”

Huston described the defense funding as “a strong vote of confidence in Graphite One’s complete U.S.- based supply chain strategy -- from mining to refining to recycling.”

The funds will enable the company to complete the feasibility study in the next 15-18 months, or by January 2025.

The assistant secretary of defense for industrial base policy entered into the agreement with Graphite One of Anchorage to “secure a reliable, sustainable supply of graphite materials,” according to the contract announcement.

Laura Taylor-Kale, assistant secretary for industrial base policy, said the contract award shows U.S. commitment to build a “resilient industrial base to meet current and future national defense requirements” for minerals.

The office oversees the Defense Production Act through investments in priority areas.

“Graphite One's supply chain strategy includes mining from Graphite Creek and processing the graphite ore through an advanced material and battery anode manufacturing plant expected to be sited in Washington State,” according to the contract announcement Monday.

The U.S. Geological Survey determined the three-mile Graphite Creek, north of Nome, contains the nation’s largest graphite deposit and is among the world’s richest resources for the mineral. Nome has a port on the Bering Sea’s Norton Sound.

Huston described the award as “a strong vote of confidence” in Graphite One’s supply chain strategy -- from mining to refining to recycling.

An executive order from the Biden administration in 2022 invoked the Defense Protection Act when it directed the defense secretary to identify “risks in the supply chain for critical minerals and other identified strategic materials, including rare earth elements (as determined by the secretary of defense), and policy recommendations to address these risks.”