Critical Minerals Refinery Projects

Refining and processing capacity represents the most acute bottleneck in Western critical mineral supply chains, and closing this gap has become a top priority for industrial policy in the United States, European Union, Canada, Australia, Japan, and South Korea. China currently controls 60 to 90 percent of global processing capacity for most critical minerals, a concentration that persists even when raw materials are mined in other countries. The wave of new refinery projects under development represents the most ambitious attempt to rebalance this processing concentration since China first established its dominance in the 1990s and 2000s.

Lithium Conversion Projects

Lithium hydroxide and lithium carbonate conversion projects are the largest category of new refining capacity under development. In the United States, Albemarle is expanding its lithium hydroxide conversion plant in Kings Mountain, North Carolina, returning to a site that was once one of the world's primary lithium sources. Piedmont Lithium plans to build a lithium hydroxide plant in Tennessee, processing spodumene concentrate from its equity interests in mines in North Carolina and Quebec. Ascend Elements is constructing a facility in Hopkinsville, Kentucky, that will produce cathode active material from both recycled batteries and virgin lithium chemicals.

In Australia, Albemarle, Tianqi Lithium, and SQM operate or are developing lithium hydroxide conversion plants at Kemerton and Kwinana in Western Australia, strategically located near the major spodumene mining districts of the Pilbara and Goldfields regions. Covalent Lithium (a joint venture between Wesfarmers and SQM) is building a conversion plant at Kwinana. In Europe, Vulcan Energy is developing a combined geothermal energy and lithium extraction project in Germany's Upper Rhine Valley, aiming to produce lithium hydroxide with a near-zero carbon footprint. AMG Lithium is operating a lithium hydroxide conversion plant in Bitterfeld-Wolfen, Germany, processing spodumene from its mine in Brazil. These projects collectively represent a major expansion of non-Chinese lithium chemical capacity, though their production volumes will still be modest relative to Chinese capacity for several years.

Nickel and Cobalt Refining Projects

Nickel sulfate production capacity is expanding to meet demand from the battery sector. In Finland, Terrafame operates an integrated battery chemical complex that produces nickel sulfate and cobalt sulfate from nickel ore mined at its Sotkamo operation, using bioleaching technology that reduces the carbon intensity of production compared to conventional pyrometallurgical methods. BHP is expanding its Nickel West refinery in Kwinana, Western Australia, to increase battery-grade nickel sulfate output. In Indonesia, a massive build-out of high-pressure acid leaching (HPAL) plants and mixed hydroxide precipitate (MHP) production facilities is underway, primarily through Chinese-Indonesian joint ventures, to convert laterite nickel into battery-grade intermediate products.

Cobalt refining capacity is being developed as part of integrated battery materials complexes. First Cobalt (now Electra Battery Materials) is refurbishing a cobalt refinery in Temiskaming Shores, Ontario, aiming to produce battery-grade cobalt sulfate from imported concentrates and recycled feedstock. Jervois Global has developed a cobalt and nickel refinery in Sao Paulo, Brazil, though it has faced commissioning challenges. The need for new cobalt refining capacity outside China and the DRC is driven by automaker and battery manufacturer preferences for supply chains that can demonstrate responsible sourcing credentials and comply with emerging due diligence regulations. For context on the geopolitical drivers, see friendshoring and partnerships.

Platinum Group Metal and Specialty Metal Refineries

Platinum group metal (PGM) refining is dominated by South African operations, with Anglo American Platinum, Impala Platinum, and Sibanye-Stillwater operating integrated smelting and refining complexes. New capacity is being developed to process PGMs from recycled automotive catalytic converters, a growing feedstock source as older vehicles are scrapped. BASF and Johnson Matthey operate PGM recycling refineries in Europe and North America. In the specialty metals space, projects to develop titanium sponge production, tungsten refining, and antimony processing outside of China and Russia are advancing with government support, driven by defense supply chain security concerns.

Integrated Mine-to-Chemical Operations

A growing trend in critical minerals project development is the integrated mine-to-chemical model, where a single company or project combines mining and refining at a single location or within a tightly linked supply chain. This approach reduces transportation costs, captures more value domestically, and simplifies supply chain logistics. Examples include Arafura Rare Earths' Nolans project in Australia, which plans to mine, crack, leach, and separate rare earth elements on-site. Similarly, Terrafame's operation in Finland integrates nickel mining with battery chemical production. The integrated model is particularly attractive for government policymakers seeking to maximize domestic value-add from critical mineral resources rather than exporting raw concentrates for overseas processing.

Financing and Development Challenges

Building new refinery capacity is capital-intensive, with costs ranging from hundreds of millions to multiple billions of dollars depending on scale and complexity. Lithium hydroxide conversion plants typically require $500 million to $1 billion in capital expenditure. HPAL nickel plants can exceed $2 billion. Rare earth separation and refining facilities range from $200 million to $500 million. These capital requirements, combined with technology risk, permitting uncertainty, and the need to secure long-term feedstock supply, make refinery development one of the most challenging segments of critical mineral project development. Government loan guarantees, grants, and offtake commitments from the U.S. Department of Energy, the EU Innovation Fund, and Export Finance Australia are playing an increasingly important role in de-risking these investments. For a deeper look at how these projects are funded and supported, see strategic projects.