Oklahoma emerges as key player in US’ plan to counter China’s critical minerals dominance

Oklahoma, traditionally known for its oil and gas industry, is making unexpected strides in the critical minerals sector. The state is quickly becoming a hub for refining and processing key critical minerals needed for the clean energy transition, military technologies, and electronic devices, all of which have become increasingly reliant on China.

At the heart of this transformation is Westwin Elements, a startup based in the shadow of the Wichita Mountains. Westwin has developed the only nickel refinery in the United States, a crucial element used in lithium-ion batteries and military applications.

The facility, currently capable of processing 200 tonnes of nickel annually, plans to scale up significantly, with projections to refine up to 34,000 tonnes by 2030, which could meet 10 per cent of the nation’s annual nickel demand. This facility is part of Oklahoma's broader effort to reduce US dependence on Chinese supply chains for critical minerals amid rising trade tension between the two nations.

Nickel, essential for electric vehicle (EV) batteries, is increasingly sought after as the US ramps up its energy transition and military capabilities. Reuters reported that Westwin is negotiating with the Pentagon about a contract to supply nickel for military drones and other equipment, further emphasising the strategic importance of securing domestic supplies of critical minerals.

A diversified approach to mineral processing

Westwin is not alone in Oklahoma’s mineral processing boom. The state is also seeing the development of a significant lithium refinery by Stardust Power, which will produce 50,000 tonnes of lithium annually.

This facility, set to meet one-fifth of the projected US lithium demand by 2030, will also leverage the state’s abundant wind power to partly power its operations. Japan’s Sumitomo has already entered into a preliminary agreement to purchase a portion of Stardust's output, further solidifying Oklahoma’s role in the global minerals market.

Additionally, USA Rare Earth, a company focused on producing magnets for EVs and defence applications, is set to open a facility in the state.

The magnet factory will produce enough magnets annually to power more than 400,000 EVs, a critical need in the US as China has placed export restrictions on rare earth minerals. These developments highlight Oklahoma’s commitment to becoming a national leader in rare earths and other critical minerals.

The state's appeal for investment

Despite its lack of major mineral deposits, Oklahoma has managed to attract significant investments into its mineral processing infrastructure. The state located at the centre of the US with access to major railways, highways, and an inland port on the Mississippi River makes it an appealing base for manufacturers and distributors of critical minerals.

The state also offers tax rebates, financial incentives, and a workforce experienced in energy extraction, making it a prime location for the burgeoning sector.

Oklahoma’s streamlined regulatory environment, promoted as a “one phone call state”, further encourages investment. In recent years, the state has seen a significant influx of companies such as Green Li-ion, Blue Whale Materials, and Natural Evolution, which are working on recycling lithium-ion batteries and electronic waste.

Oklahoma’s focus on recycling, coupled with its energy experience, positions it as a central player in the circular economy for critical minerals.

Overcoming challenges

While Oklahoma’s push into critical minerals is gaining momentum, the state faces challenges. One of the most significant hurdles is its underperforming education system, which ranks 48th in the nation.

This could make it difficult to attract high-tech talent to the region, an issue that the state is attempting to address through a school voucher system designed to increase competition among schools and attract families.

Additionally, Oklahoma’s efforts to woo major tech companies have been met with setbacks, including Tesla supplier Panasonic’s decision to build a battery plant in Kansas instead of Oklahoma.

Despite these challenges, state officials remain optimistic and committed to the long-term vision of making Oklahoma a key player in the critical minerals market. Governor Kevin Stitt has emphasised that Oklahoma is “swinging for the fences” in its efforts to reshape the state’s economic future.

Push for mineral independence

The recent development is part of a broader trend in the US and Canada to reduce dependence on China for critical minerals. As geopolitical tensions rise, nations are increasingly focused on securing domestic sources of critical materials.

The US government is working to streamline permitting processes and expedite critical mineral development through initiatives like the FAST-41 programme, designed to cut delays in infrastructure development.

At the same time, global market dynamics are evolving, with countries like Japan and members of the G7 forming agreements to ensure the diversification of mineral supply chains.

The US is investing heavily in the extraction, processing, and recycling of these minerals to ensure a steady, reliable supply for its clean energy and defence industries.

As Oklahoma continues to develop its critical mineral processing capabilities, it is poised to play a central role in US efforts to reduce reliance on foreign sources, especially China, for essential materials.

With investments flowing into the state and a government eager to support these initiatives, Oklahoma is positioning itself as a linchpin in the national strategy to build resilient, secure supply chains for critical minerals.

(With inputs from agencies)