(The Center Square) – The U.S. Department of Defense has approved the American subsidiary of Australian mining company Volt Resources to join the U.S. Defense Industrial Base Consortium, with the company now potentially in line for a $100-million grant to help fund construction of a graphite processing plant in Alabama.
The consortium prioritizes new, innovative solutions and partners with battery materials firms in the U.S., Australia, Canada and the United Kingdom. Volt’s patent-pending process for purifying graphite avoids the use of harsh hydrofluoric acid and the need for expensive, energy-intensive furnaces that operate at 2,500-3,000 degrees, the traditional methods used. Chinese companies produced about 90% of the global supply of refined graphite products in 2024.
Battery metals companies like Volt are currently setting up mining and processing operations near the Alabama Graphite Belt, a 230,000-acre area about 65 miles southeast of Birmingham in parts of Coosa, Clay and Chilton counties. Graphite was mined in Coosa County from the 1890s to the 1950s, with activity peaking during the two world wars.
The Alabama Graphite Belt is the largest American deposit of the critical mineral in the lower 48 states.
The Trump administration is working on several fronts to strengthen U.S. battery supply chains, including grants and loans to fund companies like Volt. Second-term Republican President Donald Trump issued several executive orders since Jan. 20 that prioritize the domestic production of critical minerals and rare earth elements.
On Aug. 13, the Energy Department issued notice of funding opportunities totaling nearly $1 billion to advance mining, processing, and manufacturing technologies across the critical minerals and materials supply chains. The Office of Manufacturing and Energy Supply Chains is allocating up $500 million to expand U.S. critical mineral and materials processing and derivative battery manufacturing and recycling, according to the Energy Department.
Volt in July announced its American headquarters will relocate from Rutger’s University’s EcoComplex to The EDGE at the Alabama Entrepreneurship Institute in Tuscaloosa, a magnet program in the University of Alabama’s Culverhouse College of Business that supports entrepreneurs and inventors.
The company is planning a graphite processing facility at the Tuscaloosa County Airport Industrial Park, with a final investment decision pending. Other Volt projects include the Zavalievsky graphite mine in Ukraine, which the company operates in challenging conditions, and a developmental mine in Tanzania. DOE provided $1 million in nondilutive funding for a review of Volt’s proposal.
Critical aerospace, defense and automobile corridor
A battery materials supply chain has already begun to take shape in central Alabama. In Bibb County, about 5 miles of Volt’s planned facility, Mercedes Benz began manufacturing high-performance lithium-ion battery packs in 2022 for the EQS and EQE model SUV electric vehicles assembled at the German automaker’s Vance Campus in the Tuscaloosa area. Mercedes, Hyundai, Honda, and Mazda operate automobile manufacturing plants in Alabama, with four electric vehicle models in the production mix.
Lithium recycler Li-Cycle opened a facility in 2022 in Tuscaloosa that can process up to 10,000 metric tons of manufacturing scrap and end-of-life batteries annually. Commodities giant Glencore recently purchased the recycling plant, but it is Alabama’s abundant flake graphite that is drawing battery materials firms to the state.
Canada South Star Battery Metals Corporation was awarded $3.2 million by the Department of Defense in November 2023 to conduct a feasibility study of the company’s planned BamaStar graphite project. The BamaStar Project includes the Ceylon graphite mine, which is located on a 500-acre tract active during the first and second World Wars.
Southstar in May announced commercial production had begun at its Santa Cruz Phase 1 Graphite Mine in Bahia, Brazil. South Star said its long-term plan is to establish a vertically integrated graphite purification plant in Mobile that upgrades natural flake concentrate from both the BamaStar Project and the mine in Brazil.
In March, South Star CEO Richard Pearce said the company would collaborate with the Alabama Mobility and Power Center, a public-private partnership between the University of Alabama, Alabama Power Company, and Mercedes-Benz U.S. International, in support of a battery anode materials program. South Star would be the primary supplier of natural flake graphite to AMP, Pearce said in a release. The AMP program is to include research and development, pilot concept demonstration, and commercial-scale manufacturing.
BamaStar is one of a select handful of flake graphite assets in North America that is scalable, financeable, and permittable, Pearce said in a release.
“It is a project that checks all the boxes with strong techno-economics, Department of Defense funding, great support in the state, reliable power, nearby workforce, strong expansion potential, excellent infrastructure and logistics, as well as a location near numerous potential clients in the heart of one of the most critical aerospace, defense, and automobile corridors in the contiguous United States,” said Pearce.
Privilege and excise tax to Coosa County, but no state levies
Westwater Resources recently completed construction on the first phase of a graphite processing plant in Kellyton, Ala., near the company’s mine in Coosa County. Colorado-based Westwater spent a little over $100 million on Phase 1 and expects to invest a total of $245 million in the plant. Westwater’s proprietary purification process does not use hydrofluoric acid or high heat, but it does require high electricity consumption.
The state of Alabama in 2022 provided a $1 million Community Development Block Grant to Alexander City that funded infrastructure improvements connecting Westwater’s processing plant in Kellyton to the city’s sewer system. Westwater will receive approximately $29.9 million in jobs and tax credits through the Alabama Jobs Act over 15 years and $925,000 from AIDT for job training.
Westwater has reached agreements with South Korean battery manufacturer SK On and Fiat Chrysler America to supply coated spherical purified graphite as anode material for batteries beginning in 2026. The company is targeting production of 12,500 tons in 2026 and 25,000 tons in 2027. Westwater will begin mining operations in Coosa County in 2028.
The company processes natural flake graphite mined by Syrah Resources in Mozambique.
The Alabama Uniform Severance Tax on most natural minerals is set at $0.10 per ton, but graphite is covered by separate local tax in the county it is mined. When the state of Alabama passed the Uniform Severance Tax Act in 2004, Coosa County was one of a few counties with an existing tax structure that was not affected by the new statewide rules. Coosa County collects a $5 excise and privilege tax on each ton of graphite severed inside its jurisdiction.
In a 2023 U.S. Geological Survey study of the Alabama Graphite Belt, large concentrations of both graphite and critical mineral vanadium were found. Vanadium is a lightweight metal used in high-strength steel alloys and in utility-scale storage batteries.
