The United States is on the verge of a major lithium production boom, marking a significant shift in the global electric vehicle (EV) supply chain. This expansion is part of a broader strategy to reduce dependence on China for critical minerals and EV battery components.

Recent developments include the Biden administration's approval of the Rhyolite Ridge lithium-boron mine in Nevada and a $2.6 billion loan to the company developing the Thacker Pass lithium mine, also in Nevada. Additionally, a project in California's Salton Sea began construction earlier this year. These three sites, expected to become operational between 2026 and 2028, are set to dramatically increase US lithium supply.

The push for domestic lithium production is driven by concerns over China's dominance in the EV battery supply chain. While Australia and South America are major lithium producers, China processes about two-thirds of the world's lithium and dominates EV battery manufacturing. The US currently imports approximately 25% of its lithium from Chile and Argentina but relies on China for about 70% of its lithium-ion batteries.

Bernard Rowe, managing director of Ioneer, which is developing the Rhyolite Ridge project, emphasized the importance of diversifying the supply chain: "If we're electrifying the transportation industry, you don't want to rely on any one country. There was a recognition that there had to be domestic production."

The Biden administration is supporting this expansion through various incentives, including loans, grants, tax breaks, and research and development programs. These initiatives, many authorized under the Inflation Reduction Act, cover a range of activities from extracting critical minerals to manufacturing renewable energy components and recycling.

While the US alone cannot meet the rapidly growing global demand for lithium, industry experts argue that some domestic sourcing is crucial for national security reasons. The White House has stated that US lithium production is on track to meet one-fifth of global demand outside of China this decade.

However, these projects have faced opposition from environmental groups and Native tribes. Concerns include potential threats to endangered species, water sources, and culturally significant sites. In response, companies like Ioneer have redesigned their projects to minimize environmental impact.

The industry is also exploring new extraction techniques, such as direct lithium extraction, which could reduce land and water use and produce less toxic waste compared to traditional methods. The viability of these techniques could unlock significant lithium resources, such as those recently discovered in southwestern Arkansas.

As the US moves forward with its lithium production plans, the balance between economic and strategic interests and environmental and cultural concerns remains a critical challenge for the industry and policymakers alike.