U.S. Invests in Domestic Graphite Projects to Secure Military Supply Chains amid Chinese Restrictions

The U.S. Department of Defense is addressing vulnerabilities in its supply chain, focusing on domestic graphite production to secure critical materials for military technologies.

This effort includes the BamaStar Graphite Project in Alabama and the Graphite Creek deposit in Alaska, which are central to reducing reliance on foreign graphite.

For decades, the U.S. has been almost entirely dependent on foreign sources for graphite, a key component in the batteries that power electric vehicles, military energy systems, and other technologies. China, which produces 77% of the world's graphite and refines more than 90%, dominates the market. As geopolitical tensions rise, this dependency has become a national security concern. China's 2023 export restrictions on graphite heightened the urgency, underscoring the department's efforts to mitigate risk.

The Defense Production Act (DPA) has supported critical projects, including a $3.2 million investment in BamaStar and a $37.5 million allocation to Graphite Creek, the largest known deposit of graphite in the U.S. BamaStar received funds for a feasibility study on creating a fully domestic graphite production pipeline. Graphite Creek received the award to accelerate development of a vertically integrated supply chain, including manufacturing and recycling.

These investments are part of a broader initiative to address vulnerabilities in the Defense Industrial Base (DIB). The DPA, originally designed for wartime emergencies, is now being used to strengthen supply chains in anticipation of future needs.

Unveiled in October 2024, the National Defense Industrial Strategy Implementation Plan (NDIS-IP) outlines key initiatives, including managing defense production and supply chains, onshoring capabilities, and enhancing cybersecurity to address risks like single points of failure for military technologies. Another initiative focuses on allied collaboration, particularly in the Indo-Pacific region, where adversarial influence on critical materials is growing.

During the briefing, Laura Taylor-Kale, assistant secretary of defense for Industrial Base Policy, emphasized the interconnection of integrated deterrence, economic security, and military strength, stressing the importance of measuring progress through a risk framework. Investments in Graphite Creek have spurred a $435 million processing facility, and similar investments in rare earth magnets and microelectronics have attracted private-sector innovation.

Taylor-Kale noted that today's investments also addresses long-term vulnerabilities like those caused by cyberattacks and natural disasters. Through tools like the DPA and public-private collaboration, the U.S. is strengthening its leadership in critical materials and technologies.