By Penny Langford
A proposed U.S. refinery capable of processing 24,000 metric tonnes of black mass a year is one of several 2026 milestones showing how the critical minerals supply chain is beginning to move beyond mine development and toward regional processing capacity.
Nth Cycle’s Project SHIELD, a proposed facility in the southeastern United States, would produce nickel mixed hydroxide precipitate and battery-grade lithium carbonate from recycled battery material. The company said in August that it had been selected by the U.S. Department of Energy to enter negotiations for up to $100 million in support. The award is not yet final, but the project illustrates the scale and policy backing now being directed at midstream capacity.
At the same time, Australia and the United States are building pilot and commercialization hubs aimed at developing rare-earth separation, lithium-metal production, mineral recycling and advanced materials. These facilities are not equivalent to commercial refineries, but together they point to a more distributed model for processing critical minerals.
That distinction matters. The world does not simply need more mines. It needs more places capable of converting concentrates, black mass and intermediate products into usable chemicals, metals and components.
The processing bottleneck remains concentrated
The International Energy Agency’s Global Critical Minerals Outlook has documented the concentration of refining capacity across energy-transition minerals. The top three refining countries accounted for about 86% of global refining in 2024, up from approximately 82% in 2020.
China remains the leading refiner for most strategic minerals, while Indonesia has driven the rapid expansion of nickel processing. According to the IEA, roughly 90% of refined-supply growth between 2020 and 2024 came from the leading supplier for each mineral : Indonesia for nickel and China for cobalt, graphite and rare earths.
This concentration creates several risks for mining companies and downstream manufacturers:
- A mine may have ore but no nearby route to refined products.
- New processing projects can face long permitting and commissioning timelines.
- Export restrictions can affect intermediate products as well as finished metals.
- Buyers increasingly want traceable, regionally secure and lower-emission supply.
The emerging hubs below address different parts of that problem.
Hub 1: Nth Cycle targets commercial-scale U.S. recycling
Project SHIELD is the most clearly defined commercial-scale project among the three. Nth Cycle said the proposed facility would process up to 24,000 metric tonnes of domestic black mass annually using its electroextraction platform and modular OYSTER system.
The plant is designed to produce:
- Nickel mixed hydroxide precipitate
- Battery-grade lithium carbonate
- Recovered materials from spent lithium-ion batteries and other feedstocks
Nth Cycle expects the facility could begin operating as early as 2029, subject to award negotiations, project approvals and construction. The company said the project would create approximately 800 to 1,000 construction-related jobs and 54 permanent positions.
The project also has a commercial signal through a binding 10-year offtake term sheet with Trafigura. Nth Cycle said the agreement has an approximate value of $1.1 billion and includes purchases of nickel contained in MHP and lithium carbonate.
The significance extends beyond recycling. Black mass is an intermediate feedstock, not a finished battery material. Without domestic refining capacity, material recovered in the United States may still need to be shipped abroad for conversion into usable products. That creates exposure to transport costs, trade restrictions and foreign processing bottlenecks.
Nth Cycle’s project is therefore aimed at closing a specific gap: keeping the value of battery recycling inside the regional supply chain.
However, investors and operators should treat the announced capacity as a project target rather than current output. The DOE selection remains subject to negotiations, and the company has not yet placed the facility into commercial operation.
Pilot-scale refining equipment is increasingly being used to move processing technologies toward commercial deployment.
Hub 2: Australia builds rare-earth and lithium capability
Australia’s Critical Minerals Research and Development Hub is taking a different route. Led by CSIRO in partnership with ANSTO and Geoscience Australia, the hub is focused on the technologies required to process materials that Australia has historically exported with limited downstream conversion.
The hub’s 2026 progress report lists seven major collaborative research projects and four pilot-scale research facilities under development. Their focus includes:
- Clay-hosted rare-earth processing
- Lithium-metal production
- High-purity quartz
- Rare-earth metallisation
The rare-earth work is particularly important because mining and separation are separate industrial challenges. A country can produce rare-earth-bearing ore while remaining dependent on overseas facilities for separation, metal production and magnet manufacturing.
Australia’s hub is aimed at those midstream steps. It is not presented as a single commercial refinery with a fixed annual output. Instead, it is a platform for testing flowsheets, producing engineering data and developing Australian-owned processing technology.
That role can be decisive for projects that struggle to secure financing. Demonstration-scale evidence can help companies reduce technical risk before committing to full-scale plants. It can also give government agencies and potential customers a clearer basis for evaluating recovery rates, reagent use, energy demand, waste streams and product quality.
The hub’s work also includes predictive models and flowsheets for recovering strategic by-products such as gallium, germanium and indium. Those materials may not determine the economics of a large mine, but their recovery can improve resource efficiency and reduce dependence on single-country supply chains.
Australia’s experience is relevant to other mining jurisdictions, including Canada and Africa, where governments are seeking to capture more value from copper, lithium, nickel and rare-earth resources. Skillings has previously examined how critical-minerals partnerships are being used to support processing capacity.
Hub 3: Colorado focuses on commercialization
The Critical Minerals Innovation and Commercialization Hub at Colorado School of Mines represents a third model: a large applied-research and commercialization facility designed to connect government, universities, technology developers and industrial users.
The school said in August that it was slated to receive a proposed $32.7 million federal investment. The hub will be housed in a 50,000-square-foot facility in Golden, Colorado, where partners will test technologies for:
- Mineral processing and recovery
- Refining
- Recycling
- Advanced materials
- Commercial scale-up
Unlike Project SHIELD, the Colorado facility does not yet publish a single annual throughput figure. Its value lies in shortening the distance between laboratory results and operating plants.
For mining companies, that can include testing a new separation technology against a difficult orebody. For recyclers, it may mean validating a flowsheet for mixed battery feedstocks. For equipment suppliers, it can provide a setting to demonstrate modular systems to prospective customers.
This type of infrastructure is increasingly important as ore grades decline and feedstocks become more complex. Commercial plants must often handle variable mineralogy, impurities and changing product specifications. A technology that works in a controlled laboratory environment may not perform reliably when feed chemistry changes from one shipment to the next.
A dedicated commercialization hub can expose those weaknesses earlier, before they become expensive operating problems.
Pilot facilities can generate the engineering data needed to advance rare-earth and lithium processing projects.
The three-hub comparison
| Hub | Location | 2026 milestone | Primary focus | Capacity signal |
|---|---|---|---|---|
| Project SHIELD | Southeast United States | DOE award negotiations | Black-mass refining, nickel and lithium products | Up to 24,000 tonnes/year |
| Australian Critical Minerals R&D Hub | Australia | Seven projects and four pilot facilities | Rare earths, lithium metal, quartz and by-products | Pilot scale; no fixed commercial tonnage |
| Critical Minerals Innovation and Commercialization Hub | Colorado, United States | Proposed $32.7 million federal investment | Processing, refining, recycling and advanced materials | 50,000-square-foot facility |
The comparison shows why “processing hub” needs to be used carefully. Project SHIELD is intended to become a commercial refinery. The Australian and Colorado facilities are technology and scale-up platforms. Their outputs may be smaller, but their influence could extend across many future projects.
What changes for operators and investors?
The first change is that project evaluation will increasingly include midstream access. A mine plan that does not identify where concentrate, hydroxide, carbonate or metal will be produced is incomplete.
The second is greater interest in modular processing. Traditional refineries can require large capital commitments and years of construction. Smaller, modular systems may allow companies to start with a narrower feedstock base and expand as supply becomes available. That does not remove technical or permitting risk, but it can alter the capital profile.
The third is a stronger connection between primary mining and recycling. Battery black mass, mine waste and industrial residues can all become feedstocks for the same regional processing network. Projects able to accept multiple inputs may be better positioned to maintain utilization through commodity cycles.
Finally, policy risk is moving downstream. Governments are not only supporting mines; they are increasingly linking incentives, export controls and procurement requirements to refining and manufacturing capacity.
This is already visible in rare earths, where shipping and supply-chain delays have become a strategic concern, and in battery materials, where recycled feedstocks are being treated as a national resource.
2026 outlook: three scenarios
| Scenario | What happens | Likely supply-chain effect |
|---|---|---|
| Base case | Project SHIELD advances through negotiations; Australian and Colorado hubs continue pilot work; commercial commissioning remains selective | Regional processing grows, but China and Indonesia remain dominant in major refining chains |
| Bull case | DOE support converts into construction, pilot technologies achieve strong recoveries and additional offtake agreements are signed | North American and Australian processing attract more capital and reduce dependence on concentrated suppliers |
| Bear case | Funding approvals, permitting, feedstock contracts or technical performance delay projects | New capacity arrives slowly, leaving miners exposed to overseas conversion routes and volatile treatment costs |
The most important milestone is not any single refinery announcement. It is the development of a repeatable path from laboratory process to pilot plant, commercial facility and contracted customer.
The 24,000-tonne Project SHIELD target provides a useful marker for the scale required. The Australian and Colorado hubs address the earlier stages of the same chain: proving that processing technologies can work with real materials and reach the quality demanded by manufacturers.
For mining companies, the map is therefore changing in two directions. New mines still matter, but the strategic advantage increasingly belongs to the jurisdictions that can separate, refine, recycle and manufacture closer to the source of demand.
LinkedIn snippet
Critical minerals supply chains are being reshaped by processing capacity, not just new mines. Nth Cycle’s proposed 24,000-tonne-per-year Project SHIELD, Australia’s four pilot facilities and Colorado’s 50,000-square-foot commercialization hub show three different routes to midstream security. Our analysis examines what these milestones mean for operators, investors and policymakers.
X snippet
The critical minerals map is shifting downstream. Three hubs : including a proposed U.S. refinery targeting 24,000 tonnes of black mass annually : show how recycling, rare-earth separation and mineral-processing technology are moving closer to end markets. Read the analysis
