On May 19, the Department of Energy committed $45.7 million across 19 projects to close critical gaps in U.S. minerals supply chains. That number is not the story. The story is that Big Blue Technologies, a Wyoming-based company, will build and operate the first domestically manufactured modular magnesium smelter at commercial scale. Magnesium is a material the United States sources entirely from imports, with zero refinery capacity. A single company clearing that gap in 2026 is the kind of infrastructure shift that reshapes who can build what, and where.
Big Blue's pilot plant sits in Cheyenne. The company will scale its process from laboratory chemistry to continuous operation of a single 2-megawatt modular smelter, running for 2,000 hours unmanned. The feedstock: ore and aluminum scrap. The output: magnesium metal and calcium aluminate slag. This is not a pilot program that produces grams for testing. It is a commercial production unit designed to run continuously without human intervention. The technical barrier here is not chemistry, the reaction works at lab scale. The barrier is building a smelter that runs reliably for 2,000 consecutive hours. That is the kind of operational threshold that separates a proof of concept from a production facility.
Magnesium sits at the foundation of three supply chains the U.S. government is actively trying to de-risk: battery production (where it is used in some advanced anode and cathode chemistries), aerospace manufacturing, and defense systems. The U.S. imported approximately 145,000 tons of magnesium alloys in 2024, with 95% of it coming from China and Russia. There is no domestic refinery. When the Pentagon or a battery maker needs magnesium metal in volume, they order from suppliers with no U.S. presence. The DOE announcement breaks that dependency, but only if Big Blue's smelter actually reaches the milestones on the contract.
The $45.7 million is split across 19 projects, but the two highest-impact awards target tier-one pilot-scale facilities: Big Blue on magnesium, and USA Rare Earth on rare earth element separation using continuous ion exchange (a process that pulls rare earths from solution without the waste stream that plagues conventional liquid-liquid extraction). USA Rare Earth's facility will be in Stillwater, Oklahoma, and is designed to handle ore concentrates from domestic mining operations, completing the mine-to-magnet supply chain that currently does not exist. The cost-share requirement, each awardee must contribute non-federal funding alongside DOE money, signals that these are not vanity projects. Companies are betting their own capital on hitting production targets.
The competitive read is stark. Today, China controls roughly 80% of global rare earth processing and 100% of U.S. magnesium refining. No American manufacturer of defense systems, batteries, or aerospace components can source these materials domestically at scale. That constraint is intentional policy in Beijing and Moscow. By 2027 or 2028, if Big Blue and USA Rare Earth both hit their milestones, the U.S. supply chain closes one of its last major vulnerabilities. Foreign suppliers lose pricing power. Defense contractors gain supply security. The battery makers race accelerates without the mineral supply overhang.
What to watch: Big Blue's demonstration of 2,000 consecutive hours of unmanned smelter operation, the technical milestone is public, the timeline is implicit in the contract. If the smelter runs, the U.S. has magnesium production. If it does not, the domestic supply chain remains theoretical. Second, track whether the 17 other awardees in the round reach their tier-two bench-scale milestones within 24 months. Those projects feed the innovation pipeline. If the pace slows, the cost of metals stays elevated. Third, monitor the Defense Logistics Agency's procurement data for domestic magnesium orders by 2028. If Big Blue is selling to contractors within two years, the reshoring strategy is working.