Response to the Small Business Administration Request for Information: Scaling Critical Suppliers in Domestic Battery and Critical Mineral Supply Chains
This comment is submitted by the Responsible Battery Coalition (RBC) in response to the U.S. Small Business Administration (SBA) Request for Information (RFI) regarding "Scaling Critical Suppliers in Domestic Supply Chains" (91 FR 23523).
The RBC, as a coalition of companies, academics, and organizations committed to the responsible management of batteries throughout their entire lifecycle, recognizes that the current domestic supply chain for critical battery minerals represents a significant national security vulnerability. The United States currently faces a structural imbalance where strength in mining and downstream manufacturing is undermined by a near-total loss of midstream processing and refining capacity.1
To address the SBA’s inquiry into scaling domestic small business suppliers, this response identifies critical midstream gaps, defines measurable near-term milestones, and outlines the capital and non-capital interventions required to restore U.S. industrial resilience.1 Our recommendations to the SBA include a mixture of immediate actions available to the SBA under its mandate and where the SBA needs to collaborate with government institutions like the Department of War, the Department of Energy, and the Export-Import Bank of the United States. Coordination across agencies on critical minerals policy, procurement, financing, and commercialization is fragmented, with no unified framework, common metrics, or synchronized execution timelines.
As it stands today, the interagency environment is not functioning effectively for small businesses seeking to scale domestic critical mineral capabilities. DOE award cycles routinely extend four years or more, timelines that are fundamentally incompatible with the near-term operational milestones envisioned under SBA initiatives and programs like EXIM’s Project Vault. Meanwhile, DoW procurement pathways remain heavily concentrated among existing large prime contractors, limiting opportunities for small businesses to demonstrate technologies even when those technologies directly address stated national security requirements.
Without a serious effort to reduce federal decision cycles and improve interagency coordination, the SBA’s initiative risks producing only limited scaling success for domestic suppliers. The SBA has an opportunity to use its voice to turn this around and integrate into these issues vital to national security, economic growth, and the everyday utility of the American people.
Our analysis of how to scale critical suppliers in domestic supply chains is informed by a stages-of-control framework for examining critical suppliers in supply chains as articulated in our report with the Coalition for a Prosperous America, "Wartime Footing: How the United States Can Reverse China's Dominance of Battery Minerals Processing."1 We also share opportunities for an American Minerals Collaborative that can convene stakeholders and aggregate funding to accelerate the development and commercialization of critical mineral projects.
The Stages-of-Control Framework and the Midstream Chokepoint
The U.S. battery supply chain, which impacts everything from every car on the roads to data centers across the country and military equipment abroad, is best understood through a stages-of-control framework that delineates the value-added steps from raw material extraction to end-of-life recovery. This framework identifies five distinct stages: upstream mining and extraction; midstream refining and chemical processing; downstream processing and alloying; manufacturing and assembly of finished products; and recycling and material recovery. Security within this chain is determined not merely by access to raw ore, but by the ability to transform that ore into battery-grade chemicals and engineered inputs.
Figure 1: There are five distinct stages that together determine supply-chain security. They range in value-added from upstream activities to downstream activities and recycling.
The primary finding of our analysis with the Coalition for a Prosperous America is that the United States is processing-constrained, not resource-poor. While mining production for minerals such as antimony, lithium, nickel, cobalt, and manganese occurs across multiple continents, and even the ocean floor, the refining and chemical conversion of these materials into usable industrial forms are highly concentrated within China.
This concentration creates a decisive chokepoint at the midstream stage, allowing foreign state-backed entities to exercise "gray-zone" economic coercion—utilizing non-market policies, overcapacity, and export controls to manipulate pricing and availability.1 As of 2024, the United States was 100% net-import reliant for 12 critical minerals and over 50% reliant for another 29, despite domestic extraction potential.1
This structural imbalance means that U.S. national security risks are not evenly distributed across the supply chain but are acutely concentrated in the midstream refining and processing nodes. For small businesses, this represents a significant barrier to entry, as they must compete against foreign entities that prioritize strategic dominance over short-term profitability, often "dumping" low-cost materials into the market to bankrupt emerging domestic competitors.
Case Study: Lead-Acid Starter Batteries
The U.S. lead-acid battery sector serves as a vital case study for the SBA’s inquiry into scaling existing domestic supplier capacity. “Starter battery” technology remains indispensable for U.S. defense mobility, tactical communications, and emergency backup infrastructure.1 It provides approximately 88% of backup power for telecommunications and meets roughly 90% of the demand for uninterruptible power supply (UPS) systems in data centers and hospitals. Furthermore, the industry operates a highly efficient circular economy, with a 99% recycling rate for lead-acid starter batteries.
Despite these strengths, the sector is currently exposed to a single, decisive midstream chokepoint: antimony refining. Antimony is a non-substitutable alloying input used to harden lead grids and ensure durability in high-stress applications. Because China controls approximately three-quarters of global antimony refining capacity, it possesses the ability to disrupt the entire U.S. lead-acid manufacturing base, with ripple effects across the economy and America’s military.
In late 2024, China imposed export licensing requirements and a subsequent ban on antimony shipments to the United States.1 This triggered a sharp decline in global supply and a price surge to more than four times the historical average, the steepest rally ever recorded in the antimony market. For domestic battery producers, this loss of control at one refining stage negated the advantages of high domestic recycling rates and manufacturing expertise.
This scenario illustrates the "volatility trap" that inhibits small business scaling: foreign control over processing capacity allows authorities to throttle supply unilaterally, introducing severe unpredictability that deters private investment in domestic refining.1
Reversing this requires the rapid scaling of domestic suppliers that can recover antimony from secondary sources, such as battery recycling and mine tailings, or the invention of new battery-grade materials that can be scaled in the United States.4
Near-Term Scaling Milestones for Domestic Suppliers (1-3 Months)
The SBA seeks information on near-term milestones that can be achieved with targeted support. The RBC recommends that the SBA consider targeted prize competitions or challenges to reward achievement of specific 1-3 month engineering and operational milestones. Such prizes would de-risk subsequent private investment and help small businesses bridge from bench/pilot scale to commercial readiness.
Technical and Operational Milestones
Domestic small businesses and solution providers in the midstream sector are often "capital-short" at the transition point between research and commercial deployment. Near-term operational milestones should also be aligned with DOE and DoW solicitation windows so that small businesses can demonstrate capabilities against clear procurement and commercialization timelines while generating the technical documentation required for future contracting opportunities.
SBA should specifically prioritize advancement along Technology Readiness Levels (TRLs), particularly transitions from TRL 4-5 to TRL 6-7 pilot-scale validation. This is the threshold most relevant to DOE and DoW procurement interest and the point at which technologies become commercially investable.
Within a 90-day execution window, several measurable milestones can be achieved by small businesses, with SBA grants or other forms of support, to accelerate production capacity:
These milestones are currently hindered primarily by the lack of flexible, "compressed-window" capital that prize competitions or innovation grants could provide. SBA prize competitions and financing tools are especially well-positioned to support these transitions for companies, especially when small business applicants are paired with partnerships through national laboratories and federal testing facilities.
Constraints to Rapid Scaling and Financial Gaps
Restoring domestic midstream capacity is constrained by more than just technological readiness; it is a battle of cost structures and market entry. Small businesses in this sector face "unmatched midstream infrastructure" in China, supported by decades of state financing and permissive regulation.1
Small businesses pursuing critical mineral refining, recycling, and processing projects frequently lack the administrative capacity, consortium relationships, and grant development infrastructure necessary to compete effectively for large federal funding opportunities. SBA should support the creation of consortium-based partnerships that connect small businesses with national laboratories, universities, industrial end-users, and allied financing partners to improve access to DOE, DoW, EPA, and other federal funding programs. A mechanism for this is included in the American Minerals Collaborative proposal.
In addition to financial support, small businesses would benefit from centralized technical assistance for proposal development, cost-share coordination, compliance requirements, and post-award administration, all of which can otherwise become significant barriers to participation and scaling.
Capital Stack Requirements
The capital requirements for scaling critical mineral refining are substantial. While the Department of Energy has announced funding rounds of $500 million, the minimum award sizes for demonstration projects typically start at $50 million, often exceeding the reach of small and mid-sized enterprises (SMEs) without a significant federal backstop.19
For many domestic suppliers, the primary "gap" is the incremental capital needed for working capital—purchasing raw feedstocks, managing price fluctuations during the processing cycle, and funding during the "permitting valley" industrial projects face when capital is tied up waiting for environmental permitting and other paperwork without revenue.
SBA initiatives that offer working capital guarantees or loan programs specifically for critical mineral "scaling-stage" companies would address this liquidity crisis.1 SBA has already moved in this direction. Recent actions include issuing SBIC Policy Guidance 2025-001 in June 2025 (effective June 10, 2025), which provided interpretive guidance facilitating investments in critical minerals extraction, conversion, and processing (including long-duration projects), followed by final SBIC rule changes published on January 2, 2026 (effective February 2, 2026) that further modernized the program, reduced barriers, and explicitly aligned with priorities for critical minerals and industrial dominance.
In the event of statutory limitations to actions to address this liquidity crisis, the SBA could administratively expand eligibility/interpretations under existing 7(a), MARC, WCP, or SBIC authorities (e.g., via SOP updates, size standard adjustments for relevant NAICS, or targeted pilots for critical minerals working capital), issue interpretive guidance similar to the recent SBIC critical minerals policy, or develop a specialized guarantee product in coordination with interagency partners at the DOE, DoW, EXIM Bank, etc. Or refer the matter to the SBA’s Congressional affairs team to communicate needed changes in the statute.
Non-Capital Related Support and Interventions
To effectively de-risk critical minerals refining and recycling for small and mid-sized enterprises, which is necessary for long-term economic and national security, a comprehensive approach should combine targeted non-capital interventions with SBA’s core strengths in small business support. While some actions require broader interagency or administration leadership, SBA is well-positioned to play a leading or supporting role in several key areas:
Integrating Recycling and Waste Recovery as Strategic Assets
The Responsible Battery Coalition maintains that a "responsible battery" is one that is properly managed across its entire lifecycle, ultimately being reused or recycled.3 For scaling domestic supply, this means treating recycled materials and industrial waste not as environmental liabilities, but as the strategic feedstocks they are.
The Potential of Secondary Sources
Recovery from mine tailings and end-of-life products offers a faster path to market than new mining operations, often involving less environmental complexity and lower permitting hurdles.8
Small businesses are uniquely positioned to lead in this "secondary refining" market, as the technological challenges of extracting minerals from complex waste streams often require the innovative, agile approaches typical of startups and specialized engineering firms.30
Market Defense and the Role of Project Vault
A core recommendation of the “Wartime Footing” report is the establishment of strategic market defenses to protect domestic refiners from foreign price suppression.1 In February 2026, the launch of "Project Vault"—the U.S. Strategic Critical Minerals Reserve—represented a pivotal step in this direction.34
Project Vault is a $12 billion initiative, backed by a $10 billion loan from the Export-Import Bank of the United States (EXIM) and $2 billion in private capital.26 Unlike traditional government stockpiles, Project Vault is demand-driven and OEM-led: manufacturers identify the minerals they need and make long-term financial commitments to the program.28
For a small business refiner, Project Vault serves as a market backstop. By allowing companies to secure minerals at fixed prices through a government-backed reserve, it hedges against the price volatility that typically renders small-scale refining unbankable.26 ‘
The SBA should explore how its programs can create clear “on-ramps” for scaled domestic small business refiners to participate in Project Vault, ensuring SMEs can benefit from this important market stabilization initiative led by EXIM Bank.18
In doing so, SBA should work directly with EXIM Bank to establish transparent eligibility criteria, technical assistance pathways, and financial support tools that enable qualified small businesses to meet program requirements, including volume thresholds and commercialization benchmarks necessary for participation.
Policy Recommendations for Scaling Domestic Suppliers
To deliver measurable increases in domestic production capacity and supply chain resilience, the SBA, allied agencies, and Congress should adopt a policy framework focused on restoring control at the midstream. The RBC supports the four strategic pillars outlined in the Wartime Footing report, specifically addressed to the SBA.
Pillar 1: Anchor Long-Term Demand and Investment Stability
The SBA should work with the Department of War and the Department of Energy to ensure that small businesses scaling their refining capacity have access to long-term government offtake agreements.1 Federal procurement must prioritize U.S.-sourced midstream content, with waivers permitted only under declared emergency conditions. The SBA’s Office of Advocacy should support production credits, such as Section 45X. These credits should be extended beyond 2030 to provide the stability required for the 10-20 year investment cycles characteristic of the mineral sector.
Pillar 2: Enforce Ownership-Based Eligibility Standards
Federal tax credits, procurement programs, and SBA scaling incentives should treat minerals as adversary-origin when foreign entities of concern exercise ownership or control over the refining or processing stage.1 This prevents the "leakage" of domestic support to foreign state-backed firms and ensures that the U.S. industrial base remains independent.1
Pillar 3: Integrate Recycling and Allied Processing
Recycling must be treated as a strategic asset, with policies designed to retain end-of-life battery materials within the domestic and allied circular economy. SBA should prioritize funding for small businesses that develop "secondary refining" technologies capable of recovering critical minerals from mine waste and manufacturing scrap.
Pillar 4: Invest in Applied Research for Next-Generation Batteries
Scaling the supply chains of today is necessary, but maintaining leadership requires investing in the architectures of tomorrow. Research should prioritize battery chemistries that reduce reliance on highly concentrated minerals—such as cobalt-free cathodes, sodium-ion systems, and solid-state electrolytes. This should include research into effective recycling, especially “cathode-to-cathode” recycling. Small businesses are primary innovators in these fields, and targeted SBA prize competitions can accelerate their transition from the laboratory to commercial production.
Conclusion
The United States currently finds itself in a precarious position regarding the batteries that power its defense systems, communications networks, and critical infrastructure. The loss of control over the midstream refining and processing stages has created a structural vulnerability that foreign adversaries can exploit through economic coercion and supply denial.1 However, the nation is not resource-poor; it possesses the mineral abundance, the recycling expertise, and the technological innovation needed to restore its industrial sovereignty.
The SBA’s initiative to scale critical domestic suppliers is a vital component of a "wartime footing" response.1 Full restoration of U.S. midstream capacity will require tight coordination across SBA, DOE, DoW, EXIM Bank, and Congress. The SBA plays a uniquely valuable role by delivering flexible capital, technical assistance, and supplier certification tools directly to small businesses—the agile innovators best positioned to scale rapidly in refining, recycling, and secondary recovery.
The Responsible Battery Coalition’s American Minerals Collaborative (AMC) concept offers a framework for addressing the coordination failures and structural gaps that currently exist across agencies, particularly within small business participation pathways. The AMC is intended to convene industry, universities, workforce partners, national laboratories, and government stakeholders to support applied research, pilot-scale validation, commercialization, and consortium development across domestic critical mineral supply chains. Initial partners include the Responsible Battery Coalition, West Virginia Regional Tech Park, Marshall University Research Corp, and BridgeValley Community and Technical College. As the AMC formalizes, the organization would seek partnership opportunities with the SBA to better align interagency efforts, improve access to federal opportunities for small businesses, and strengthen execution across critical mineral supply chains.
A "responsible battery" is one that is sourced, manufactured, and recycled in a manner that protects both national security and environmental health.3 Achieving this vision requires an industrial strategy that recognizes midstream processing as the decisive battleground of global strategic competition.1 Through coordinated action between the Trump Administration, Congress and the private sector, the United States can rebuild the processing capacity essential to a robust and resilient future for the American people.1
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