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Lignite council urges use of coal as feedstock to recover critical minerals; committee hears incentive rationale
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Summary
The Lignite Energy Council described a tax exemption created in 2023 to support facilities that extract critical minerals from lignite, arguing North Dakota’s deposits could help diversify supply chains for defense- and technology-related minerals.
Jonathan Fortner, president and CEO of the Lignite Energy Council, addressed the Tax Reform Relief Advisory Committee to explain a sales-and-use tax exemption enacted in the 2023 session (House Bill 1511) aimed at encouraging commercial processing of critical minerals and rare-earth elements from lignite coal.
Fortner argued the policy response is tied to national security and supply-chain concerns: he told members China controls “about 90% of the world's supply of critical minerals,” which makes domestic production strategically valuable. Fortner said North Dakota lignite contains recoverable concentrations of germanium and gallium in parts-per-million ranges and highlighted federal grants, streamlined permitting initiatives, and research activity (including work by the ND Geologic Survey and EERC) to identify and test extraction pathways.
The incentive reduces upfront costs for processing facilities and also includes a severance-tax exemption on the first million tons per year used to produce critical minerals, Fortner said. He cautioned that while research shows geologic potential across multiple counties, commercial viability depends on element concentrations, recoverability, processing costs and global market prices.
Fortner noted no commercial lignite-based critical-mineral recovery facilities currently operate in the state; the 2023 incentive is designed to attract third-party processors and convert pilot projects into full-scale operations.
Committee members thanked Fortner and asked follow-up questions about permitting, federal alignment and pilot projects; staff will keep the item on the interim schedule as research and federal grant activity move forward.
