South Dakota’s critical-mineral debate is being fueled by a mix of government classifications, state research on where deposits sit, and fresh exploration in the Black Hills region. While rare earth elements have become a focal point in discussions about supply chains and national security, the state is also home to reserves of other materials labeled “critical minerals” by the federal government, drawing interest from companies seeking new sources of inputs for industry and technology.
The U.S. government classifies 50 minerals overall as critical, and South Dakota is known to host reserves of 15 of them, none of them rare earth elements, according to the U.S. Geological Survey. The critical minerals identified for South Dakota include antimony, arsenic, barite, beryllium, cesium, fluorspar, graphite, lithium, manganese, niobium, tantalum, tellurium, tin, tungsten and vanadium. A 2024 analysis by the state Legislative Research Council places many of those minerals in western South Dakota counties—Custer, Fall River, Harding, Lawrence, Pennington and Perkins—and also in central counties Buffalo and Lyman.
Geology professor Christopher Pellowski, of South Dakota Mines in Rapid City, said the Black Hills have long been a known place for usable critical minerals and that new studies are keeping exploration activity alive. He described how some of these minerals can be abundant but hard to extract because they often sit inside other rock that must be mined and separated through chemical processes. As an example, Pellowski said pegmatite rock in the Black Hills can hold deposits of lithium, but he said companies would need to find substantial, monetizable levels before scaling up.
Pellowski said modern mining also differs from extraction practices from earlier decades. In remarks carried in the report, he said, “Mining is important and it’s a real economic driver. … But I don’t see us at a point where we’re ready for a large commitment (of money and resources).” He added, “They’re just going to have to do this in steps. And what they’re doing now is the homework to get their heads wrapped around what’s there.” Pellowski also said, “Mining today is not the mining of 100 years ago,” arguing that mining is “new and improved.”
Exploration is underway at several sites across South Dakota, including work targeting graphite, lithium, niobium, tantalum, tellurium, tin and tungsten, based on the Legislative Research Council report and other state records. The report says lithium exploration has seen the most activity in pegmatite ore near Hill City and Keystone, with four lithium exploration projects underway in the central Black Hills. The report also describes a licensed pegmatite mine in Lawrence County seeking ore that could contain niobium, tantalum, tellurium, tin and tungsten, and a separate exploration effort in the central Black Hills seeking tantalum, tin and tungsten.
The most recent critical-mineral exploration, the report says, is being undertaken by Rapid City-based Pete Lien and Sons. U.S. Forest Service documents describe an effort to find reserves of graphite by drilling 18 holes roughly 1,000 feet deep on federal lands about 3 miles southwest of Rochford. The report notes that graphite can be used in lithium-ion batteries for electric vehicles, as well as in products such as lubricants, brake linings, pencils and other items.
South Dakota lawmakers have also been drawn into the question of how to regulate lithium mining. The report says bills filed in 2023 and 2024 sought to reclassify lithium and add taxation to its production, and that in 2025 lawmakers tried but failed to increase permitting requirements on lithium mines. Under current law, the report says lithium mines can be classified like sand and gravel mines, a framework that requires less public notification and input than the hard-rock mine category, which triggers mandatory environmental and cultural impact studies.
Opposition to mining has come from a range of Native American and environmental groups, with objections extending beyond critical minerals to other proposed mining such as uranium in parts of the southern hills region. The report says Native American tribal officials and the NDN Collective have registered opposition to uranium and lithium mining and to Pete Lien and Sons’ efforts to hunt for graphite. It adds that NDN has sponsored billboards in the Rapid City area urging the company to end its mining efforts, and that the proposed Lien mine site is close to Pe’ Sla, a Lakota ceremonial site.
The potential impacts on water are central to the objections described in the report. Black Hills Clean Water Alliance opposes further mining and, the report says, executive director Lilias Jarding highlighted that the region is semi-arid and that mining uses large quantities of water. Jarding told News Watch, “It’s an issue of both quantity and quality of water,” and said mining “uses huge quantities of water and makes the quality of the water worse.” She also said any type of mining can be destructive, including by displacing wildlife and people, and she argued that open-pit mining destroys the landscape and contributes to global warming.
The report also points to interest and investment in rare-earth extraction beyond South Dakota, describing a project in eastern Wyoming as an example of the scale of activity companies may bring if deposits prove valuable. With funding from the U.S. Department of Energy, the state of Wyoming and private investors, Rare Element Resources invested $170 million into a project aimed at extracting and separating rare earth minerals from rocks found just west of the South Dakota border. The report says the company has spent $100 million and is seeking final federal permitting to mine rocks from the Bear Lodge region in northeast Wyoming, and that it built a $70 million demonstration plant in Upton, Wyoming.
In remarks included in the report, Rare Element Resources director of business development Paul Bonifas said, “It’s no secret that China controls roughly 90% of rare earth processing, separation and production,” and he framed domestication of rare earth supply as a national-security imperative. The report further says Bonifas described the company’s market value in January 2026 as nearly $440 million, as evidence that rare-earth and critical-mineral mining can attract investment when projects reach commercially viable stages.