There is a scene repeated at every trade show this year: a manufacturer announcing, with visible pride, that it is investing in domestic production. Volvo Construction Equipment announced early in 2026 that it is putting $40 million into its Shippensburg, Pennsylvania, plant to start building excavators and large wheel loaders for the North American market — part of a $1.2 billion strategic commitment to regionalize supply chains. The announcement was framed as a win for manufacturing resilience, and it is. But here is the question nobody asks at the podium: where does the steel, the copper, the rare-earth magnets, and the specialty alloys actually come from? Bringing the factory home is the easy part. Bringing the materials home is the hard part, and that is the part that is still mostly undone.
What reshoring actually reshapes
The logic of reshoring has changed in a decade. It used to be about wages and tariffs — arithmetic questions. Now it is about risk: concentration of supply, export controls, shipping lanes, and the uncomfortable discovery that a single country or region can hold the entire materials ladder for a given technology. The shift is visible in the language. It is no longer called offshoring or near-shoring; it is called supply chain security, and it is being run out of ministries of defense and economy, not procurement departments.
Volvo’s investment is a clean example. The machines built in Pennsylvania are regional products for regional markets — the point is responsiveness and resilience, not lower cost. But a wheel loader is a bundle of materials: high-strength steel plate, hydraulic systems, copper wire, and increasingly, sensors and electronics. The factory floor is the visible part of the supply chain. The invisible part is upstream — the smelters, refiners, and processors — and that is where concentration is worst and progress is slowest.
The $45.7 million gap between rhetoric and reality
This is precisely what the US Department of Energy’s latest program is trying to address. In 2026, the DOE’s Office of Critical Minerals and Energy Innovation is investing $45.7 million across 19 projects focused on strengthening domestic critical mineral and material supply chains — processing, extraction, recycling, and manufacturing technologies. The list of participants reads like a who’s who of the US research infrastructure: USA Rare Earth, Big Blue Technologies, the Southwest Research Institute, Battelle, Princeton, Idaho National Laboratory, Argonne, Columbia, Ohio University, Michigan Technological University, Lawrence Livermore, and others. The scope runs from rare earth processing and lithium extraction to graphite production, battery recycling, cobalt-nickel separation, and magnesium manufacturing.
$45.7 million is real money. It is also, to be blunt, a rounding error next to the problem. A single battery plant costs more than that. But the point of these programs is not to build the industry; it is to build the technology and the pilot facilities that de-risk private capital. The honest assessment: this is seed funding for a crop that will take a decade to harvest, and it needs to be measured as such.
Where the concentration actually is
The uncomfortable fact of the materials landscape is how concentrated the processing stage is. Most of the attention in the media goes to where ores are mined, but mining is the most geographically distributed part of the chain. The bottleneck is refining and processing. Over the past two years, the leading refiners — Indonesia for nickel, China for most other key energy minerals — accounted for more than three-quarters of the growth in refined supply. In several markets, including manganese, nickel, and graphite, virtually all supply growth came from a single supplier. That is the real vulnerability: not the mine, but the refinery.
And the gap is structural, not temporary. Even with all the announced projects, planned rare earth refining capacity in 2035 would cover only about two-thirds of projected mine output, and planned magnet production capacity would reach just one-third of expected demand. The world is making plans to dig more, but the world is not making enough plans to process. It is as if everyone agreed to drill more oil wells and nobody built a refinery.
The security frame changes the economics
What is genuinely new in 2026 is not the vulnerability — that was visible for years. It is that the response has moved from market logic to security logic. When a government treats critical minerals as defense infrastructure, the investment calculus changes: projects that would never pencil out on a rate-of-return basis get funded anyway, because the alternative — dependence — is priced as a threat rather than a cost. South Korea’s approach is instructive. Having turned the 2019 Japanese export restrictions into a national project, the government is now funding a materials, components, and equipment ecosystem explicitly tied to its three mega-projects: semiconductors, data centers, and physical AI. The approved cooperation models include next-generation glass packaging substrates and 1,000-watt-class EUV pellicles, with 9.1 billion won in R&D funding and a goal of fifteen flagship supplier companies by 2030.
Note what is being funded: not final products, but the materials and process technologies underneath them. The Koreans understood that the competitive battle in semiconductors was going to be decided upstream — in substrates, pellicles, and the chemistry of lithography — not on the assembly line. The same logic applies to batteries, motors, and every electrified machine. The factory is where value is assembled. The materials are where value is won or lost.
What this means for manufacturers
For a manufacturer reading this, the practical implication is uncomfortable but clear: your reshoring plan is incomplete if it stops at your assembly line. The question to ask is not where you build, but where your materials’ materials come from — the steel’s feedstock, the magnet’s rare earths, the electrolyte’s lithium. If any of those are single-sourced from a country whose trade policy can change overnight, then your factory is not resilient; it is a hostage that happens to be located closer to home.
The rational response is already visible in the data: procurement teams are increasingly selecting for vertical integration. In the storage industry, companies that manufacture at least one critical component in-house are winning share from pure integrators. In mining and refining, the trend is the same — mining companies are moving downstream into processing, and process companies are moving upstream into feedstock. The supply chain is not just reshoring geographically. It is vertically integrating structurally.
The takeaway
Reshoring was sold to the public as a story about factories and jobs, and it is a good story. The technical reality is different: the binding constraint is materials, and materials are slow. A factory can be built in eighteen months. A refinery takes five years and a mine takes ten, and both need to be financed before the factory even breaks ground. Every reshoring announcement made this year will be limited by the materials ladder that already exists — until the investments being made today in processing, recycling, and substitution start paying off late in this decade.
The honest bottom line: the $40 million factory is the visible victory, and the $45.7 million pilot program is the invisible race. The factories are coming home, and that part is working. The materials are coming home much more slowly, and that part decides whether the factories stay. Buyers should plan accordingly — the bottleneck in the supply chain is still upstream, and it is not going anywhere for a while.