The Opportunity Zone Deal Onshoring America’s Most Critical Resources

In the age of supply chain insecurity, one project is bringing cobalt processing—and critical jobs—back to U.S. soil.

Gil Michel-Garcia of EVelution Energy joins the show to discuss how Opportunity Zones are helping to power a major industrial comeback via a $322 million cobalt processing facility being developed in Arizona. Backed by OZ equity and driven by federal policy—including President Trump’s recent executive order on critical minerals—this project is onshoring a vital part of America’s supply chain for electric vehicles, battery storage, and national defense.

Guest: Gil Michel-Garcia, EVelution Energy

About The Opportunity Zones Podcast

Hosted by OpportunityZones.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.

Listen Now

Episode Summary

In this episode of The Opportunity Zones Podcast, host Jimmy Atkinson welcomes Gil Michel-Garcia, co-founder of EVelution Energy, to discuss the company’s groundbreaking project: constructing the first cobalt processing facility in the United States. Located in an Opportunity Zone in rural Arizona, the facility is poised to become a critical part of the U.S. supply chain for electric vehicle (EV) batteries and defense systems. The conversation covers U.S. dependence on foreign critical minerals, how EVelution Energy plans to shift that paradigm, and why the Opportunity Zones incentive is vital to the project’s capital structure and long-term viability.

Why the U.S. Lags Behind on Critical Mineral Processing

Gil explains that the U.S. is decades behind in processing critical minerals like cobalt due to deindustrialization and an overreliance on China. While the U.S. has little domestic cobalt mining capacity, China controls a vast majority of global cobalt processing by importing raw materials from countries like the Democratic Republic of Congo (DRC) and refining them in Chinese facilities.

EVelution Energy’s mission is to break this monopoly by building a domestic processing facility in Yuma County, Arizona, effectively bypassing China and repatriating part of the U.S. industrial base. The impact goes beyond economics: cobalt is essential not only for EVs and energy storage but also for national defense applications, including jet engines and missile systems.

Project Details: A Facility in an Arizona Opportunity Zone

The new plant is being constructed in a rural agricultural area near Tacna, Arizona, in a federally designated Opportunity Zone. This site was chosen strategically for several reasons:

  • High solar potential: Yuma County is the sunniest place in the U.S., making it ideal for solar-powered industrial operations.
  • Local economic impact: The project offers high-paying jobs (average salary of $75,000) in a community where the median household income is $40,000.
  • Renewable energy: The facility will be powered entirely by on-site solar generation, and surplus electricity will be provided to local farmers.

Support from the Inflation Reduction Act

The Inflation Reduction Act (IRA) is providing significant benefits to the project through the Renewable Energy Investment Tax Credit. This reduces the capital expenditure needed for solar infrastructure by 30–50%, making solar electricity more affordable—down to 3.5–4.5 cents per kilowatt hour, comparable to or even cheaper than China’s coal-powered grid.

Gil explains how this levels the playing field and helps the U.S. compete with low-cost Chinese production, especially in industries where China has aggressively dumped product below cost to maintain its monopoly.

Executive Order and National Policy Context

Jimmy and Gil reference President Trump’s March 20 executive order, Immediate Measures to Increase American Mineral Production, which prioritizes securing U.S. supply chains for critical minerals and reducing dependency on foreign adversaries. This order reinforces the strategic importance of EVelution Energy’s work and positions the project within a broader national effort to revitalize domestic manufacturing and energy independence.

Impact of Tariffs and Supply Chain Independence

Jimmy and Gil discuss the recent tariffs implemented by President Trump, which have had a positive effect on the critical minerals sector. These tariffs exempt raw critical minerals (like cobalt hydroxide from Congo) but block Chinese-processed cobalt sulfate and related battery materials from entering the U.S. market.

This gives EVelution Energy a unique advantage as the only domestic cobalt sulfate processor. The company has long-term supply agreements with non-Chinese producers Glencore, Trafigura, and ERG, ensuring a secure supply of feedstock. Gil’s prior experience in cobalt and copper trading in Africa and Latin America gave him the contacts and credibility needed to secure these deals.

Cobalt’s Role in EV Batteries

Gil breaks down why cobalt is essential in EV battery chemistry:

  • It reduces overheating and increases stability and energy density.
  • Cobalt is a key ingredient in NMC (Nickel Manganese Cobalt) batteries, which are preferred in the U.S. due to their better range and suitability for larger vehicles.
  • Unlike Chinese or European markets that use LFP (lithium iron phosphate) batteries for smaller EVs, the U.S. market demands larger batteries, which require cobalt.

The facility’s entire cobalt sulfate production is already spoken for, with LOIs (letters of intent) signed with major battery manufacturers and auto OEMs (though Gil can’t yet disclose specific names).

Aerospace, Defense, and Strategic Reserves

Beyond EVs, cobalt is indispensable in defense applications. Gil lists prime contractors like Raytheon, General Dynamics, Pratt & Whitney, and Boeing as potential consumers. The facility will also supply the Defense Logistics Agency (DLA), which manages the national defense stockpile of critical minerals.

EVelution Energy plans to develop a private warehousing facility in the OZ that can serve as a strategic cobalt reserve—similar to the Strategic Petroleum Reserve—ensuring uninterrupted access in case of supply disruptions.

OZ Incentive and Capital Stack

The Opportunity Zone component plays a central role in EVelution Energy’s financing strategy. The project has a total budget of $322 million, structured as follows:

  • 70–80% government debt via a $200 million loan from the Export-Import Bank (Ex-Im Bank) under the “Make More in America” program. This is 18-year debt at low interest rates (~4%).
  • $60 million in mezzanine debt through the EB-5 immigrant investor program.
  • $57.2 million in OZ equity, of which only $7 million remains available in the current raise.

Series B investors are being offered a unique deal:

  • 10% preferred return.
  • Return of capital in 2027, funded by the investment tax credit rebate.
  • Continued participation in long-term equity upside and tax-free distributions after the 10-year hold.

The Importance of an OZ Extension

Jimmy and Gil discuss the urgency of extending or renewing the OZ incentive, which is currently scheduled to sunset at the end of 2026. Gil views OZs as one of the most effective tools available for driving investment and job creation in rural, underserved areas. The ability for investors to make tax-free returns while helping rebuild the U.S. industrial base makes it a “no-brainer” for national policy.

Gil also emphasizes that OZs are particularly well-suited for capital-intensive industrial projects like this one, where the debt is largely guaranteed and backed by the U.S. government, providing stability and strong investor returns.

Conclusion

EVelution Energy’s Yuma County facility represents a transformative step toward reshoring America’s critical mineral supply chain, increasing EV battery independence, and strengthening national defense infrastructure. It’s also a powerful case study for how the Opportunity Zone program can support large-scale industrial development with real social and economic impact.