Lithium, Critical Minerals, and the Mine-To-Market Regulatory Challenge in Nevada

Nevada Lawyer April 2026, State Bar of Nevada, reprinted with permission.

Nevada has a long-standing history rooted in mining. What is new, and legally consequential, is the ever-increasing role Nevada now plays in the nation’s broader critical minerals supply chain. As federal policy pushes aggressively toward domestic production of lithium, copper, gold, silver, and other vital minerals essential to electric vehicles, grid storage, and national security, Nevada sits at the intersection of geology, public lands, water scarcity, and environmental regulation.

Today’s critical minerals projects are not limited to extraction alone. Increasingly, they are conceived as integrated, end-to-end developments, encompassing mining, processing, refining, transportation, and in some cases manufacturing. That shift is testing an environmental and public-lands regulatory framework largely built around discrete mining operations. The result is a rapidly evolving legal landscape, one increasingly defined by litigation risk, novel regulatory questions, and pressure on agencies and industries to reconcile competing mandates.

Public Lands and Mining Law of 1872 in a Modern Energy Economy

Lithium development in Nevada remains anchored, at least formally, in the Mining Law of 1872. Concepts such as discovery, claim validity, and valid existing rights still frame federal land-use decisions. Yet lithium-bearing deposits have forced agencies and courts to grapple with doctrines, most notably the “uncommon variety” mineral test, that were not initially contemplated to encompass the growing demand for lithium as well as other minerals important to a rapidly electrifying society.

At the same time, the Bureau of Land Management’s (BLM) obligations under the Federal Land Policy and Management Act (FLPMA) have taken on renewed significance. FLPMA’s multiple-use mandate increasingly requires balancing mineral development against conservation, recreation, tribal interests, and ecosystem protection, often at a landscape scale. Recent BLM planning initiatives and conservation-oriented rulemakings have introduced additional complexity, raising questions about how mineral entry fits alongside emerging conservation priorities.

For practitioners, the takeaway is straightforward: lithium projects are no longer evaluated in isolation. Claim validity, plan approvals, and land-use consistency determinations are now deeply intertwined with broader federal new avenues for challenge and delay.

Environmental Review at Extraction Stage: NEPA, Tribes, and Species

Environmental review under the National Environmental Policy Act (NEPA) has become one of the most significant pressure points for lithium mining projects in Nevada. Even as federal agencies face political pressure to expedite critical-minerals permitting, courts continue to scrutinize environmental analyses with care, particularly where projects raise unresolved questions about water use, cumulative impacts, and cultural resources.

Common vulnerabilities in environmental impact statements include alternatives analyses that appear artificially constrained, cumulative-impact discussions that fail to account for related development, and hydrologic models that struggle to reconcile limited data with long-term uncertainty in arid basins. These issues are particularly acute where groundwater resources are fully appropriated or already subject to competing demands.

Tribal consultation has also emerged as a central litigation issue. Section 106 of the National Historic Preservation Act (NHPA) requires meaningful consultation, yet what qualifies as “meaningful” continues to evolve. In Nevada, where many projects intersect with landscapes of cultural and spiritual significance rather than discrete archaeological sites, agencies face increasing scrutiny over whether consultation has been sufficiently early, substantive, and responsive.

Overlaying these concerns are Endangered Species Act (ESA) obligations, particularly where mining footprints intersect with sensitive habitats or areas subject to broader conservation strategies. Together, NEPA, NHPA, and ESA compliance form a dense regulatory web, one that demands careful coordination and a defensible administrative record.

Water as Critical Constraint on Mine-to-Market Development

If public lands provide the stage for Nevada’s critical-minerals development, water often determines whether the project can proceed at all. Lithium extraction and processing are water-intensive activities, and many proposed projects are located in basins that are already fully appropriated or experiencing long-term declines.

From a regulatory perspective, water issues increasingly bleed into environmental review. Agencies and opponents alike are focusing not just on whether water rights exist on paper, but on whether those rights are physically reliable over the life of a project. Questions about return flows, evaporation, mitigation pumping, and long-term drawdown are no longer peripheral; they are central to project viability and litigation risk.

For practitioners, this convergence of water law and environmental review presents both challenges and opportunities. Water-rights permitting, protest proceedings, and mitigation commitments now play a critical role in shaping NEPA outcomes, underscoring the importance of early, integrated strategy rather than siloed permitting efforts.

Beyond the Mine: Environmental Regulation of Processing and Refining Facilities

Perhaps the most underappreciated shift in Nevada’s critical-minerals landscape is the rapid move toward domestic processing and refining. Federal incentives increasingly favor projects that extend beyond extraction, leading to proposals for lithium refining, cathode production, and battery-related facilities located near, or at least within the same region as, mines.

These facilities introduce an entirely different regulatory profile. Unlike mining operations, processing plants are often regulated as industrial facilities, triggering distinct air-quality, waste-management, and water-discharge requirements under state and federal law. Air permitting for hazardous pollutants, groundwater protection standards, and solid or hazardous waste classification all come into play, often under heightened public scrutiny.

Siting decisions for processing facilities also raise environmental-justice concerns, particularly where rural or economically disadvantaged communities bear a disproportionate share of impacts. Public participation, cumulative-impact analysis, and local land-use approvals have become focal points for opposition, sometimes independent of the underlying mining project.

The practical implication is clear: mine-to-market projects multiply regulatory exposure. Counsel must navigate not only overlapping permitting regimes but also evolving expectations around community engagement and cumulative environmental effects.

Supply Chains as Litigation Targets: Connected Actions and Segmentation Risks

As critical-minerals projects become more vertically integrated, recent U.S. Supreme Court precedent has meaningfully clarified, but not eliminated, the limits of NEPA’s “connected actions” and indirect-effects analysis. In Seven Cnty. Infrastructure Coal. v. Eagle Cnty., Colorado, 605 U.S. 168, 168, 145 S. Ct. 1497 (2025), the court reaffirmed that federal agencies are not required to evaluate environmental effects of upstream or downstream activities that are separate in time or place from the proposed action, particularly where the agency lacks statutory authority to prevent those effects.

The court rejected “but-for” causation and mere foreseeability as sufficient bases for expanding the scope of NEPA review, emphasizing instead that agencies must assess only those effects reasonably attributable to the action they are approving. In doing so, the court reinforced a deferential “rule of reason,” instructing reviewing courts to uphold agency scoping decisions so long as they fall within a broad zone of reasonableness.

Importantly, Seven County does not eliminate the possibility that multiple project components may constitute a single federal action where they are closely related and within an agency’s jurisdiction. Rather, the decision shifts the litigation focus away from categorical challenges to alleged segmentation and toward whether an agency has reasonably defined the proposed action and analyzed the environmental consequences of that action within the limits of its statutory authority. For developers and agencies alike, legal defensibility increasingly turns on disciplined project definition and jurisdictional clarity, rather than presenting a fully integrated mine-to-market project narrative under a single NEPA review.

Practical Implications for Nevada Practitioners

For attorneys advising clients in this space, several themes emerge. First, integration matters. Water rights, mining approvals, environmental review, and land-use planning must be coordinated from the outset. Second, administrative records matter more than ever, particularly where agencies are asked to balance speed against thoroughness. Third, anticipating challenges early, from tribes, NGOs, or local governments can significantly reduce downstream risk.

Nevada practitioners are uniquely positioned to guide clients through these complexities, but doing so requires a mine-to-market perspective that reflects how projects are developed and challenged.

Nevada as a Test Case for Future of Minerals Law

Nevada has become a proving ground for the nation’s critical-minerals ambitions. How regulators, courts, and practitioners address the legal challenges posed by integrated supply chain development will shape not only Nevada’s landscape, but also national precedent. As demand accelerates and scrutiny intensifies, the future of critical-minerals development will depend less on any single permit than on the ability to navigate a regulatory system under strain. For Nevada practitioners, recent federal decisions underscore a shift in litigation posture. As courts reinforce jurisdictional boundaries and limit the scope of agency review, legal defensibility increasingly hinges on the rigor of individual administrative records, not on broad, end-to-end project framing.

MICHELINE NADEAU FAIRBANK is a director with Fennemore’s Business Litigation and Natural Resources practice groups, based in Reno. Her practice focuses on water and natural resources law, supported by extensive experience handling complex civil litigation and regulatory matters at both the trial and appellate levels.

Before returning to private practice, she served as deputy administrator of the Nevada Division of Water Resources, working closely with the Nevada State Engineer on the administration of Nevada’s water rights and water-resource framework. She has also represented the Nevada Division of Environmental Protection in permitting and compliance matters under state and federal environmental laws, including the Comprehensive Environmental Response Compensation and Liability Act, the Clean Water Act, and the Safe Drinking Water Act. She can be reached at mfairbank@fennemorelaw.com.