Exciting news for the green energy movement! The U.S. Department of Energy has officially approved a massive $996 million loan for ioneer’s Rhyolite Ridge lithium project. This marks a significant jump of $296 million from the original offer, a step toward strengthening President Joe Biden’s clean energy goals. After this announcement, ioneer’s stock shot up 15%, hitting $4.96 during Friday afternoon trading in New York.
Here’s the deal: Lithium, an essential metal used to power electric vehicle (EV) batteries and many electronics, is in short supply in the U.S. With the country heavily relying on China for lithium, President Biden has been working to change this, aiming for more domestic production.
The loan will fund the construction of a lithium processing facility in rural Nevada, set to supply major EV makers like Ford by 2028. This facility will help reduce the U.S.’s reliance on foreign sources and support the growing demand for clean energy. The loan is nearly 50% higher than the initial offer made two years ago, showing increased confidence in the project’s potential.
What changed? Well, post-pandemic inflation and new geological studies showed that the Rhyolite Ridge deposit has more lithium than originally thought. That’s a big win for the project’s backers. To sweeten the deal, the loan repayment period has been extended to 20 years, offering even more comfort to investors.
When ioneer first estimated the mine’s cost back in 2020, it was around $785 million. Today, that figure has increased, but the exact number isn’t public yet. James Calaway, ioneer’s chairman, sees the loan as a key milestone in boosting U.S. lithium production. With this funding secured, ioneer is now focusing on finalizing a $490 million equity investment from South African company Sibanye Stillwater.
The loan is being finalized just days before President Biden wraps up his time in office. This quick approval is a significant step, as U.S. mining projects are racing to lock in government support before any potential changes in leadership. After all, many are concerned about funding being blocked if former President Donald Trump returns to office.
So, what’s next for the Rhyolite Ridge project? The goal is to produce 22,000 metric tons of lithium each year, enough to power around 370,000 electric vehicles. The project will also produce boron, a chemical used in products like soap. With both lithium and boron, the project will have two revenue streams, which makes it even more appealing to investors. Right now, the U.S. produces less than 5,000 metric tons of lithium annually, so this is a big step forward.
The loan approval has been in the works since 2021, and it finally closed once ioneer secured its federal permit last October. Construction is slated to begin this year, and the company is already talking to additional financiers to keep the project moving forward.
This loan follows other recent green energy investments, including a $2.26 billion loan for Lithium Americas and a $1.36 billion funding commitment for a new lithium extraction project in California. The Energy Department is confident these projects will help meet U.S. lithium demands by the early 2030s.
This is a huge win for the green energy industry and a step in the right direction for the U.S. to reduce its reliance on foreign lithium sources. Stay tuned for more updates as the Rhyolite Ridge project begins to take shape!
