Lithium company Ioneer said Friday that it’s secured a conditional commitment for a loan of up to $700 million from the Department of Energy as the U.S. seeks to develop new supply chains for materials that are critical to the energy transition.
Ioneer is developing the Rhyolite Ridge Lithium-Boron Project in Esmeralda County, Nevada. When fully operational, the site will produce enough lithium for 400,000 electric vehicles, the company said, while also producing boron.
The plant isn’t yet operational, but Ioneer has already secured offtake agreements with Ford and Toyota. Some experts believe there simply won’t be enough lithium to meet the demand boom fueled by electric vehicles, meaning automakers are increasingly entering agreements with upstream players to secure supplies.
Rhyolite Ridge is a joint venture with miner Sibanye-Stillwater, which owns 50% of the project after investing $490 million in September 2021.
The permitting process for new lithium mines is extensive. Ioneer’s loan from the DOE hinges on several conditions, including that the company receives all of the necessary permits. The company said in December that it’s in the final stage of the federal permitting process. The Center for Biological Diversity has come out against the project, saying it poses an “existential threat” to a rare wildflower.
If approved, the loan, made under the DOE’s Advanced Technology Vehicles Manufacturing program, will be for Ioneer’s on-site lithium processing facility.
Esmeralda County is also home to Albemarle’s Silver Peak facility, which is currently the only operating lithium plant in the U.S.
The U.S. has a lot of lithium, but getting it out of the ground is expensive, and new projects often face opposition over environmental concerns.
Still, Friday’s announcement is the latest in a string of lithium companies announcing new or expanded U.S. plants on the heels of the Inflation Reduction Act. The legislation provides support for lithium companies on the manufacturing side, while also tying the incentives for EV tax rebates to where the vehicle’s battery is produced.
Albemarle is in the process of reopening its Kings Mountain mine in North Carolina, while also doubling the output at its Silver Peak facility.
Piedmont Lithium unveiled plans for a new lithium refining plant in Tennessee in September, and Lithium Americas is in the process of developing its Thacker Pass mine in Nevada. The project has been delayed by years of permitting hurdles.