Nevada lithium mine project gets $700M conditional loan offer from DOE

Federal loans for Ioneer’s Rhyolite Ridge lithium mining project could expand domestic supplies of a key material for EVs and batteries.

Artist's rendering of a large industrial mining facility in the desert
An engineering rendering of the processing plant that Ioneer Ltd. plans to build at the Rhyolite Ridge lithium-boron mining project in western Nevada (Ioneer Ltd.)
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The U.S. government, on the hunt for domestic sources of lithium to feed the country’s burgeoning battery and electric-vehicle industries, has set its sights on backing a massive lithium mine in western Nevada. 

The Department of Energy’s Loan Programs Office on Friday issued a conditional commitment to lend up to $700 million to Ioneer Ltd.s Rhyolite Ridge Lithium-Boron Project. Ioneer, an Australian company, has partnered with South Africa–based mining company Sibanye-Stillwater and a host of other companies to develop the project, one of a handful of lithium mining and extraction sites being pursued in the U.S.

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The Biden administration has prioritized expanding domestic sources of critical minerals and materials for clean energy manufacturing, both to support its climate agenda and to boost American competitiveness in the international market. Today the vast majority of lithium for lithium-ion batteries is extracted and processed overseas, with Australia dominating hard-rock lithium mining, Chile and Argentina dominating the extraction of the mineral from brines, and China dominating the processing of lithium into battery materials. 

Demand for lithium is projected to exceed current global production capacity by 2030, driving U.S. automakers to seek a robust domestic supply of materials to keep pace,” DOE said in Friday’s statement. Once it’s operating at full scale, the Rhyolite Ridge project is expected to be capable of producing enough lithium carbonate to supply about 370,000 EVs per year.

Ioneer has signed agreements with a battery joint venture of Ford and SK On, a battery joint venture of Toyota and Panasonic, and battery cathode supplier EcoPro Innovation to buy the lithium carbonate to be processed from the minerals mined at the site.

A map of Nevada showing the location of the proposed Rhyolite Ridge Lithium-Boron Project
A map of Nevada showing the location of the proposed Rhyolite Ridge Lithium-Boron Project (Ioneer)

But there are a number of environmental and economic barriers to expanding lithium mining and processing in the U.S. Environmental groups are challenging the Rhyolite Ridge project over its potential impact on Tiehm’s buckwheat, an endangered species of wildflower. Environmentalists and tribal groups are also suing over a separate lithium mining project in Thacker Pass in northern Nevada, arguing it will pollute the land and water. 

Ioneer and its partners have stressed the efforts they plan to take to protect the environment around the Rhyolite Ridge project, including supplying the majority of its power needs from zero-carbon resources, using far less water than typical U.S. mining operations, and committing to protecting and restoring the Tiemh’s buckwheat growing in the area. 

An Ioneer investor presentation from earlier this month identified DOE’s loan commitment as a key source of debt financing for the project, which is expected to require a total capital investment of $785 million. Ioneer has invested $115 million to date in appraising and developing the Rhyolite Ridge project, and Sibanye-Stillwater in 2021 invested $490 million for a 50 percent stake in the project. 

The conditional loan commitment comes from DOE’s Advanced Technology Vehicles Manufacturing Program, which since its 2007 creation has loaned about $8 billion to companies, including to Tesla to build electric-vehicle factories, to Nissan to build an advanced battery manufacturing plant, and to Ford to upgrade facilities in six states to make more fuel-efficient vehicles. 

Under the Biden administration, the program has approved two loans — a $107 million loan to Syrah Technologies, a Louisiana-based processing facility for battery active anode material, and a $2.5 billion loan to Ultium Cells, a joint venture of General Motors and South Korea–based LG Energy Solutions to manufacture battery cells for GM’s electric-vehicle fleet. 

Domestically produced lithium won’t just be coming from mines in Nevada. Projects in California’s Imperial Valley are extracting lithium from superheated brine trapped underground, where state agencies estimate there’s enough of the mineral to satisfy one-third of current global demand.

Jeff St. John is director of news and special projects at Canary Media.