On Jan. 13, the U.S. Department of Energy Loan Programs Office executed a term sheet and offering of a conditional commitment for a proposed loan for up to USD 700 million offered to Ioneer that will bolster the lithium asset owner's advancement of its Rhyolite Ridge Lithium-Boron Project in Nevada.
The DOE’s loan will be funded under its Advanced Technology Vehicles Manufacturing program and is being given for a term of approximately 10 years at an interest rate from the date of each advance, fixed for the term of the loan at applicable US Treasury rates, according to the statement.
Ioneer plans to produce approximately 24,000 mt/year of lithium carbonate or lithium hydroxide at Rhyolite Ridge by as early as 2025. The project is being developed by the company with the backing of global mining major Sibanye-Stillwater, which can earn a 50% stake in a joint venture related to Rhyolite Ridge under certain conditions.
“The issuance of the conditional commitment underscores Rhyolite Ridge’s strategic position in fortifying America’s critical mineral supply chain by offering a secure, sustainable, and reliable domestic source of lithium to power the approved electric vehicle ecosystem in the U.S.,” Ioneer Executive Chairman James Calaway said in a statement.
The final loan decision and amount will depend on several conditions, including subsequent final decisions by the Bureau of Land Management and updates to estimates of project costs, resource and reserve statements, mine plan, economic model, and permits. The loan is also conditional on final investment decisions by Ioneer and Sibanye-Stillwater.
“The conditional commitment is the result of 23 months’ collaboration and due diligence by the Loan Programs Office and is a major milestone for Rhyolite Ridge,” Bernard Rowe, the managing director of Ioneer, said in a statement.
Ioneer is headquartered in Australia with its US headquarters located in Reno, Nevada. Sibanye-Stillwater CEO Neal Froneman noted the importance of the proposed loan in the company’s plan to establish a battery metals strategy in the US and Europe. “Rhyolite Ridge is a world-class lithium project that is strategically positioned to deliver locally mined and beneficiated metals as a platform to grow the US battery ecosystem,” Froneman said. “The proposed loan is a significant step towards further de-risking funding and realising production at Rhyolite Ridge.”
Banking on battery metals, US policy and aid have centred around the battery metals industry since the second half of 2022. In October, the Biden administration unveiled USD 2.8 billion of federal funding under the Bipartisan Infrastructure Law to finance US critical minerals projects, including grants to a range of US firms working on battery material and electric vehicle supply chains. The package was followed by a USD 12 million funding package from the DOE in November, which would be disbursed to support the development of US operations that could extract and convert lithium from geothermal brines. The DOE also announced it would award USD 74 million to 10 firms to advance US domestic technology aimed at the recycling and reprocessing of electric vehicle batteries that same month. In December, the DOE closed a USD 2.5 billion loan for Ultium Cells to support the construction of three lithium-ion battery cell factories in the country. In addition, the US’ Innovations in the Inflation Reduction Act would start issuing tax breaks for electric vehicle manufacturers and purchasers based on the US production origin of their battery compounds and components. The credit would only be available if a certain percentage of the materials used in the vehicle’s battery can be sourced by the US or US free-trade partners.
