US DOE extends loan proposal to Ioneer for Nevada lithium project

The US Department of Energy Loan Programs Office finalized a term sheet and offer of a conditional commitment on Jan. 13 for a proposed loan of up to $700 million offered to Ioneer that will support the lithium asset developer's advancement of its Rhyolite Ridge Lithium-Boron Project in Nevada.

The DOE's proposed loan will be distributed through its Advanced Technology Vehicles Manufacturing program for a term of about 10 years with an interest rate fixed from the date of each advance for the term of the loan at applicable US Treasury rates, according to the statement.

Ioneer aims to produce up to about 24,000 mt/year of either lithium carbonate or lithium hydroxide at Rhyolite Ridge starting as early as 2025. The company is developing the project with support from global mining major Sibanye-Stillwater, which can acquire a 50% interest in a joint venture involving Rhyolite Ridge if certain conditions are met.

"The conditional commitment highlights Rhyolite Ridge's strategic role in strengthening America's critical mineral supply chain in providing a secure, sustainable and reliable domestic source of lithium for the growing electric vehicle ecosystem," Ioneer Executive Chairman James Calaway said in a statement.

The final loan decision and amount will be based on several conditions that include upcoming final rulings from the Bureau of Land Management and updates to project cost estimates, resource and reserve statements, mine plan, economic model and permits. The loan is also contingent on final investment decisions from Ioneer and Sibanye-Stillwater.

"The conditional commitment is the culmination of 23 months of discussions with and due diligence by the Loan Programs Office, and it represents a significant milestone for Rhyolite Ridge," Ioneer Managing Director Bernard Rowe said.

Ioneer is based in Australia with US headquarters in Reno, Nevada.

Sibanye-Stillwater CEO Neal Froneman said the proposed loan is significant for the company's goal of building a battery metals strategy in the US and Europe.

"Rhyolite Ridge is a world-class lithium project which is ideally positioned to provide locally mined and beneficiated metals to further develop the US battery ecosystem," Froneman said. "The proposed loan represents a significant step towards further de-risking funding and ultimately progressing Rhyolite Ridge to production."

US banking on battery metals

US policy and funding has heavily targeted the battery metals industry since the second half of 2022. In October, the Biden administration unveiled $2.8 billion in federal funding under the Bipartisan Infrastructure Law for domestic critical minerals projects that included grants to several US companies within the battery material and electric vehicle supply chains.

The $2.8 billion package was followed by a November announcement from the DOE that said it would distribute a $12 million funding package to support the buildout of domestic operations capable of extracting and converting lithium from geothermal brines. That same month, the DOE said it would grant $74 million to 10 companies to advance domestic technologies related to electric vehicle battery recycling and reuse.

In December, the DOE closed a $2.5 billion loan to Ultium Cells to help finance the construction of three lithium-ion battery cell manufacturing facilities in the country.

Furthermore, the US' Inflation Reduction Act will start providing tax credits this year to electric vehicle manufacturers and consumers based on the local sourcing of battery materials and components. To qualify for the credit, a certain percentage of the materials in the vehicle's battery must be sourced from the US or its free-trade partners.