
The U.S. Department of Energy has finalized a $996 million loan for ioneer’s Rhyolite Ridge lithium project in Nevada, a significant increase of $296 million from its initial offer. The decision reflects both rising inflation and larger-than-expected lithium reserves, according to documents reviewed by Reuters.
Shares of ioneer surged 15% to $4.96 in Friday’s trading session following the announcement.
The move bolsters President Joe Biden’s commitment to reducing reliance on lithium imports, particularly from China, as part of a broader strategy to accelerate domestic green energy production. The loan, which cannot be reversed by incoming President Donald Trump, will fund a lithium processing plant set to supply automakers like Ford by 2028.
Enhanced Resources Drive Larger Loan
Post-pandemic inflation and updated geological studies revealed that the Rhyolite Ridge deposit, located 225 miles north of Las Vegas, contains significantly more lithium than earlier estimated. This prompted an increase in the loan amount and an extended repayment period of 20 years.
“That gave everyone more comfort that this was a far better resource than originally imagined,” a senior Energy Department official said.
The project aims to produce 22,000 metric tons of lithium annually, enough to power batteries for approximately 370,000 electric vehicles. It will also generate revenue from boron, a chemical used in industrial products.
Closing Milestones
The funding marks a critical step for ioneer, which is now focused on securing a $490 million equity investment from South Africa-based Sibanye Stillwater. A Sibanye spokesperson confirmed that the company is finalizing due diligence.
Construction on the processing plant is set to begin this year, with loan disbursements tied to additional equity raises.
Green Energy Legacy
The loan is one of the final initiatives of Biden’s presidency, coming just days before his departure from office. The administration has also approved significant funding for other lithium projects, including a $2.26 billion loan for Lithium Americas and $1.36 billion in conditional funding for a California-based direct lithium extraction project.
The Energy Department expressed confidence that these investments would meet U.S. lithium needs by the early 2030s, reducing dependence on foreign suppliers and strengthening the nation’s EV supply chain.