The loan includes a 20-year term with interest rates far more favorable than those likely to be obtained in private financial markets. (Screengrab from DOE Loans Programs office)
In an effort to strengthen the nation’s domestic battery supply chain and electrify the transportation sector, the federal government closed a $996 million loan guarantee for a controversial lithium mine on the habitat of an endangered Nevada wildflower.
On Friday, the Department of Energy (DOE) announded it had finalized the nearly $1 billion loan to support the development of Ioneer’s on-site processing facility at the Rhyolite Ridge Lithium-Boron Project in Esmeralda County.
The project, which received federal permits in October last year, would be the first new lithium mine in the US in almost 60 years if it meets its schedule to be operational by 2026. There is currently only one lithium producing mine in the U.S., Albemarle’s Silverpeak mine in Esmeralda County.
In October, the DOE loans program finalized a $2.3 billion loan for another Nevada mine, the Lithium Americas Thacker Pass project. That mine is scheduled to enter “phase 1” operations by 2027.
Once operational, Ioneer’s massive 7,000 acre Rhyolite Ridge project is expected to quadruple the U.S. domestic lithium supply and support the production of more than 370,000 electric vehicles a year.
“Rhyolite Ridge is fully permitted and construction ready. This loan demonstrates the United States’ confidence in and importance of our lithium-boron mine project,” said Bernard Rowe, the managing director for Ioneer, in a statement.
The final loan under the DOE’s Advanced Technology Vehicles Manufacturing Loan Program marks an increase of $268 million in funding for Ioneer compared to the conditional commitment the federal government offered in January 2023.
Once finalized, the loan cannot be reversed by incoming President Donald Trump, who vowed to claw back unspent Inflation Reduction Act funding that has been tapped to help finance projects the Biden administration was backing as part of a transition to less reliance on fossil fuels.
The loan includes a 20-year term with interest rates fixed at the U.S. Treasury Rate, an interest rate that is far more favorable than those likely to be obtained in private financial markets.
Ioneer said their next steps will be to close a conditional funding agreement with South African mining company Sibanye-Stillwater Limited for $490 million, and secure additional funding needed to start the project. The $996 million federal loan is meant to fund the mine processing facilities and associated infrastructure, not for the development and operation of the open pit mine.
Construction for the project is targeted for late 2025, with first production expected in 2028, Ioneer said.
The project has attracted fierce opposition from conservation groups which oppose the mine’s encroachment on critical habitat reserved for the endangered wildflower Tiehm’s buckwheat. The flower grows on just 10 acres of lithium-boron rich soil near the Silver Peak Range in Esmeralda County.
A coalition of conservation groups is currently suing the U.S. Department of the Interior and affiliated agencies for allegedly violating several federal laws by approving the mine without properly ensuring the mine would not jeopardize the survival of the Tiehm’s buckwheat or adversely affect federally protected habitat.
If constructed, the mine would directly disturb about 191 acres of the wildflower’s federally protected critical habitat. The elimination of nearly 200 acres of habitat would likely cause habitat fragmentation, increase invasive species, and harm insects and other pollinators the wildflower relies on for survival, say scientists.
“It’s very disappointing that the Biden administration is using taxpayer money to subsidize extinction on its way out the door,” said Patrick Donnelly, Great Basin director at the Center for Biological Diversity, which is part of the lawsuit. “Scientists have made themselves clear that the proposed Rhyolite Ridge Mine would drive the rare wildflower Tiehm’s buckwheat extinct, while indigenous people have stated that it will destroy their sacred places.”
Ioneer argues the Rhyolite Ridge Lithium-Boron Project will feature environmentally conscious innovative technology, including steam power operation independent from the Nevada grid, and will recycle 50% of water used.
“Ioneer looks forward to bringing these urgently needed materials to market and is proud to set the new standard for modern mining operations and community engagement,” said Rowe, the managing director for Ioneer.
Projects like the Ioneer’s Rhyolite Ridge lithium mine are central to the Biden Administration’s commitment to transition to a net-zero emissions economy by 2050 and ensure that half of all new vehicles sold in 2030 are electric, said the U.S. Department of Energy.
Electric vehicles fueled by the project are expected to reduce annual gasoline consumption by nearly 176 million gallons and reduce the release of 1.56 tons of carbon dioxide each year, according to the agency.
“The need for domestically sourced and processed lithium and boron has never been greater. The United States requires Rhyolite Ridge and more projects like it if we want to secure domestic critical mineral production. It’s as simple as that,” said James Calaway, Executive Chairman of Ioneer, in a statement.
Construction of the mine will require a workforce of 500 people for four years, and a workforce of 350 people to work on quarrying and processing over 14 years. Ioneer expects the mine to generate an estimated $125 million in wages annually during the life of the mine.