In a major push to secure the United States’ position in the global electric vehicle (EV) and battery manufacturing markets, the Biden administration has finalized a nearly $1 billion loan for ioneer’s Rhyolite Ridge lithium project in Nevada. The U.S. Department of Energy (DOE) approved a $996 million loan for the project, increasing the initial funding offer by $296 million.

Lithium, a critical component in the production of EV batteries and many consumer electronics, has become a focal point in the U.S.’s efforts to accelerate its energy transition. Currently, the U.S. produces less than 5,000 metric tons of lithium annually, far below the demand required for the growing electric vehicle industry. The Rhyolite Ridge project, located approximately 225 miles north of Las Vegas, is set to play a significant role in addressing this shortfall.

Construction of the Rhyolite Ridge lithium processing facility is slated to begin later this year, with the loan funds being disbursed in tranches as ioneer raises additional equity. The project’s approval follows the issuance of a federal permit in October 2024, which cleared the way for the loan and the subsequent construction phase.

The loan increase follows new geological surveys that revealed a larger lithium deposit at the Rhyolite Ridge site than previously estimated. The DOE official overseeing the project noted that the updated resource estimate provided greater confidence in the project's viability, contributing to the decision to increase the loan amount. Additionally, the DOE extended the loan’s repayment period to 20 years, offering further flexibility for ioneer, an Australian-based company, as it works to scale up production.

This $996 million loan is part of a broader strategy by the Biden administration to foster domestic lithium production and reduce the country’s dependence on international sources, especially China, the dominant global supplier. The project aims to produce 22,000 metric tons of lithium annually by 2028, enough to support the production of 370,000 electric vehicles. The mine will also produce boron, a byproduct used in various industrial applications.

James Calaway, chairman of ioneer, hailed the loan’s finalization as a crucial milestone for the company and the broader U.S. lithium industry. He emphasized that the loan would help increase U.S. lithium output and contribute to the development of a robust domestic battery supply chain. To further bolster the project’s funding, ioneer is in the process of finalizing a $490 million equity investment from South Africa-based Sibanye Stillwater.

The Biden administration has also been actively securing other funding for U.S. lithium projects, including a $2.26 billion loan for Lithium Americas and a $1.36 billion conditional funding commitment for a direct lithium extraction project in California.