The US Department of Energy has finalized a $996 million loan for ioneer’s Rhyolite Ridge lithium project, according to documents reviewed by Reuters, an increase of $296 million from a preliminary funding offer and a move aimed at boosting President Joe Biden’s green energy legacy.

Scant US production of lithium, an ultralight metal used to make batteries for electric vehicles and many consumer electronics, has left the country reliant on supplies from market leader China, an imbalance that the outgoing Biden has tried the past four years to offset.

The loan, details of which have not been reported, is nearly 50% larger than a conditional funding commitment made two years ago and cannot be reversed by incoming President Donald Trump.

Funds will be used to build a lithium processing facility in rural Nevada that will supply Ford and other EV manufacturers by 2028.

The increased funding was due to post-pandemic inflation and new geological studies showing the Rhyolite Ridge deposit, located roughly 225 miles (362 km) north of Las Vegas, contains more lithium than estimated two years ago, a senior Energy Department official told Reuters.

“That gave everyone more comfort that this was a far better resource than originally imagined,” said the official. The Energy Department also doubled the loan’s repayment timeline to 20 years.

Australia-based ioneer had estimated the mine’s cost at roughly $785 million in 2020. While company officials have acknowledged that figure is now much higher, they declined to provide an updated estimate.

James Calaway, ioneer’s chairman, said the loan closing represented an important milestone for increasing US lithium output.

Calaway said the company would now work to close a $490 million equity investment that South Africa-based Sibanye Stillwater agreed to in 2021. A Sibanye spokesperson said the company is in final due diligence related to ioneer’s project.

The government loan for ioneer comes less than three days before Biden leaves office and is one of the last actions taken by Biden-appointed Energy Department staff, who are returning government-issued laptops and cell phones on Friday.

Last August, Reuters reported that US mining projects were rushing to close government loans out of concern that Trump could block funding if reelected.

Loan details

The Rhyolite Ridge project aims to produce 22,000 metric tons of lithium annually, enough to produce 370,000 EVs, as well as boron, a chemical used to make soaps. That would give the project two sources of revenue, a key appeal to Energy Department loan officials. The US produces less than 5,000 metric tons of lithium annually.

The ioneer loan had been in review since 2021 and approval required the project to receive its federal permit, which Biden granted last October. Even still, the permit did not immediately lead to the loan’s closure and required more paperwork and negotiation.

The company will be able to access the funds in tranches once it raises additional equity, per Energy Department guidelines. Calaway said that ioneer is talking with other potential financiers.

Construction is slated to begin later this year. The loan includes $968 million of principal and $28 million of capitalized interest.

Biden officials in the past month have also finalized a $2.26 billion loan for Lithium Americas and announced a $1.36 billion conditional funding commitment for a direct lithium extraction project in California.

The Biden administration is “fully confident” that the three projects should be able to meet US lithium needs by the early 2030s, said the Energy Department official.

(By Ernest Scheyder; Editing by Veronica Brown and Toby Chopra)