The US Bureau of Land Management (BLM) has given final approval for Ioneer’s (ASX:INR) Rhyolite Ridge Lithium-Boron Project in Nevada, which is due to become a key supplier of the battery metal to Ford (NYSE:F) and other electric vehicle manufacturers.
Located roughly 362km north of Las Vegas, the project contains enough lithium to power some 370,000 EVs each year. Construction is due to begin next year, with first production slated for 2028. An estimated 500 jobs will be created during the construction phase, and 350 jobs while the project is operational.
“This is a science-based decision,” Laura Daniel-Davis, the Interior Department’s acting deputy secretary, says.
“We’re trying to send a signal that there’s no topic with greater importance than addressing climate change.”
Lithium will be processed on-site into two main products used to make batteries, and Ioneer has said it will recycle half of the water it uses at the project. In addition to lithium, the project will produce boron — a chemical used to make ceramics and soaps — from a clay-like deposit.
“For more than six years, we have worked closely with state, federal and tribal governments, as well as the Fish Lake Valley community, to ensure the sound and sustainable development of our Rhyolite Ridge Lithium-Boron Project,” Ioneer Managing Director Bernard Rowe says.
“We value our relationships with these stakeholders and appreciate their openness to engage, discuss concerns and develop solutions. Without that open and honest dialogue, such an outcome could never have been possible.”
With the permit now in hand, a US$700 million ($1.05 billion) loan from the US Department of Energy has been unlocked, along with a US$490 equity investment from Sibanye Stillwater (JSE:SSW), to fund the project.
Feeding the domestic EV sector
It was in July 2022 that Ford signed a deal with Ioneer to purchase lithium carbonate from Rhyolite Ridge. BlueOvalSK, the automaker’s joint venture with Seoul-based SK Innovation (KRX:906770), will purchase 7,000 tonnes of lithium carbonate for its factory in Kentucky.
In August the same year, Ioneer signed another deal with Prime Planet Energy & Solutions (PPES), a joint venture between Toyota (TYO:7203) and Panasonic (TYO:6752) formed in 2020. According to the agreement, Ioneer will supply 4,000 tonnes of lithium carbonate a year for five years.
The deal includes a commitment from PPES that Ioneer’s lithium be used to build EV batteries within the US for the domestic EV market. PPES, which is based in Japan, has said it intends to build a battery plant in North Carolina.
Countering China
Indeed, the permit for Rhyolite Ridge comes amid a flurry of recent moves by the Biden administration to support US critical minerals production in a bid to counter China’s dominance.
On Thursday, the US Treasury Department said it would allow some mining companies to access a tax credit aimed at boosting American production of solar panels, lithium-ion batteries, and other clean energy components.
Access to the so-called 45X tax credit, which was created under Biden’s Inflation Reduction Act in 2022, was originally proposed in December 2023, and allows for a 10% production credit for US-made products.
However, those draft rules excluded raw materials from the production costs in favour of processing. The mining of lithium, for example, would not have received the credit, while the processing of that lithium into a refined product would.
The mining industry promptly cried foul, and the US Treasury Department reversed itself yesterday, saying the “material costs and extraction costs” would be eligible for the 45X tax credit “provided certain conditions are met”.
This means that a lithium hydroxide processor that also runs a lithium mine would be eligible to receive a 10%-per-tonne credit for the mining as well as a 10%-per-tonne credit for the processing.
For those like Ioneer, that’s welcome news.
“I can say with absolute confidence there are few deposits in the world as impactful as Rhyolite Ridge,” Ioneer Chairman James Calaway says.
“Today’s approval of Ioneer’s federal permit is the culmination of countless hours of work and a testament to our remarkable team’s dedication to developing and building one of the most sustainable mining projects in the country.
“We are pleased by what we have achieved working with the Biden administration, and by the bi-partisan support we have received at the federal, state and local levels.”
Write to Oliver Gray at Mining.com.au
Images: Ioneer
