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Nevada lithium mine receives $700 million conditional loan from government

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RENO, Nevada (AP) – The U.S. Department of Energy announced a $700 million conditional loan on Friday to an Australian mining company to proceed with a lithium project that still faces environmental hurdles in Nevada as the U.S. seeks supplies. households to a key component in electric vehicle batteries.

The move ups the ante in what is already a high-stakes battle over President Joe Biden’s energy agenda and conservationists fighting to protect an endangered wildflower found only at the proposed mine site in a high desert mountain range midway between between Reno and Las Vegas.

Ioneer Ltd. expects to begin mining at Rhyolite Ridge by 2026 in Esmerelda County. Energy’s announcement said the site could produce enough lithium to sustain production of around 370,000 electric vehicles annually for decades.

The loan would be the latest project to demonstrate the Biden administration’s commitment to strengthening the nation’s battery supply chain, electrifying the transportation sector and reducing reliance on fossil fuels and foreign supplies of raw materials, the Department of Energy said. .

Jigar Shah, director of DOE’s Office of Lending Programs, said his office is “excited to further develop an environmentally responsible US supply chain for critical materials.”

“Rhyolite Ridge is an important step towards bolstering domestic lithium production for clean energy technologies,” he said.

James Calaway, executive chairman of Ioneer, said the conditional commitment “highlights the project’s strategic role in strengthening the country’s critical mineral supply chain by providing a safe, sustainable and reliable domestic source of lithium for the growing vehicle ecosystem.” Bernard Rowe, managing director of Ioneer, said it came after 23 months “of discussion and due diligence” by Energy and “represents a significant milestone” for the project.

But the project still faces a significant legal and regulatory challenge in developing a mining operations plan that will provide adequate protection for Nevada’s endangered wildflower, Tiehm’s buckwheat.

The US Fish and Wildlife Service said in declaring it endangered last year that it is on the verge of extinction and that the mining project poses the greatest threat to its survival.

Conservationists have sued in the past to protect the 6-inch tall plant with yellow flowers and vowed on Friday to do so again if necessary.

“What this looks like is a pretty transparent effort by the Biden administration to build political and economic momentum for the bill in an effort to trample the U.S. Fish and Wildlife Service and the Endangered Species Act,” said Patrick Donnelly, director of the Great Basin for the Center for Biological Diversity.

“Ioneer will have to completely review the design of this mine if they hope to pass the permit,” he said in an email to the Associated Press. “We have already sued or initiated lawsuits over Tiehm’s buckwheat four times and we will not back down until all buckwheat is saved.”

The Department of Energy announcement said the Ioneer project is working to minimize the impact on the plant. He said the loan is conditional on the completion of an environmental impact statement under the National Environmental Policy Act (NEPA).

The Biden administration has made a plan for half a million electric vehicle charging stations an important part of its infrastructure goals. That effort, and the growth of electric vehicle companies like Tesla, will require a lot more lithium to make batteries.

Although lithium reserves are widely distributed around the world, the US is home to only one active lithium mine, in Nevada. Worldwide demand for lithium was around 350,000 tons (317,517 metric tons) in 2020, but the industry estimates that project demand will be up to six times higher by 2030.

Shah said that big projects like this move forward step by step.

“We are clearly not investing any capital in the project yet,” Shah said Friday in a telephone interview with the AP. “They still have to meet the conditions. But in doing so, it gives equity investors some comfort that they should continue to invest in the project.”

Senator Jacky Rosen, D-Nev., is among those supporting the bill.

“I applaud the Department of Energy for making this loan to help support the mining and processing of Nevada’s critical minerals, help reduce greenhouse gas emissions, and contribute to job creation in our state,” she said in an announcement.

Lithium is key to the most common battery technology in electric vehicles and electric battery storage systems. But many engineers are working on alternative battery chemistries because lithium involves rock mining, which means great disruption to the environment.

Ioneer is a lithium-focused company based in New South Wales, Australia and Reno.

Another new lithium mining project under development in the US is proposed for Thacker Pass by Lithium Americas near the Oregon line. This mine in northern Nevada would produce millions of tons of available lithium, but it also faces legal challenges. Native American tribes have argued that it is located on sacred land near where dozens of their ancestors were slaughtered in 1865.