Australian mining firm Syrah Resources has been offered a $107 million loan from the US Department of Energy (DOE) to fund the expansion of its lithium-ion battery material facility in the US.
The cash will be used to expand production at the Louisiana Vidalia plant to 11.25ktpa of active anode material as the US struggles to deliver a lithium-ion materials supply chain to meet its demands.
The loan is through the firm’s wholly owned subsidiary Syrah Technologies and is subject to fulfilling remaining legal, contractual, and financial requirements.
Syrah and DOE are targeting financial close of the loan by the end of June 2022 and first advance of the loan in the September 2022 quarter.
Under the term sheet, the loan has a term of up to 10 years from financial close.
The term sheet and Conditional Commitment have been approved by DOE.
Director of DOE’s Loans Programs Office Jigar Shah said: “This reiterates president Biden’s commitment to strengthening US critical mineral supply chains and growing the US workforce to support domestic battery manufacturing for EVs.
“Moreover, the Vidalia Initial Expansion project provides a socially and environmentally responsible US supply chain for graphite, which is critical to accelerating the deployment of batteries to power EVs.”
Biden’s battery build out
The proposed loan is to be made under DOE’s Advanced Technology Vehicles Manufacturing (ATVM) loan program in support of the Biden Administration’s critical minerals strategy.
DOE has $17.7 billion in uncommitted loan authority under the ATVM program to support the manufacture of advanced technology vehicles including electric vehicles and qualifying components and materials in the US.
Domestic processing of critical minerals, such as graphite, for use in EV batteries qualifies for the ATVM loan program.
If finalised, the loan to Syrah Technologies would be the first from the ATVM loan program since 2011 and the first ever from the ATVM loan program to a materials processing facility.
Other recipients of funding from the ATVM loan program include vehicle OEMs Ford, Nissan and Tesla.
In June 2021, Syrah applied to DOE’s Loans Programs Office for the ATVM loan with due diligence begun in July 2021.
The Loans Programs Office has subsequently undertaken detailed market, technical and legal due diligence on Syrah, Vidalia and the Vidalia Initial Expansion project using US Government expertise and external specialist consultants.