Rhyolite Ridge Lithium Project Secures $996 Million Loan to Strengthen Domestic Supply

The U.S. Department of Energy has approved a $996 million loan for Ioneer’sIONR 0.00%↑ Rhyolite Ridge Lithium-Boron Project in Nevada. The loan is part of an ongoing effort to boost domestic production of materials critical to electric vehicle (EV) batteries and battery energy storage systems (BESS) and reduce dependence on foreign sources of lithium. The project, located in Esmeralda County, is expected to produce enough lithium carbonate annually to support the manufacturing of about 370,000 EVs. Additionally, it is forecasted to generate around 600 construction jobs and 250-300 permanent jobs once operational, providing an economic boost to the region.

The DOE’s first loan for a lithium project went to Lithium Americas Corporation LAC 0.00%↑ for the Thacker Pass Lithium Project, another Nevada-based operation. The Thacker Pass loan is a $2.26 billion loan from the U.S. Department of Energy (DOE) to Lithium Nevada Corp. The loan was finalized on October 28, 2024. Following Thacker Pass and Rhyolite Ridge, other Nevada projects have entered the spotlight, including the Tonopah Flats Lithium Project by American Battery Technology Company ABAT 0.00%↑ , which received a DOE grant for $57 million for the construction of a Lithium Hydroxide processing plant, and Century Lithium’s $CYDVY Angel Island Mine, which will achieve commercial-scale production by 2030 using a hybrid DLE system based upon Li-Pro™ from Koch Technology Solutions.

These projects, along with a number of promising brine projects in Utah—including the Paradox Lithium Project from Anson Resources (OTC $ANSNF / AUX- $ASN.AX) which is deploying pilot and pre-commercial scale plants to prove the viability of 100% DLE projects—highlight the growing prominence of lithium production in the American Southwest. These projects are among those expected to significantly boost U.S. lithium output by the end of the decade, contributing to national security and strengthening America’s electric infrastructure.

Lithium’s Role in Energy and Security

Lithium is central to the nation’s energy initiatives and plays a strategic role in ensuring national security. Batteries for energy storage and the ruggedization and replacement of thermal peaking plants are vital components in creating a stable and reliable electric infrastructure. EVs, along with cleaner technologies for producing electricity from fossil fuels along with renewables, are essential for reducing air pollutants and the dependency on entities like the UAE for oil. The push to establish a secure domestic supply chain for lithium and other critical materials began during President Trump’s first term, with policies aimed at reducing reliance on foreign sources. President Biden expanded on these efforts by increasing funding and regulatory incentives, further advancing the domestic supply chain for critical materials. President Trump’s second term is expected to accelerate these efforts, reflecting a bipartisan acknowledgment of the importance of critical materials for the nation’s economic and energy future.

Addressing Environmental Concerns at Rhyolite Ridge

The Rhyolite Ridge project has faced scrutiny over its potential impact on Tiehm’s buckwheat (Eriogonum tiehmii), a rare and endangered plant found only in Nevada’s Silver Peak Range. The plant’s habitat overlaps with the proposed mining area, raising concerns from environmental groups about its preservation.

Ioneer has actively worked to mitigate these concerns. The company has collaborated with the U.S. Fish and Wildlife Service to develop a conservation plan aimed at protecting the species while advancing the project. Measures include setting aside undisturbed habitat within the project area, funding studies to understand the plant’s biology, and developing propagation techniques to ensure its survival. Ioneer has also successfully cultivated Tiehm’s buckwheat in controlled environments, providing a safety net for the plant. Mining operations will proceed only under strict environmental guidelines and after obtaining necessary federal permits.

Operations:

Ioneer developed a detailed process flowsheet for the Rhyolite Ridge Lithium-Boron Project, which outlines the steps involved in extracting and processing lithium and boron from the ore. This flowsheet has been refined through extensive testing, including the operation of a pilot plant over two years that processed over 30 tonnes of Rhyolite Ridge ore. Kemetco Research Inc, one of Canada’s largest contract research and development laboratories, operated the pilot plant under the oversight of ioneer’s process team.

The process flowsheet includes the following key steps:

1. Ore Crushing and Grinding: The ore is crushed and ground to liberate lithium and boron minerals.

2. Sulfuric Acid Leaching: The ground ore undergoes vat leaching with sulfuric acid to dissolve lithium and boron into solution.

3. Impurity Removal: The leach solution is treated to remove impurities, ensuring the purity of the final products.

4. Boron Recovery: Boron is extracted from the solution and crystallized as boric acid.

5. Lithium Carbonate Production: Lithium is precipitated from the solution as lithium carbonate.

6. Lithium Hydroxide Conversion: From the fourth year of operation, lithium carbonate will be converted into battery-grade lithium hydroxide using the liming method.

This process is designed to produce high-quality boric acid and lithium hydroxide with overall recoveries of 85% for lithium carbonate, 95% for the lithium hydroxide circuit, and 79% for boric acid. The inclusion of a sulfuric acid plant on-site will generate the necessary acid for leaching, steam for evaporation and crystallization, and electricity to power the entire facility, making the process energy-neutral with zero carbon dioxide emissions from electricity generation.

For a visual representation of the process flowsheet, you can refer to Figure 14.7: Rhyolite Ridge Process Block Flow Diagram in the Technical Report Summary available on the SEC’s website.

Additionally, Ioneer has provided a video tour of a rendering of their plant:

A Broader Context for the Lithium Industry

Over the next decade, the demand for lithium is expected to rise significantly, driven by the increasing need for energy storage systems and the growing electric vehicle (EV) market. Lithium-ion batteries are essential for stabilizing power grids by storing energy, ensuring a reliable supply of electricity even when renewable production fluctuates. Additionally, the transition to electric vehicles will reduce reliance on fossil fuel-powered transportation, helping to remove pollutants such as nitrogen oxides (NOx) and carbon monoxide (CO) from urban areas. With these sectors expanding rapidly, lithium demand is projected to outpace current production levels, creating a need for new mining projects and advancements in processing.

In the short term, the demand for lithium will primarily be met by a combination of domestic secondary sources and foreign sources. Recycling infrastructure is still in its early stages, and many lithium-ion batteries have not yet reached the end of their life cycle. While the recycling of lithium will increase over time, for the next decade, the majority of lithium required for battery production will come from newly mined sources, including imports. As recycling technology develops and more batteries reach their disposal phase, the contribution from recycled lithium will grow, but it will still only cover a small portion of the overall demand.

DISCLAIMER: This article should not be construed as a offering of investment advice nor should any statements (by the author or by other persons and or entities that the author has included) in this article be taken as investment advice or recommendations of any investment strategy. The information in this article is for education purposes only. The author did not receive compensation from any of the companies mentioned to be included in the article.