Syrah Resources gets $107 mln US loan for Louisiana EV battery plant – EQ Mag Pro
The U.S. Department of Energy is lending $107 million to graphite miner Syrah Resources (SYR.AX) to expand an electric vehicle battery parts plant in Louisiana, the first loan in more than 10 years from a special funding program of the department.
Shares of Syrah, which are traded in Australia, rose more than 14% on Tuesday after the news.
President Joe Biden has set aggressive targets for half of all vehicles sold in the United States to be electric-powered by 2030, a goal that will require more domestic processing of EV building blocks.
While the special funding program, known as the Advanced Technology Vehicles Manufacturing (ATVM) loan program, has lent to automakers Ford Motor Co (F.N) and Tesla Inc (TSLA.O) in the past, the Syrah loan would be the first not directly to an automaker.
“The U.S. is serious about onshoring the battery manufacturing and critical materials supply chains,” Jigar Shah, head of the Energy Department’s Loan Programs Office, told Reuters. He estimated the United States only has about 5% of the manufacturing capacity needed to hit Biden’s 2030 target.
The loan is conditional pending final paperwork. Syrah said it expects the loan to close by June and funds to be dispersed by September. U.S. Energy Secretary Jennifer Granholm approved the conditional loan offer.
Lithium Americas Corp (LAC.TO), ioneer Ltd (INR.AX), Lordstown Motors Corp (RIDE.O) and Piedmont Lithium Inc (PLL.O) have said they also have applied for ATVM loans.
Australia-based Syrah plans to use the loan to help fund the expansion of a Louisiana plant that will process graphite mined from Mozambique into anodes, the positively charged electrode of a battery. The facility is expected to produce enough anodes to build 2.3 million EVs by 2040.
Syrah, which has a deal to supply anodes to Tesla starting in 2024, completed a stock offering in February to help further fund the $176 million project.
Importantly for Shah’s office, Syrah said its mine follows sustainable mining practices and most of the mine’s employees are Mozambican, with independent auditors verifying the claims. The Louisiana facility is expected to create about 150 construction jobs and 98 full-time jobs.
“The loan will allow Syrah to … support the rapidly growing EV and battery supply chain in the USA,” said Shaun Verner, Syrah’s managing director.
By Congressional mandate the ATVM program is not allowed to fund construction of new mines, but it can fund processing facilities. Shah’s office is reviewing more than $2 billion in other critical mineral loan applications.
Shah said Syrah’s loan was processed in about five months because the company was quick to respond to information requests, though he said other loan applications will take longer.
“The vast majority of applicants aren’t ready,” Shah said. “We need all of our questions answered to be able to process a loan.”
Source: Reuters
