Lithium CEO pledges to forge ahead on project without US grant

American Battery Technology Co. will continue work on a more than $2 billion lithium mine and refinery project in the Nevada desert despite cancellation of a US Department of Energy grant.

The battery metals recycler lost more than one-third of its market value on Thursday after disclosing the termination of a government grant intended to help finance plant construction. American Battery is the latest clean energy company stung by President Donald Trump’s reversal of Biden-era green policies and incentives.

“We’re still going to go forward,” chief executive officer Ryan Melsert said in an interview, adding that completion is still targeted for late 2027. The company raised $52 million in recent months from public markets after the Energy Department signaled plans to audit billions in previously approved payouts, and that figure is sufficient to cover costs that would have been paid with the grant.

The termination comes amid an escalating trade war between the US and China in which batteries are a key source of leverage for the minerals-rich Asian nation. The Trump administration has repeatedly emphasized the importance of elements such as lithium that are key components in energy storage, electric vehicles and consumer electronics. Meanwhile, China last week increased curbs on rare earths exports and other critical materials, triggering an angry response from Trump that sank global markets.

“It was very ironic that both of those happened the same day,” Melsert said, referring to China’s escalation and the grant termination. He added that there are numerous battery factories in the US that need lithium to operate. “It seems inconsistent.”

American Battery shares soared 1,000% jump in the year ending with Tuesday’s close of trading, only to plummet more than 20% and 35% in the following two sessions, respectively.

The grant awarded in 2023 would have helped finance design and construction of a plant to manufacture battery-grade lithium, according to the filing Wednesday.

The Energy Department notified American Battery of the cancellation on October 9, the Nevada-based company said. As of that date, there was $52 million in reimbursable funds remaining out of a total $58 million, according to the filing. The company immediately appealed the termination and waited four business days before disclosing the news to investors.

“As it relates to this particular grant cancellation: what makes it surprising is that the Trump administration has generally looked positively on domestic manufacturing of clean energy hardware, because this helps to reduce dependence on imports from (especially) China,” Pavel Molchanov, an analyst at Raymond James, wrote in an email.

American Battery is open to partnering with a large lithium miner as the project progresses, Melsert said. “As we continue to grow this project, that is a possibility,” he said. The company also operates a 137,000 square foot lithium-ion battery recycling plant in Nevada that strips metal out of utility-scale batteries as well as batteries from EVs, e-bikes and consumer electronics.

The Energy Department didn’t respond to requests for comment.

(By Josh Saul and Mark Chediak)