The U.S. Department of Energy is lending $107 million to graphite miner Syrah Resources Ltd to build an electric vehicle battery parts facility in Louisiana, the first loan in more than 10 years from the department’s Advanced Technology Vehicles Manufacturing (ATVM) funding program.
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 ATVM program has lent to automakers Ford Motor Co and Tesla Inc in the past, the Syrah loan is 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.
Lithium Americas Corp, ioneer Ltd, Lordstown Motors Corp and Piedmont Lithium Inc 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 facility 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 review $2 billion in other 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.”
(By Ernest Scheyder; Editing by Barbara Lewis)