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Biden's DOE has awarded nearly $25 billion of conditional

loans

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Sources say some loans won't be finalized before January

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Domestic projects key to energy transition could be frozen

By Ernest Scheyder

Aug 29 (Reuters) - U.S. miners and battery recyclers are

rushing to close government loans worth billions of dollars

before January out of concern that former President Donald Trump

would, if reelected, block funding needed to boost American

output of critical minerals for the energy transition.

Tumbling prices this year for lithium, nickel and other

minerals, as well as lower-than-expected EV sales, have spooked

private financiers and put the traditionally conservative mining

industry in the unusual position of needing Washington's support

to grow and counter what the West sees as China's market

manipulations.

Under President Joe Biden, the U.S. Department of Energy's

Loan Programs Office (LPO) has awarded nearly $25 billion in

conditional loans to 21 companies, including Li-Cycle ( LICY ),

ioneer, Lithium Americas ( LAC ), Redwood Materials

and others planning to build facilities that recycle batteries

or process lithium and other minerals for use in electric

vehicles. Such conditional loans still need final approval,

which takes time.

Solar companies, including South Korea's Qcells, and

hydrogen firms, including Plug Power ( PLUG ), have also

received conditional loans, yet their plans rely in part on

domestic supply of critical minerals, thus making the funding

for mines crucial for the U.S. energy transition.

The average LPO loan is for $1 billion and each must be

reviewed by the office and others across government - including

engineers, financial experts and even Energy Secretary Jennifer

Granholm - before funds are dispersed.

Given Trump's pledge to "end the electric vehicle mandate"

and plans laid out by former Trump administration officials in

the Project 2025 document to shutter the LPO, mining companies

and others are rushing to close the loans before Biden leaves

office in five months. Some are likely to fall short given the

short timeframe, according to interviews with more than two

dozen industry executives, consultants, investors, analysts and

policymakers.

Without those financial lifelines, all of the sources say,

many domestic critical minerals projects could be frozen in the

planning stage, a step that could cripple the Western EV supply

chain as Beijing-linked rivals boost market share by flooding

global markets with cheap supplies of metals.

One executive with a loan pending before the LPO said Trump

was "a wild card," so the company was keen to get its loan

finalized before a new president takes office in January. The

executive was one of five interviewed for this article who,

along with other experts in the field, declined to be identified

so as not to offend Trump, a Republican, or Vice President

Kamala Harris, his Democratic rival in the Nov. 5 election.

Trump has tried to distance himself from Project 2025,

although much of its energy-related portions were written by

aides from his first term.

LPO staff members have told applicants they will be unable

to finalize many outstanding loans before January given the need

to closely scrutinize each project's credit worthiness and other

factors, with most loans by necessity falling to the next

president to address, three sources with direct knowledge of the

conversations said.

The Harris and Trump campaigns did not respond to requests

for comment.

The U.S. Department of Energy, which controls the LPO, said

the loan program has "provided a bridge to bankability for

American entrepreneurs and innovators for almost 20 years" and

holds "responsible stewardship of taxpayer money" as a key

priority.

"Federal programs like ours regularly continue across

administration changes," said an Energy Department spokesperson.

Harris, who cast the tie-breaking vote for the Inflation

Reduction Act in 2022, is expected to continue many of the

climate policies implemented by Biden, although her aides told

Reuters she is being strategically ambiguous with energy

proposals.

The LPO employs roughly 400 people, up from 90 when Biden

and Harris took office in January 2021.

Trump issued only one LPO loan during his first term by

lending to a Georgia nuclear project that had previously

received loans under then President Barack Obama. The LPO was

sidelined during the rest of Trump's term, although his

administration did update lending policies a month before

leaving office to invite critical minerals projects to apply.

Much of the uncertainty with a Trump second term, according

to the sources, centers on how he would implement funding

portions of the IRA, which boosted LPO funding yet was opposed

by Trump. While Trump couldn't unilaterally close the LPO as it

is congressionally funded, he could slow-walk the loan

underwriting process to such a degree that applicants walk away.

Plug Power ( PLUG ), which is building multiple U.S. hydrogen plants,

said it is working closely with the Energy Department to

finalize its $1.66 billion loan. "Given the resilience of

(Department of Energy) programs through previous administration

changes, we remain confident that subsequent administrations

will continue to support projects that have received prior

conditional approval," Andy Marsh, Plug Power's ( PLUG ) CEO, told

Reuters.

MINING PROJECTS

The LPO, which gave Tesla a $465 million loan in 2010 to

stave off bankruptcy, has been meticulous in its loan review

process under Biden, with more than two-thirds of applicants

requiring help to navigate the complex credit review process

that slows down the loan approval timeline, LPO chief Jigar

Shah, told Reuters last year.

For U.S. mining projects, any delay in funding could imperil

plans to supply cathode and battery facilities, many of which

are also in line for LPO funding.

In Nevada, ioneer is pushing to close a $700 million LPO

loan for its Rhyolite Ridge lithium project, which is estimated

to eclipse $1 billion in cost. And General Motors ( GM )-backed

Lithium Americas ( LAC ) has begun work on its nearly $3 billion Thacker

Pass lithium project, which Trump approved five days before

leaving office. The bulk of the project's funding will come from

a $2.26 billion LPO loan that the company expects to close by

December.

"We're pleased that our project was supported by the Trump

and Biden administrations," said a spokesperson for Lithium

Americas ( LAC ). "They both have expressed the importance of Thacker

Pass in securing a domestic supply of critical minerals."

Australia-based ioneer did not respond to requests for

comment.

Recycling startups Li-Cycle ( LICY ) and Redwood are also rushing to

close LPO loans. Redwood was conditionally approved for a $2

billion loan that it expected to close last year, but the

company is still waiting for funding.

Li-Cycle ( LICY ) said it continues "to work closely with the U.S.

Department of Energy on key technical, financial and legal

workstreams to advance towards definitive financing

documentation for a loan."

Representatives for Redwood and Qcells did not respond to

requests for comment.

Another executive with a loan pending before the LPO said

they believe Trump understands that EVs will grow in popularity,

a stance echoed by some Republicans.

Yet whether Trump would see the value in using U.S.

industrial policy to support miners and others in a potential

second term - or whether he will hew more toward Project 2025's

aims - is fueling anxiety among executives looking now to make

decisions that will affect their companies for years.

A third executive with a pending loan said it was not

clear whether Trump's statements on the subject were "rhetoric

or actual policy."