Wary of Trump, US minerals projects rush to close government loans

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 has awarded nearly $25 billion in conditional loans to 21 companies, including Ioneer, Lithium Americas, 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.
Ioneer, Lithium Americas and Carson City-headquartered Redwood Materials all have projects in Nevada.
Solar companies, including South Korea’s Qcells, and hydrogen firms, including Plug Power, 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 loan is for $1 billion and each must be reviewed by the LPO 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.
Loan Programs Office 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 Loan Programs Office, 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.
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 Inflation Reduction Act, 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, 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 CEO, told Reuters.
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-backed Lithium Americas 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. “They both have expressed the importance of Thacker Pass in securing a domestic supply of critical minerals.”
Recycling startups Li-Cycle 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 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.”