A critical minerals company with an agreement to supply Tesla Inc. with battery-ready graphite has been awarded a conditional loan of up to $107 million from the Biden administration to help finance a U.S. plant expansion.
A U.S. unit of Syrah Resources Ltd. will use the money to expand its facility in Vidalia, Louisiana, to produce enough natural graphite-based active anode material for approximately 2.5 million electric vehicles by 2040, the Energy Department said Monday in a blog post. The loan comes as the Biden administration seeks to create a domestic supply chain for electric-vehicle batteries.
Melbourne-based Syrah has a four-year offtake agreement with Tesla to sell the majority of the graphite anode material produced from the Vidalia plant, with the option to buy more subject to the expansion. The facility plans to process graphite from Mozambique to become the first U.S.-based source of graphite anodes for the country’s fast-growing EV and lithium-ion battery manufacturing industry.
Graphite is a crucial component for lithium-ion batteries, but the U.S. is 100% reliant on imported graphite since China produces nearly all the high-purity mineral needed to make the batteries, the Energy Department said in the blog.
If finalized, this would represent the first loan from the agency’s Advanced Technology Vehicles Manufacturing Loan Program in more than decade. The Biden administration is reviving the agency’s broader loan program that withered under former President Donald Trump. Trump had proposed killing the initiative, but later used it to provide critical support to Southern Co.’s Vogtle nuclear plant in Georgia.
The loans program office, which has more than $40 billion of loan authority, previously provided $465 million to Tesla, helped finance the country’s early large-scale solar photovoltaic projects and gave a $535 million loan guarantee to Solyndra LLC, a California company that flopped in 2011.
The program offered a $1.04 billion conditional loan guarantee in December to Monolith Inc., a project to convert natural gas into hydrogen, marking the first conditional loan guarantee of its kind under President Joe Biden.© 2022 Bloomberg L.P.