US Mining Companies Rush to Secure Loans Over Fears of Trump's Potential Return and Block Funding

By Thea Felicity

Aug 29 2024, 10:30 AM EDT

Aerial view of the Eramine lithium extraction plant at Salar Centenario Ratones in Salta province, Argentina, taken on July 4, 2024. French mining group Eramet and China's Tsingshan inaugurated a lithium production plant in Argentina on July 3 to supply the booming electric car industry. The site in the northwestern province of Salta represents an investment of $870 million dollars, Eramet said. LUIS ROBAYO/AFP via Getty Images

With the election of 2024 looming, Reuters reported that US miners and battery recyclers scramble to clinch billions of dollars in government loans before January over fears that a re-elected Donald Trump might block critical funding.

The loans are important for increasing mineral production domestically, particularly that of the key transition minerals like lithium and nickel, considering they're for electric vehicles.

During the Biden Admin, the Department of Energy's Loan Programs Office (LPO) has committed nearly $25 billion in conditional loans to companies mining for critical minerals, recycling batteries, and developing clean energy.

Now, those are still subject to final approval and may not be inked before Biden is out of office. That spurred a rush to complete agreements before a potential administration change, according to several sources in the industry.

Potential Funding Cut Under Trump Presidency

"We're eager to get our loan finalized before a new president takes office because any delay could jeopardize the entire project," said a mining executive awaiting a loan to Reuters.

The urgency is rooted in comments by Trump that he would end the electric vehicle mandate and Project 2025's plan to shut down LPO. While Trump cannot unilaterally shut down the program, he could dramatically slow down the loan approval process, making it impossible for companies to get funding. However, many industry leaders fear those delays will stall crucial minerals projects key to building out a domestic supply chain for electric vehicles and decreasing dependency on foreign sources.

Companies like Lithium Americas, ioneer, and Plug Power are racing against time to close their loans. Without the necessary funding, delayed domestic projects could potentially cripple the US energy transition efforts.