Redwood Materials says it wins $2 bln DOE loan for EV materials plant

Ioneer

09/02/2023 17:00

* 
      Battery materials firm gets conditional commitment for
loan
    

        * 
      Money will help fund Nevada recycling/remanufacturing
plant
    

        * 
      Part of investment "frenzy" spurred by Inflation Reduction
Act
    

  
    By Paul Lienert and David Shepardson
       Feb 9 (Reuters) - Redwood Materials said on Thursday it
has received a conditional commitment for a $2 billion loan from
the U.S. Energy Department to help build out a $3.5-billion
recycling and re-manufacturing complex in Nevada for electric
vehicle battery materials.
    Redwood Materials expects to draw down the first loan
tranche later this year, Chief Executive JB Straubel said in an
interview.
    The initial loan draw “will help accelerate (production) and
compress the time for us to get to full scale” at the northern
Nevada complex, which has started to produce copper foil for
battery anodes, Straubel said.
    Straubel said there has been "a frenzy of activity" among
electric vehicle and battery manufacturers since President Joe
Biden passed the Inflation Reduction Act (IRA) in August. The
IRA rules are designed to shift the U.S. battery supply chain
away from China, which currently produces 70% of batteries for
electric vehicles.
    Last July, the Energy Department said it would loan $2.5
billion to Ultium Cells, a joint venture between General Motors
Co  GM.N  and LG Energy Solution  373220.KS , to help finance
construction of new battery cell manufacturing facilities in
Ohio, Tennessee and Michigan.
   Last month, the department said it planned to loan Ioneer Ltd
 INR.AX  up to $700 million to build its Rhyolite Ridge lithium
mining project in Nevada.
    The loans are coming from the Advanced Technology Vehicles
Manufacturing (ATVM) loan program. More than 10 years ago, the
ATVM program provided low-cost government loans to Tesla
 TSLA.O , Ford Motor  F.N  and Nissan Motor  7201.T , which
included some cell manufacturing.
    EXPANSION PLANS
    Redwood Materials, founded in 2017 by ex-Tesla executive
Straubel, is on a path to become one of the world’s largest
recyclers and re-manufacturers of battery materials, including
copper, lithium, cobalt and nickel.
    In addition to the Nevada site near Reno, Redwood Materials
in December said it planned to construct a similar facility
northwest of Charleston, South Carolina, also at a cost of
around $3.5 billion.
    Each facility will have an initial planned capacity to
process 100 gigawatt-hours of electrode materials, enough to
supply more than 1 million EVs each. The South Carolina complex
eventually could be expanded to "several hundred
gigawatt-hours," Straubel said.
    Straubel said the South Carolina project is running about
two years behind the Nevada facility.
    Redwood Materials said it will supply copper foil from
Nevada to Panasonic  6752.T  for battery cells produced at the
Nevada Gigafactory that Panasonic jointly operates with Tesla.
It will also supply cathode material to Panasonic’s new Kansas
battery plant, which is slated to open in 2025.
    Redwood Materials has supply agreements with a number of
manufacturers, including Ford, Toyota Motor  7203.T  and
Volkswagen Group  VOWG_p.DE .
 (Reporting by Paul Lienert in Detroit and David Shepardson in
Washington; Editing by Sharon Singleton)
 ((Paul.Lienert@thomsonreuters.com; mobile +1 313-670-2452;))