Ioneer’s Rhyolite Ridge lithium-boron project moves closer to final permitting

Ioneer’s (NASDAQ: IONR; ASX: INR) Rhyolite Ridge lithium-boron project in Nevada is a step closer to shovel-ready after the United States Bureau of Land Management (BLM) on April 15 issued the project’s draft Environmental Impact Statement (EIS).

This draft, seen as a milestone in the Biden administration’s push to fast-track domestic lithium production, is open for 45 days of comments. In-person and online meetings are scheduled to gather public feedback.

“The release of the draft EIS represents six years of hard work to help build America’s critical minerals supply chain and reaffirms the viability of our investment in Nevada,” Ioneer’s executive chairman James Calaway said in a release.

Lithium exploration and development in Nevada and across the U.S. have expanded rapidly due to strong market demand and government policies like the Inflation Reduction Act, despite a drop in metal prices since last summer. This growth is also fuelled by new extraction technologies and a focus on domestic processing to establish a fully integrated North American lithium-ion battery supply chain.

The lithium space currently struggles with low prices, which are almost three times lower than last summer. In June, lithium carbonate traded at 311,363 yuan (US$43,022) per tonne, as compared to 111,500 yuan (US$15,406) on April 18, according to Trading Economics.

Sydney-based Ioneer expects to receive the final EIS and a record of decision (ROD) by October. Following a positive ROD, Ioneer anticipates making a final investment decision on the US$750 million project by December, with production slated to start by 2027. The timeline has been delayed compared with the previous production forecast start of 2026.

However, it would first need to close funding agreements with the U.S. Department of Energy.

The DOE in January said it would lend Ioneer up to US$700 million to develop the mine, while South Africa’s Sibanye Stillwater (JSE: SSW; NYSE: SBSW) invested US$490 million in Ioneer in September 2021 to secure 50% of Rhyolite Ridge.

About 60 km by road southwest of Tonopah, Rhyolite Ridge is among North America’s few lithium-boron deposits. Ioneer has repeatedly revised its mining proposal to mitigate environmental impacts, particularly focusing on preserving the endangered Tiehm’s Buckwheat plant. The company has invested US$2.5 million in conservation efforts and commits an additional US$1 million yearly to protect that species and its habitat.

Ioneer released an updated resource estimate for Rhyolite Ridge in April last year, lifting the resource 168%. The project’s South Basin deposit holds 360.2 million tonnes at 1,750 parts per million (ppm) lithium and 6,850 ppm boron for about 3.4 million tonnes of lithium carbonate equivalent and 14 million tonnes of boric acid equivalent. The update includes 60 million tonnes of proven and probable reserves at 1,800 ppm lithium and 15,400 ppm boron, as outlined in a 2020 feasibility study.

Despite gaining about 53% to A23¢ per share on the news in Sydney on April 14, the stock is down 32% over the last 12 months, having touched 10.5¢ and A40¢. It has a market capitalization of A$432.8 million ($382.7 million).