Washington (Business Emerge), September 6: Piedmont Lithium, a leading U.S. miner of electric vehicle battery metals, has withdrawn its application for a government loan and is reassessing its expansion strategy across two continents. This decision comes in response to a significant decline in lithium prices, which have dropped 83% over the past year. The company’s move to scale back is part of a broader industry retrenchment, triggered by reduced electric vehicle sales and an oversupply of lithium from Chinese producers.
The company had previously applied for a loan through the U.S. Department of Energy’s Loan Programs Office (LPO), aiming to finance its flagship project in North Carolina, which is expected to cost over $1 billion. Piedmont initially canceled a Tennessee lithium project that was awarded a $141.7 million grant, choosing instead to pursue the LPO loan, hoping for greater financial support. However, rising costs associated with the loan application process and the payment required for technical advisors have added financial strain.
Piedmont had informed its shareholders in May of its intent to secure 65% to 75% debt financing for the North Carolina project, similar to loans granted to competitors Lithium Americas and ioneer. However, the LPO’s practice of distributing funds in tranches after expenses have been incurred, coupled with the requirement to pay for external technical expertise, has led Piedmont to reconsider its strategy.
Piedmont, once favored by Wall Street and investors due to its high-profile supply deals with Tesla and LG Chem, now faces increasing challenges as the industry navigates a volatile market. The combination of falling prices and weaker-than-expected electric vehicle sales has caused layoffs in the sector and raised concerns about future investment opportunities.