American Battery Technology Co (NASDAQ: ABAT) slid by over 36 per cent during Thursday’s session after losing a major United States government grant.
The battery materials company said in an SEC filing Wednesday that the Department of Energy has terminated US$57.7 million in funding that was going to be used for a lithium hydroxide production facility. It was originally awarded in late 2022. The agency’s decision is part of a broader push to cutback on clean energy subsidies under the Trump Administration.
This month alone, the department announced the termination of over US$7.5 billion in funding for 223 clean energy projects. The DOE justified its actions by saying that the initiatives did not advance U.S. energy needs, were economically unviable and that the ROI from investing taxpayer dollars would not suffice.
Despite the major setback, American Battery Tech plans to pursue construction of this Nevada complex with more than US$52 million pooled from investors throughout this year. Additionally, the company still holds US$52 million in reimbursable funding from the DOE. However, the shortage of capital could potentially delay construction timelines.
This week’s decline on the Nasdaq follows a lengthy rally with gains exceeding 450 per cent in the past year.
American Battery Technology specializes in battery recycling, battery metal production and lithium extraction. The company recovers lithium, cobalt, nickel and manganese from spent lithium-ion batteries and focuses on eco-friendly methods for extracting lithium from clay deposits.
American Battery Tech has developed unique recycling and extraction processes it claims are more advantageous than those of others in the sector. They are yet to be proven on a commercial scale though.
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American Battery Tech drops pre-feasibility study
Its Tonopah Flats lithium operation is one of the largest development-stage lithium projects in the United States. American Battery Technology Co just released a pre-feasibility study for this operation.
It highlighted an internal rate of return of 21.8 per cent with a 7.5 year payback period.
The site is expected to produce 30,000 tonnes of lithium hydroxide monohydrate per annum for the next 45 years, according to the company. It is estimated to have a net present value of US$2.57 billion with an 8 per cent discount rate.
The project will serve as the upstream resource extraction component of the company’s Nevada operations while the lithium hydroxide facility in discussion acts as a downstream processing hub.
Read more: Lithium Americas soars as DOE takes 5% stake in the company
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