Only partly correct because there are multiple layers of...

Only partly correct because there are multiple layers of approval.

The US government has approved the $3b bucket of money that the US Department of Energy (DoE) is allocating. This is the DoE's Battery Materials Processing Grant Program and is part of the Bipartisan Infrastructure Law bill.


The US DoE has taken this $3b of funding and selected various projects on which to do award negotiations. There was the first round announced on 19 October 2023 that allocated US$2.8b indicating a modest $0.2b was being held back either for a project that wasn't ready to be announced or as a contingency (The $2.8b figure comes from the title of a reuters article).

On 19 September 2024 the DoE announced a second round of approvals. The Reuters coverage of the 2nd round of approvals noted the first round as 14 recipient and $1.82b indicating that ~$1b of the grants didn't eventuate. PLL and SYR would have been two within that group as they relinquished the grant and sought larger values from the loans program. The number of projects intended to be funded from the $3b is now 25.

From Reuters:


So the approval for the $3b of funding exists. The approvals by DoE to break the $3b into 25 separate smaller awards exists. What hasn't been approved is the final T&C's in relation to E25 receiving US$166.1m. My guess is that the DoE will stage-gate the payments and there will be time-based conditions that need to be met. From the PLL and SYR timelines, DoE are likely to require a DFS within 6 months. Don't complete the DFS by then - no funding.

DoE are likely to require a FID on the project within 12-18 months of agreeing the grant T&C's. They are interested in project delivering in a timely manner, not in projects that might occur sometime in the future. The $1b drop in awarded values is likely to be projects that get the rest of the T&C's completed (permits, rest of funding, shareholder approvals to start etc).

Its unclear if DoE are going to fund in advance of expenditure or undertake an expenditure and claim back process. One of the possibilities is an arrangement whereby E25 spends either $50m (or $100m) and then claims back $25m (or $50m) against the Grant. This would ensure the US government only ever paid up to 50% of expenditure incurred which appears to be one of the grants conditions.

I'd be surprised if there were any T&C's that were sufficiently onerous that E25 would say, nope I don't accept those terms, you can keep your grant however the market is certainly looking for confirmation of what E25 needs to deliver and by when so as to receive these monies.