Piedmont announcement....Piedmont Lithium pulls US government...

Piedmont announcement....

Piedmont Lithium pulls US government loan application as prices slump

Sept 5 (Reuters) - Piedmont Lithium(PLL.O), opens new tab has pulled its application for a debt package from a popular U.S. government loan program and is scaling back ambitious expansion plans across two continents, as tumbling prices of the electric vehicle battery metal force the U.S. miner to conserve cash.

The retrenchment is among the starkest yet by a lithium company due to an 83% drop in prices in the past year fueled in part by Chinese overproduction and tepid EV sales rates that have caused industry layoffs and spooked investors.Once a darling of Wall Street and retail investors because of supply agreements with Tesla (TSLA.O), opens new tab and LG Chem (051910.KS), opens new tab, Piedmont has canceled its application with the U.S. Department of Energy's (DOE) Loan Programs Office (LPO) due in part to costs associated with the process, a company official told Reuters. Details of the move have not previously been reported.

The move - which comes after Piedmont canceled plans for a Tennessee lithium project that had received a $141.7 million government grant - is fueling questions about where the company hopes to secure financing for its flagship North Carolina project, projected to cost more than $1 billion.

Forgoing the grant was a gamble by Piedmont that it could get more government money by applying for a loan through the LPO.

Piedmont in May told shareholders it aimed to secure debt financing in the range of 65% to 75% of the cost of its North Carolina project, in line with conditional loans the LPO has extended to Lithium Americas (LAC.TO), opens new tab, ioneer (INR.AX), opens new tab and others.

The loan review process requires that applicants pay for technical experts who bill at an hourly rate as they advise the LPO. The LPO also typically extends financing in tranches after expenses have been incurred, according to two applicants not connected to Piedmont, putting further financial stress on loan recipients.In a statement to Reuters, Piedmont CEO Keith Phillips said the company does not feel "a sense of urgency at this stage" to move forward on the LPO application given market conditions and changes to its North Carolina plans. He added that the company will "maintain discipline and manage cash, which invariably means that our timelines for development will" be delayed.

"We would expect to submit a fresh application at a point in the future and we would look forward to working with (the DOE) when that time comes," Phillips said.Piedmont, which reported $59 million in cash at the end of June, laid off nearly a third of its workforce earlier this year. Since last October, the company has spent $1.9 million on DOE loan application-related costs and stock and transaction-related expenses, although it declined to break each item out individually.

The LPO said it was unable to comment due to confidentiality requirements around applicant information.