As soon as a darling of Wall Road and retail traders due to provide agreements with Tesla and LG Chem, Piedmont has canceled its software with the US Division of Vitality’s (DOE) Mortgage Applications Workplace (LPO) due partly to prices related to the method, an organization official informed Reuters. Particulars of the transfer haven’t beforehand been reported.
The transfer – which comes after Piedmont canceled plans for a Tennessee lithium challenge that had obtained a $141.7 million authorities grant – is fueling questions on the place the corporate hopes to safe financing for its flagship North Carolina challenge, projected to price greater than $1 billion.
Forgoing the grant was a big gamble by Piedmont that it may get extra authorities cash by making use of for a mortgage by way of the LPO.
Piedmont in Could informed shareholders it aimed to safe debt financing within the vary of 65% to 75% of the price of its North Carolina challenge, in keeping with conditional loans the LPO has prolonged to Lithium Americas, ioneer and others.
The mortgage evaluate course of requires that candidates pay for technical specialists who invoice at an hourly fee as they advise the LPO. The LPO additionally sometimes extends financing in tranches after bills have been incurred, based on two candidates not linked to Piedmont, placing additional monetary stress on mortgage recipients.
In a press release to Reuters, Piedmont CEO Keith Phillips stated the corporate doesn’t really feel “a way of urgency at this stage” to maneuver ahead on the LPO software given market circumstances and adjustments to its North Carolina plans. He added that the corporate will “preserve self-discipline and handle money, which invariably signifies that our timelines for improvement will likely be delayed.”
“We’d anticipate to submit a recent software at a degree sooner or later and we might stay up for working with (the DOE) when that point comes,” Phillips stated.
Piedmont, which reported $59 million in money on the finish of June, laid off practically a 3rd of its workforce earlier this yr. Since final October, the corporate has spent $1.9 million on DOE mortgage application-related prices and inventory and transaction-related bills, though it declined to interrupt every merchandise out individually.
The LPO stated it was unable to remark resulting from confidentiality necessities round applicant data.
Reuters reported final week that LPO candidates have been dashing to shut loans forward of the Nov. 5 US presidential election.
‘Lack of belief’
Piedmont was based in 2016 in Australia and moved its headquarters in 2021 to North Carolina, the place it hopes to dig a 500-foot-deep (150-meter-deep) open-pit mine and construct one of many largest US lithium refineries.
Amid a surge in lithium costs, the corporate in 2021 invested in Ghana and Quebec. In 2022, Piedmont stated it will construct a second lithium refinery in Tennessee, plans that garnered the federal government grant and reward from President Joe Biden.
Piedmont final month canceled its Tennessee challenge – which had obtained all needed permits – and stated it will now plan to construct two refineries in North Carolina, the place the corporate obtained a state mining allow in April however should nonetheless receive a zoning variance from the Gaston County Board of Commissioners.
Piedmont has not utilized for the variance and commissioners is not going to think about any change till 2025 on the earliest, a delay from earlier expectations for the method to begin two months in the past.
Phillips, the CEO, informed traders final month he doesn’t know when the North Carolina website may open.
“Our board’s points with Piedmont have by no means been concerning the EV transition, however about our lack of belief within the firm and its challenge,” stated Chad Brown, chair of the county board of commissioners. Phillips and Brown plan to satisfy on Sept. 11, their first face-to-face assembly since 2021.
Piedmont must amend its state mining allow if it makes vital adjustments to its operational plans, state officers informed Reuters.
In Quebec, Piedmont is a minority investor in Sayona Mining’s North American Lithium challenge. The challenge is Piedmont’s solely supply of money, a reliance that partly led Macquarie analysts final month to downgrade the corporate’s inventory.
Piedmont can be the second-largest shareholder in Atlantic Lithium, which is growing a mine in Ghana that wants approval from the nation’s parliament. Piedmont has been promoting its Atlantic shares to spice up money reserves, knowledge from monetary agency LSEG confirmed.
Piedmont can be looking for a buyer to purchase its portion of the challenge’s lithium, which had been slated to produce the Tennessee refinery, Phillips informed shareholders final month. Funds from that offtake can be used to pay for Piedmont’s portion of the Ghana challenge’s price.
“The trade wants stronger pricing for giant tasks to be constructed. Full cease,” stated Phillips.
(By Ernest Scheyder; Enhancing by Veronica Brown and Marguerita Choy)