$25 Billion Loan Support from Biden Administration
LPO Abolition Policy Included in 'Project 2025'
US mining companies and battery recycling firms are scrambling to secure government-backed loans amid concerns over former President Donald Trump's potential re-election. They fear that government funding could be halted if Trump returns to the White House.
According to major foreign media on the 29th (local time), mining companies are rushing to obtain government loans worth billions of dollars before January next year.
The Biden administration has decided to support loans totaling $25 billion (approximately 33.345 trillion KRW) to 21 companies, including Recycle, Ionier, Lithium Americas, and Redwood Materials, through the Department of Energy's Loan Programs Office (LPO). These companies plan to use the government loans to build battery recycling or lithium and other mineral processing facilities. However, due to complex administrative procedures, most companies have yet to receive final loan approval.
Even companies that have already received loans are not at ease. Solar companies like Hanwha Q CELLS and hydrogen-related firms such as Plug Power have received conditional loans, but foreign media explained that their investment plans rely on the US domestic supply chain for critical minerals, so if funding for the mining industry falls through, they will inevitably be affected. Plug Power is currently finalizing a $1.666 billion (approximately 2.2221 trillion KRW) loan and is constructing multiple hydrogen power plants in the US. Andy Marsh, CEO of Plug Power, stated, "I am confident that the succeeding administration will continue to support projects that have received conditional approval."
If a second Trump administration takes office, a sharp shift in energy policy is expected. Former President Trump has announced plans to abolish electric vehicle expansion support measures such as tax credits. The policy proposal book "Project 2025," which includes individuals who served in the Trump administration, reportedly contains a plan to abolish the LPO. Sources say that while Trump cannot unilaterally halt the LPO loan program, he could delay the loan process enough to cause applying companies to give up.
In fact, during Trump's term, the only LPO loan was for a nuclear project in Georgia. Even that was an application made during former President Barack Obama's administration. The approval for critical mineral project loan applications was only granted a month before Trump left office.
Accordingly, the mining industry and others are rushing to finalize loans before President Biden leaves office. However, foreign media, based on interviews with about 20 industry insiders, analyzed that some companies will not receive loans before Biden's departure. Three sources said most loan applications will be pushed to the next president's term.
According to sources, without government financial support, major mineral projects are likely to be canceled at the planning stage. If this happens, Chinese companies could supply minerals at low prices, expanding their market share globally, and the Western electric vehicle supply chain could be paralyzed, foreign media explained.
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