US Miners and battery recyclers are trying to close out loans worth billions before January, worried about the potential of Republican Donald Trump’s re-election.

In the last year, the US Department of Energy’s Loan Programs Office (LPO) has granted nearly $25 billion in conditional loans across 21 mining and recycling companies. The prices of lithium, nickel, and other minerals fell over the past 12 months. Combined with lower than expected sales of electric vehicles (EVs), resulted in the industry turning to the government for support in order to counter the effect of China’s policy of over capacity.

The average loan awarded is worth $1 billion and has been granted to companies across the industry, including solar and hydrogen firms. Although provisionally granted under President Joe Biden, the processing of these loans requires review across government departments before the full funds are dispersed, including Energy Secretary Jennifer Granholm, before the full funds are released. Many are therefore still awaiting final approval.

Trump has pledged to ‘end the electric vehicle mandate’. Combined with policies outlined in the Project 2025 document to ‘shutter’ the LPO, makes many believe that if he succeeds in returning to the White House, Trump won’t honour the loans. During his first term, Trump issued one LPO loan. Under Biden, the office expanded, now employing 400 people compared to the 90 working there under Trump. Trump’s relationship with the LPO is problematic – Reuters says that while he could not close the department because it has congressional funding, Trump could ‘slow-walk’ underwriting to the point where applicants give up and walk away. While efforts to get the funds released and finalized in the next five months continue, the reality is that many will not meet the time frame.

The loss of financial support could result in many critical projects being ground to a halt and damage the Western EV supply chain, further boosting their Beijing rivals who are already flooding the market. Trump has been described as a ‘wild card’ by executives seeking to get their loans finalized before a new President is sworn in in January.

Whether these concerns are justified is yet to be seen. Current polls show Democratic Rival Kamala Harris 4 points ahead of Trump in the election race. Harris is expected to continue most of the climate policies implemented during her time as Vice-President. Even if elected, Trump’s policies remain unclear. He himself has sought to distance himself from the Project 2025 document. US Department of Energy pointed out that Federal programs ‘regularly continue across administration changes’.

(Sources: reuters.com)