ABAT sinks after the US Department of Energy terminates its grant for lithium facility

American Battery Technology Co. is in a hole early on Thursday, currently trading 20% lower than yesterday’s close price, after the company revealed in an SEC filing that the US Department of Energy has terminated its $57.7 million grant supporting the construction of a lithium hydroxide facility.

The termination follows a May memorandum ordering audits of all grants issued by the DOE’s Manufacturing Energy Supply Chain office.

In September 2023, ABAT signed a $115 million funding deal with the DOE for the lithium plant, under which both sides were to contribute $57.7 million each. After the DOE’s audit announcement in May, the agency terminated the grant on October 9. ABAT says it appealed the decision the next day and that it plans to seek dispute resolution remedies, according to its 8K filing.

As of last week’s grant termination, about $52 million in DOE funds remain unused. The company said it has “already raised over $52 million of funds from the public markets” this year, and intends to keep the project going “without impact to timeline or scope.”

In April, the firm also received a $900 million financing letter of interest from the US Export-Import bank to back its Nevada lithium mine and refinery.