ioneer ‘confident’ in finding Rhyolite Ridge investor, at higher valuation: FT

The proposed Rhyolite Ridge lithium mine in Nevada remains on track to secure near-term investment despite Sibanye-Stillwater’s (JSE: SSW)(NYSE: SBSW) decision to walk away earlier this year, project owner ioneer Ltd. (ASX: INR) told the Financial Times.

In February, Sibanye pulled out of a $490 million investment for a 50% stake in the project, citing it did not meet the company’s “investment hurdle rates at prudent pricing assumptions”. The South African miner has recorded two consecutive years of losses, amid a slump in platinum and palladium prices that curtailed its core mining business.

Sibanye initially agreed to invest in Rhyolite Ridge in September 2021, recognizing the project’s potential as the largest lithium mine in the US. At the time, it was one of the largest investments ever announced in the US lithium market amid a battery metals boom. Since then, the lithium market has gone on a rollercoaster ride, with the metal’s price falling sharply after peaking in late 2022.

Despite a still-sluggish lithium market, ioneer is confident of finding a new investor to replace Sibanye.

Managing director Bernard Rowe told FT he is “very confident that in the near term we’ll have that equity in place”, adding that the company wants to sell 40% of the project to one or two investors. The proposed mine, located roughly 362 km north of Las Vegas, hosts one of the largest lithium resources in America, and one of only two projects currently in the advanced stage.

A 2020 Rhyolite Ridge definitive feasibility study modelled a mine life of 26 years, with annual production of 22,000 tonnes of lithium carbonate. The production is expected to power approximately 370,000 electric vehicles per year. Initial capital cost of the lithium mine is estimated at $785 million.

Federico Gay, a lithium analyst at Benchmark, told FT that the Rhyolite Ridge mine would be expensive to build, but would be competitive compared with other lithium mines once operational.

Higher valuation

In the FT report, ioneer said it is “looking for a higher valuation” than the $1.3 billion net present value estimate from 2020, as the project is now fully permitted and the deposit is larger than forecast.

A February 2025 resource update showed a 45% increase to 510 million tonnes, containing nearly 4 million tonnes of lithium carbonate equivalent. Over 80% of the resource is in the higher-confidence measured and indicated categories.

The Australian miner also reiterated the backing from the US government, which in January approved a loan of nearly $1 billion to fund the construction of a processing facility alongside the mine. The loan, however, is contingent on the company securing an equity partner for the Rhyolite Ridge project.