ABAT Shares Plunge After DOE Cancels Lithium Grant

American Battery Technology Company (NASDAQ: ABAT) shares tumbled 21.14% to $6.90 in early Thursday trading after the company disclosed that the U.S. Department of Energy (DOE) has terminated its $57.7 million grant that was earmarked for the construction of a lithium hydroxide facility.

The termination was detailed in a new SEC 8-K filing, following a DOE memorandum in May that ordered audits of all grants issued by the agency’s Manufacturing Energy Supply Chain office.

Details of the Termination

ABAT had originally signed a $115 million funding deal with the DOE in September 2023, under which both parties would contribute $57.7 million each toward the project.

However, after the audit announcement, the DOE terminated the grant on October 9, according to the filing. ABAT said it appealed the decision the following day and plans to pursue dispute resolution remedies to reinstate the grant.

Funding Outlook

The company noted that $52 million of DOE funds remain unused but emphasized that it has already raised over $52 million from public markets this year to continue its project “without impact to timeline or scope.”

In addition, ABAT previously secured a $900 million financing letter of interest from the U.S. Export-Import Bank to support its Nevada lithium mine and refinery.

Market Impact

The loss of federal funding poses a potential short-term headwind for ABAT’s lithium operations, though management insists the project remains fully financed through other sources.