The US Biden administration has issued its first ever approval for a new lithium mine in the US

The U.S. Interior Department granted final approval on Thursday for ioneer’s (INR.AX) Rhyolite Ridge lithium mine in Nevada, marking the first domestic lithium source to receive a permit under President Joe Biden's administration. This mine will play a crucial role in supplying lithium to electric vehicle manufacturers such as Ford (F.N).

Shares of the Australia-based critical minerals company surged over 20% in New York trading following the announcement before stabilizing. The approval concludes a six-year review process during which regulators, ioneer, and conservationists debated over the future of a rare flower found at the mine site, highlighting the conflicting priorities between efforts to combat climate change and the need to protect biodiversity.

The permit, which was anticipated by year-end, arrives as part of a broader push by the Biden administration to boost critical minerals production and counter China's dominance in the market. It also triggers a $700 million loan from the U.S. Department of Energy, along with a $490 million equity investment from Sibanye Stillwater (SSWJ.J) to fund the project.

"This is a science-based decision," said Laura Daniel-Davis, acting deputy secretary of the Interior Department, to Reuters. "We're sending a clear message that addressing climate change is our top priority."

The U.S. Bureau of Land Management, under the Interior Department, issued the Rhyolite Ridge project’s record of decision, effectively permitting the mine. The bureau stated that the project would include measures to protect the local ecosystem while creating hundreds of jobs in the rural area.

Located about 225 miles (362 km) north of Las Vegas, the mine holds enough lithium to power approximately 370,000 electric vehicles annually. Construction is set to begin next year, with production expected by 2028, positioning Rhyolite Ridge as one of the largest lithium producers in the U.S., alongside companies like Albemarle (ALB.N) and Lithium Americas (LAC.TO).

Lithium has been designated as a critical mineral by the U.S. Geological Survey due to its importance to the country's economy and national security. "We're proud to be the first U.S. lithium mine permitted by the Biden administration," ioneer's chairman, James Calaway, told Reuters.

The mine will extract lithium and boron—used in ceramics and soaps—from a clay-like deposit. The lithium will be processed on-site into battery-grade derivatives, and the company plans to recycle half of the water used, exceeding industry standards.

Ford, along with a joint venture between Toyota and Panasonic, has committed to purchasing lithium from the mine.