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Novonix leads a slump as US politics stymies billions in battery grants

Local firm Novonix has led a widespread fall in battery and lithium stocks on the ASX after it appeared a much-hyped US Government funding package could be killed off from within the Democrats.

Dec 21, 2021, updated Dec 21, 2021
US Senator Joe Manchin could kill off crucial funding

US Senator Joe Manchin could kill off crucial funding

Novonix fell 6 per cent this morning before a recovery. At the close of the market it was down 4 per cent along with AllKem (formerly Orocobre) down 2.5 per cent and later recovered to be down .3 per cent. Sayona managed to trade positively with a 1.7 per cent rise in the morning but ended flat. 

Other stocks to face a sell off were Vulcan which fell 4 per cent. Piedmont was down .6 per cent, Ioneer was down 1.3 per cent Core Lithium rebounded strongly from early losses to be up 5 per cent.

Earlier this month Novonix said it was moving to take advantage of the US Government funding.

Managing director Chris Burns said billions of dollars in grants would start to be issued next year by the US Government as a part of its $US1.2 trillion infrastructure Bill.

“So out of that infrastructure funding, $US6 billion is for battery processing materials and $US3 billion of it is directly for scale-up of manufacturing of these materials and recycling,’’ Burns said.

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“There is a significant amount of capital and they are going to start looking at how to distribute it in May next year and they will be looking for partners that have qualified technology, a path to market, customers and relationships.

“Phillips66 (Novonix’s biggest shareholder) will play a role in positioning us for a role for that type of funding support.’’

However, Democrat senator Joe Manchin is now threatening to vote against the Bill which will kill off its progress into law because the Senate is split 50-50 between the Republicans and Democrats.

His concerns are based on the potential for the package to increase inflation and pressure the Budget.

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