The company’s proposed lithium mine in Nevada is in danger after a desert flower growing there is set to be listed as endangered.
The post Ioneer (ASX:INR) share price plummets 17% on new lithium mine hurdle appeared first on The Motley Fool Australia. –
The Ioneer Ltd (ASX: INR) share price is in freefall today. At the time of writing, shares in the lithium miner are trading at 31.5 cents each – down 17.1%.
The company’s precarious position comes after the US Fish and Wildlife Service (FWS) said it would declare the Tiehm’s Buckwheat that inhabits the site of its proposed Nevada lithium mine as an endangered species.
Let’s take a closer look at today’s news and why it might be worrying investors.
Ioneer share price tanks
In a blow to the Ioneer share price, the FWS says the proposed Rhyolite Ridge lithium mine would have a “permanent and irreversible” effect on the desert flower.
In the last northern summer, 40% of Tiehm’s Buckwheat, which are only found in Nevada, had been destroyed. Conservationists blamed Ioneer and its mine, but Ioneer blamed local wildlife. The FSA found it was mostly local squirrel populations, but that the mine did and would have an exacerbating impact on the plant.
In a statement to the ASX this morning, Ioneer said it has done “significant work” to transport the plant to other parts of the state. FWS, however, says this plan would likely fail because Tiehm’s Buckwheat does best in the soil that is found on top of the proposed lithium site.
While a final designation is not due until September and will not block the mine automatically, investors seem to think it could be a significant hindrance – judging by this morning’s performance of the Ioneer share price.
In a statement to the ASX this morning, Ioneer managing director Bernard Rowe said the company supports and expected today’s decision by the FWS.
Mr Rowe also says Ioneer can assist in preserving Tiehm’s Buckwheat from the threats of drought and small mammals in the area. He added that the company believes the Rhyolite Ridge mine and the Tiehm’s Buckwheat can coexist.
As the price of lithium is up 91.4% since the beginning of the year, it is unsurprising the company is keen to see this mine proceed as planned, despite today’s news. However, the reaction of the Ioneer share price today suggests investors may be less optimistic about its prospects.
Ioneer share price snapshot
Over the past 12 months, the Ioneer share price has increased by around 163%. Its value has been steadily appreciating as investors flock to lithium shares. Year to date, the company’s shares are up by around 13%.
Given its current valuation, Ioneer has a market capitalisation of $597 million.