The U.S. Department of Energy on Friday announced a conditional loan of $700 million to an Australian mining company to pursue a proposed lithium project in Nevada, as the U.S. seeks domestic supplies for a key component in electric vehicle batteries.

Ioneer Ltd. has hoped to begin mining by 2026 in Esmerelda County. The company projects the site could produce enough lithium to support production of about 400,000 electric vehicles annually for decades; the government's announcement Friday pegged that figure at 370,000 vehicles annually.

The loan would be the latest project to demonstrate the Biden administration's commitment to strengthen the nation's battery supply chain, electrify the transportation sector and cut reliance on fossil fuels and foreign supplies of raw materials, the Department of Energy said.

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The proposed Ioneer project has run up against an endangered Nevada wildflower, Tiehm's buckwheat, that the Fish and Wildlife Service has said is on the brink of extinction. Conservationists have sued in the past to protect the 6-inch-tall plant with yellow blooms.

The Energy Department announcement said the Ioneer project is working to minimize impact on the plant. It said the loan is contingent on completion of an environmental impact statement.

Lithium is fundamental to the battery technology that is most common in electric vehicles and battery electric storage systems. But many engineers are working on alternative battery chemistries because lithium involves rock mining, which means major disturbance to the environment.

Ioneer is a lithium focused company based in New South Wales, Australia and Reno.