Ioneer Ltd (ASX: INR) shares are rocketing out of the gates on Monday morning.

In early trade, the ASX lithium stock was up 29% to 22 cents.

The lithium developer's shares have pulled back a touch since then but remain up by 19% to 20.2 cents at the time of writing.

Why is this ASX lithium stock rocketing?

Investors have been scrambling to buy the company's shares this morning after it announced a huge funding boost in the United States.

According to the release, the company has secured a US$996 million (A$1.6 billion) loan from the U.S. Department of Energy (DOE) Loan Programs Office (LPO) under the Advanced Technology Vehicles Manufacturing (ATVM) program.

These funds will support the development of an on-site processing facility at the Rhyolite Ridge Lithium-Boron Project in Esmeralda County, Nevada.

The release notes that the investment, which is part of the LPO's efforts to strengthen the nation's critical mineral supply chain, will create hundreds of rural jobs, support American manufacturers, and help rebalance the global supply of lithium and boron production and processing currently dominated by China and Turkey, respectively.

Pleasingly for the ASX lithium stock, this is more funds than it was previously expecting. It highlights that the US$996 million loan ($968 million principal and $28 million in capitalised interest) is a US$268 million increase in loan principal from the January 2023 conditional loan commitment.

Conditions precedent to first loan funding include closing Sibanye-Stillwater Joint Venture (JV), securing necessary additional required funding, and a project finance model bring down.

What is the Rhyolite Ridge Project?

Management notes that the Rhyolite Ridge project will be the first new lithium mine in the United States in almost sixty years and the first new boron mine in close to a century.

It will quadruple the nation's current domestic lithium supply, power an estimated 370,000 electric vehicles per year, and create an estimated 500 jobs during construction and 350 high paying jobs during its decades in operation.

The project is expected to generate dual revenue from lithium and boron produced directly at the mine site and contribute to establishing a sustainable lithium loop in Nevada. This will ensure the recycling and reuse of the critical minerals.

Commenting on the news, the ASX lithium stock's executive chair, James Calaway, said:

The need for domestically sourced and processed lithium and boron has never been greater. The United States requires Rhyolite Ridge and more projects like it if we want secure domestic critical mineral production. It's as simple as that. We're thrilled to provide these critical battery components to the American manufacturing supply chain.

This sentiment was echoed by Ioneer's managing director, Bernard Rowe. He said:

Rhyolite Ridge is fully permitted and construction ready. This loan demonstrates the United States' confidence in and importance of our lithium-boron mine project. Rhyolite Ridge will not only create new jobs in Nevada but foster innovation across the country.

Today's announcement is the culmination of a rigorous and yearslong process with our federal, state, local and Tribal partners. Ioneer looks forward to bringing these urgently needed materials to market and is proud to set the new standard for modern mining operations and community engagement.