What happened

Rebounding from the more than 8% slide they suffered through the first half of October, shares of Piedmont Lithium (PLL -4.95%) have been powering higher this week. The source of investors' glee? Piedmont Lithium announced that it has received a grant from the U.S. Department of Energy. 

As of 11:34 a.m. ET, shares of Piedmont Lithium have risen 18.1% since last Friday's trading session, according to data provided by S&P Global Market Intelligence.

So what

On Wednesday, Piedmont Lithium announced that the Department of Energy has awarded the company a $141.7 million grant to advance the development of the Tennessee Lithium project. Addressing the importance of the grant in supporting the domestic production of lithium, Keith Phillips, Piedmont's president and CEO, said: "Over 80% of lithium hydroxide production today occurs in China. This grant will accelerate the development of the Tennessee Lithium project as a world-class lithium hydroxide operation, which is expected to more than double the domestic production of battery-grade lithium hydroxide in the United States."

Piedmont estimates the construction cost of the project to be $600 million. With construction expected to start next year, management projects that production will begin in 2025. When completed, Tennessee Lithium is expected to achieve annual production of 30,000 metric tons of lithium hydroxide.

The project in Tennessee is one of four that the company is currently developing. Management projects that, combined, all four projects will achieve annual production of 60,000 metric tons. 

Now what

While the government's award of $141.7 million is welcome news, it's important for potential investors to remember that plenty of challenges remain for the company to overcome before the project begins to produce lithium. Therefore, those with the stock on their watch lists will want to look for additional signs that the project's development remains on track.