GM to Invest $650 Million in Lithium Americas for North America’s Largest Lithium Mine
- February 1, 2023
- Posted by: Quatro Strategies
- Category: Mining
General Motors will invest $650 million in Lithium Americas Corp to help the company develop its Thacker Pass lithium mine in Nevada, which is estimated to hold enough battery metal to power 1 million electric vehicles (EVs) per year. The deal marks the latest in a series of efforts by automakers to secure supplies of key metals in the EV supply chain. The agreement gives Lithium Americas a major partner as it tries to develop North America’s largest lithium mine, which has been facing a long court battle.
Democratic Senator Manchin said GM’s investment in Lithium Americas was “exciting” and a “tangible result” of the Inflation Reduction Act (IRA).
Lithium Americas’ Thacker Pass project includes extracting lithium from a large clay deposit, which has never been done before at a commercial scale. The investment marks the second in as many years by GM into a new lithium extraction technology. The automaker had signed a supply deal in 2021 with Controlled Thermal Resources, which is trying to filter lithium from geothermal brines in California.
With this deal, GM will overtake China’s Ganfeng Lithium as the biggest shareholder in Lithium Americas. GM has also agreed to buy all the lithium from Thacker Pass when it opens in 2026, roughly 40,000 tons per year.
The companies had been discussing the deal for nearly a year. It comes as U.S. lithium companies ioneer Ltd and Piedmont Lithium signed supply deals with Ford and Tesla respectively.
“We wanted the right and holistic parter, rather than a bunch of offtake agreements,” Lithium Americas chief executive Evans said.
Under the agreement, GM will buy $650 million of shares in Lithium Americas in two equal parts, with the first one coming only if Lithium Americas prevails in a court case regarding the development of Thacker Pass mine. A U.S. court is expected to rule in the next couple of months whether Trump erred when he approved the mine just before leaving office in 2021. Evans said the chances of the company losing the case and its permits are “extremely low.”
The second share purchase would come after Lithium Americas completes the long-planned separation of its North and South American operations.
Lithium Americas raised its budget for the first phase of the Thacker Pass project to $2.27 billion, up from $1.06 billion, reflecting changes to its production plans.
The company plans to build several processing facilities at the site, including a plant to produce 3,000 tonnes per day of sulfuric acid, used to extract lithium from the clay.
Lithium Americas has applied for a loan from the U.S. Department of Energy, which Evans expects to fund a “major component” of the remaining project cost.
Lithium Americas has the support of one Native American tribe, but several other tribes and environmental groups worry it would harm wildlife and water supplies. “If I were GM, I would be asking some hard questions about how the company can remedy the issues at Thacker Pass,” said John Hadder of Great Basin Resource Watch, a plaintiff in the court case.
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