The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - October 16, 2024
The Cadillac Lyriq is part of a growing line of GM EVs that will benefit from a domestic source of lithium.
Multiple steps are required to upgrade Thacker Pass ore (left) to battery-grade lithium carbonate (right).
To help ensure that it has a reliable and Inflation Reduction Act-compliant source of the lithium needed for its growing line of electric vehicles, General Motors has agreed to invest an additional $625 million to acquire a 38% joint venture interest in Lithium Americas Corp.'s Thacker Pass mine and processing plant in northern Nevada.
"We're pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain," said Jeff Morrison, senior vice president of global purchasing and supply chain at General Motors. "Sourcing critical EV raw materials, like lithium, from suppliers in the U.S., is expected to help us manage battery cell costs, deliver value to our customers and investors, and create jobs."
GM's interest in Thacker Pass is not new – the American automaker already owned a 7% interest in Lithium Americas through a $320 million stock purchase early in 2023 and has been expected to make a larger investment to help fund the development of a mine and processing plant at Thacker Pass.
At the time of its initial investment in Lithium Americas, GM entered into an offtake agreement to acquire all of the approximately 40,000 metric tons of lithium carbonate expected to be produced annually during the first 20 years of phase-one operations at Thacker Pass. This is enough lithium for the batteries in roughly 800,000 electric vehicles per year.
Multiple steps are required to upgrade Thacker Pass ore (left) to battery-grade lithium carbonate (right).
The lithium mined and refined at the northern Nevada operation will help ensure that future EVs qualify for up to $7,500 tax credits offered to American buyers under the Inflation Reduction Act.
To qualify for this federal tax credit, at least 40% of the materials in the battery of the EV being purchased must be produced in the U.S. or a free trade agreement country. This domestic materials requirement climbs by 80% in 2027.
GM originally planned to make a second investment of $330 million to acquire additional Lithium Americas stock. This added investment, coupled with a conditional commitment for a $2.3 billion loan under the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program, was expected to provide Lithium Americas with the capital needed to get Thacker Pass into production.
Instead of buying additional equity in Lithium Americas, GM has now decided to make an even larger investment that will buy it a direct JV interest in Thacker Pass. This includes $430 million in cash to help fund the initial phase of construction and a $195 million letter of credit, which covers a reserve account requirement of the DOE loan.
"Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass," said Lithium Americas President and CEO Jonathan Evans. "GM's JV investment demonstrates their continued support and helps us to unlock the previously announced $2.3 billion DOE loan."
With the GM investment in place and the conditionally approved DOE loan anticipated to close by the end of the year, Lithium Americas expects to complete phase-one production and begin producing battery-grade lithium carbonate at the northern Nevada project by 2027 and reach full commercial capacity by 2028.
"We will be working closely with GM to advance towards the final investment decision, which we are targeting by the end of the year," said Evans.
The company is also planning a phase-two expansion that would double the production capacity at Thacker Pass. Phase-two Thacker Pass development will likely be timed around market demand.
On top of its arrangement to buy all of the phase-one lithium produced at Thacker Pass, GM is entering into a second 20-year offtake agreement for up to 38% of phase-two production from the Nevada operation.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
Reader Comments(0)