Lithium Americas Corp. (TSE: LAC) (NYSE: LAC) closed its joint venture with a subsidiary of General Motors Co (NYSE: GM) to develop, build and operate the Thacker Pass lithium deposit in Humboldt County, Nevada.
Announced on Monday, the deal is for the supply of battery-quality lithium carbonate for the North American critical supply chain. Lithium Americas holds 62 per cent interest in Thacker Pass. GM acquired approximately 38 per cent interest in the pass for a mix of USD$430 million of cash funding to the joint venture to support the first phase of development, and USD$195 million letter of credit facility.
Furthermore, GM contributed USD$330 million in cash to the JV as part of the closing, while Lithium Americas provided USD$138 million. GM will also contribute the remaining USD$100 million, and Lithium Americas will add USD$181 million at the final investment decision (FID) for Phase 1.
GM will issue the LC Facility before the first draw on the company’s USD$2.26 billion loan from the U.S. Department of Energy.
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Thacker Pass offers US relief from lithium demand
The United States faces significant challenges in securing a stable lithium supply, a crucial component in the production of batteries for electric vehicles (EVs) and energy storage systems.
As demand for EVs and renewable energy technologies grows, the U.S. has struggled to meet its domestic lithium needs. Currently, the U.S. imports most of its lithium from countries like Chile, Argentina, and Australia, making it vulnerable to supply chain disruptions, geopolitical tensions, and trade restrictions.
The U.S. is also grappling with the environmental and regulatory hurdles that come with establishing new lithium extraction projects. Local opposition to mining operations, concerns over environmental impact, and lengthy permitting processes have slowed the development of new sources of lithium, despite the nation’s increasing demand for the metal. This has led to growing concerns about the U.S. relying on foreign imports for a key strategic resource.
The Thacker Pass is one of the largest known untapped lithium deposits in the United States. It offers a solution to these challenges by significantly boosting domestic lithium production, which reduces the country’s dependence on foreign suppliers. Thacker Pass holds an estimated 7.9 million metric tons of lithium carbonate equivalent, enough to supply a large portion of the lithium required for EV batteries and renewable energy storage.
Moreover, Thacker Pass could help address environmental concerns by providing a more sustainable source of lithium extraction. The project’s design includes plans for using a direct lithium extraction (DLE) method, which is considered more environmentally friendly than traditional methods. By expanding lithium production at Thacker Pass, the U.S. could secure its position in the growing EV and renewable energy markets while reducing its reliance on international sources of lithium.
