Published: October 17, 2024 | Share This

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Lithium Americas and General Motors Holdings (GM) have entered into a new investment agreement to establish a joint venture for the purpose of funding, developing, constructing, and operating Thacker Pass in Humboldt County, Nevada.

The JV transaction will deliver $625 million of cash and letters of credit from GM to Thacker Pass alongside the conditional commitment for a $2.3 billion U.S. Department of Energy 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 Jonathan Evans, president and CEO of Lithium Americas.

“Today’s joint venture announcement is a win-win for GM and Lithium Americas. GM’s JV investment demonstrates their continued support and helps us to unlock the previously announced $2.3 billion DOE Loan. We will be working closely with GM to advance towards the final investment decision, which we are targeting by the end of the year,” added Evans.

“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, SVP, Global Purchasing and Supply Chain.

“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,” added Morrison.

Under the terms of the investment agreement, GM will acquire a 38 percent asset-level ownership stake in Thacker Pass for $625 million in total cash and letters of credit, including $430 million of direct cash funding to the JV to support the construction of phase 1 and a $195 million letter of credit facility that can be used as collateral to support reserve account requirements under the DOE loan. The JV transaction replaces the $330 million tranche 2 common equity investment commitment from GM under its original investment agreement with the company announced in January 2023.

In addition to the JV transaction, GM has agreed to extend its existing offtake agreement for up to 100 percent of production volumes from phase 1 of Thacker Pass to 20 years to support the expected maturity of the DOE loan. Upon closing of the JV, GM will also enter into an additional 20-year offtake agreement for up to 38 percent of phase 2 production volumes and will retain its existing right of first offer on the remaining phase 2 production volumes.

In March 2024, the company received a conditional commitment for a $2.3 billion loan from the U.S. DOE under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. Prior to making the first draw on the DOE loan, expected sometime in the middle of 2025, the company is required to fund approximately $195 million for reserve accounts associated with the DOE loan. The GM LC facility will be used to fund the DOE’s reserve accounts.

THACKER PASS PROJECT UPDATE

The company continues to focus on de-risking project execution by advancing detailed engineering, project planning, and procurement packages.

• Detailed engineering continues to progress in advance of issuing full notice to proceed, currently at approximately 40 percent design complete.

• Site preparation for major earthworks has been completed and the process plant area is currently being excavated (approximately 50 percent complete) to prepare for concrete placement, forecasted to begin by mid-2025.

• Procurement packages for the top seven pieces of long-lead equipment have been awarded. Contracts for key construction materials have been awarded and field purchases of goods and services have commenced.

• Major earth works for the all-inclusive housing facility for construction workers are completed. The current focus is on finalizing engineering and permitting for utilities and preparing to award contracts for the detailed earthworks, foundation installation, and erection of the housing units.

To date, the company has achieved over one million work hours without a lost time injury.

The company continues to work closely with the DOE and expects to close the DOE loan in the coming weeks. The company and GM are targeting making the FID and issuing full notice to proceed for Thacker Pass by the end of the year, following closing of the DOE loan and the JV transaction.

Lithium Americas is committed to responsibly developing the Thacker Pass project located in Humboldt County in northern Nevada. The company is focused on advancing Thacker Pass phase 1 toward production, targeting nameplate capacity of 40,000 tpa of battery-quality lithium carbonate. The company and its engineering, procurement, and construction management contractor, Bechtel, entered into a national construction agreement (project labor agreement) with North America’s Building Trades Unions for construction of Thacker Pass. The three-year construction build is expected to create approximately 1,800 direct jobs.

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