General Motors Co has agreed to invest $650 million in Lithium Americas Corp in a deal that will give GM exclusive access to the first phase of a planned mine near the Nevada-Oregon line with the largest lithium resource in the US.
The joint venture’s equity investment announced Tuesday hinges on the Thacker Pass project resolving the latest environmental and legal challenges it faces in federal court in Reno, where conservationists and tribal leaders are suing to block it.
Lawyers for the mining company and the US government told a judge during a January 5 hearing that the project is critical to meeting the growing demand for lithium to make electric vehicle batteries – a key part of President Joe Biden’s push to accelerate the transition away from fossil fuels. for renewable energy and help reduce greenhouse gas emissions.
GM said Tuesday’s announcement was the largest investment by an automaker to produce battery raw materials.
Lithium Americas estimates the lithium extracted and processed from the project atop an ancient volcano about 200 miles (321 kilometers) northeast of Reno could support the production of up to 1 million electric vehicles a year. It is the third largest lithium deposit in the world, the company said.
“The agreement with GM is a major milestone in moving Thacker Pass into production,” Lithium Americas President and CEO Jonathan Evans said in a joint statement Tuesday.
“We are pleased to have GM as our largest investor and we hope to work together to accelerate the energy transition while spurring job creation and economic growth in America,” he said.
GM also reported Tuesday that rising factory production led to strong U.S. sales late last year, pushing fourth-quarter net income up 16% over the same period a year ago.
“GM has secured all the battery material we need to build more than 1 million EVs per year in North America by 2025 and future production will be increased from domestic resources like the site in Nevada that is being developed with Lithium Americas,” said GM Chairman . and CEO Mary Barra.
The joint announcement said GM’s investment would be split into two parts. The first will be held in escrow “until certain conditions are met, including the outcome of the Record of Decision decision currently pending in the US District Court.”
“If these conditions are met, the funds will be released and GM will become a shareholder in Lithium Americas,” the joint statement said.
The escrow release is expected to happen at the latest by the end of 2023 and lithium production is expected to start in the second half of 2026, he said.
The second part of the investment is contingent on, among other things, Lithium Americas “securing capital to finance development expenditures to support Thacker Pass,” the statement said.
Conservationists say the mine will destroy dwindling habitat for sage grouse, Lahontan cutthroat trout, pronghorn antelope and golden eagles, pollute the air and create toxic water beneath open-pit mines deeper than the length of a football field.
Tribal leaders say they will destroy sacred land where dozens of their ancestors were massacred by the US Cavalry in 1865.
U.S. District Judge Miranda Du said after a three-hour hearing in Reno on Jan. 5 that she expects to make a decision “in the next few months” on how to proceed in the nearly two-year legal battle over Bureau of Land Management approvals for the mine.
Lawyers for the company and the bureau insist that the project complies with U.S. laws and regulations. But they said that if Du determines it is not, he should stop short of vacating the agency’s agreement and allow the initial work on the site to begin as further review begins.
Opponents say that should not happen because the environmental damage is irreversible.
US Sen. Joe Manchin, DW.Va., hailed GM’s announcement, which he said will boost efforts to develop US-made batteries for EVs and other uses. China now controls about 80% of the world’s anode production and 75% of the world’s lithium-ion battery cells, Manchin said.
“I’m old enough to remember … 1974 when I was standing in line waiting to buy gas when it was my turn to buy gas to go to work,” Manchin said Tuesday in a speech on the floor of the US Senate. “I don’t want to stand in line waiting for China to send batteries to make my car. I just won’t do it. So this is why we are moving in our direction.”
“The United States is the world’s superpower and to maintain that status, you must have energy independence and secure your own energy sources,” Manchin said.
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