GM investing $650M in Lithium Americas
Metal Tech News - February 1, 2023
Last updated 4/16/2023 at 6:55am
The largest-ever investment by an automaker into a battery materials mining company.
To strengthen its domestic supply of the materials going into the batteries for its expanding lineup of electric vehicles, General Motors is investing $650 million toward the development of Lithium Americas Corp.'s Thacker Pass lithium mine in northern Nevada.
Considered to be the largest known lithium deposit in the United States, Thacker Pass hosts 16.1 million metric tons of lithium carbonate in measured and indicated resources. Mining just a portion of these resources would provide enough lithium to support the production of approximately 1 million EVs per year for 40 years.
Thacker Pass, which is slated to begin development this year, is on track to begin delivering lithium to the markets in 2026.
This timeline fits well with GM's needs.
"GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we're developing with Lithium Americas," said General Motors Chair and CEO Mary Barra.
In addition to dovetailing into GM's future needs for materials to manufacture the Ultium batteries powering the automaker's growing line of electric cars, trucks, vans, and SUVs, the Nevada locale of this lithium deposit will be a huge advantage for the automaker and Americans that buy its EVs.
The Inflation Reduction Act signed into law by President Biden in 2022 offers American EV buyers a $7,500 tax credit. To qualify for the 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% per year in 2027.
This has automakers focused heavily on securing supplies of lithium battery materials in the U.S., Canada, Australia, and other free trade agreement countries. And likely weighed heavily on GM's decision to make the largest-ever investment by an automaker to produce battery raw materials.
"Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs," said Barra.
GM's hefty investment into Lithium Americas will be made in two tranches, starting with spending $320 million to acquire a 9.99% equity ownership in the lithium mining company.
After bringing GM on board as a major shareholder, Lithium Americas will split Thacker Pass off into a new U.S. business that will carry the Lithium Americas banner. The company's Argentina assets will fly under the banner of Lithium International.
"The agreement with GM is a major milestone in moving Thacker Pass toward production, while setting a foundation for the separation of our U.S. and Argentine businesses," said Lithium Americas President and CEO Jonathan Evans.
Toward the primary objective of advancing Thacker Pass to production, GM will invest another $330 million into the U.S.-focused Lithium Americas.
As part of this deal that will help fund the development of Thacker Pass, GM will acquire all 40,000 metric tons of lithium carbonate to be produced annually at the Nevada mine during the first phase of operations and will be the first in line to acquire any extra lithium when the operation is expanded to 80,000 metric tons per year, which is expected to begin by 2030.
"This relationship underscores our commitment to develop a sustainable domestic lithium supply chain for electric vehicles," said Evans. "We are pleased to have GM as our largest investor, and we look forward to working together to accelerate the energy transition while spurring job creation and economic growth in America."