Lithium Americas has signed an investment agreement with General Motors (GM) involving a total commitment of $625m to form a joint venture (JV) aimed at funding, developing, and operating the Thacker Pass lithium project in the US.
According to the terms of the agreement, GM will acquire a 38% stake in Thacker Pass project.
The consideration involves $430m in direct cash funding to support the construction of the American lithium project’s phase 1 and a $195m letter of credit facility to meet reserve account requirements linked to a previously announced $2.3bn loan from the US Department of Energy (DOE).
Of the amount, $330m will be contributed upon closing the JV, followed by $100m at the final investment decision (FID) for phase 1, and the $195m letter of credit facility prior to the first draw on the DOE loan.
The new transaction replaces an earlier commitment of $330m common equity investment from GM, announced in January 2023.
Located in Humboldt County, Nevada, the Thacker Pass project is progressing in engineering and construction, with about 40% of the detailed design complete.
Major earthworks have been carried out, and preparations for the process plant area are underway.
Both Lithium Americas and GM are targeting a timely final investment decision and issuing full notice to proceed with the Thacker Pass project by the end of the year. This will be done after closing the DOE loan and JV transaction.
Lithium Americas president and CEO Jonathan Evans said: “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.”
According to Lithium Americas, the partnership marks the largest investment by a US original equipment manufacturer (OEM) in a lithium carbonate project.
In addition to the JV agreement, GM has agreed to extend the offtake agreement for phase 1 of Thacker Pass lithium production to 20 years. This agreement ensures that GM will have access to up to 100% of the production volumes from this phase.
Following the closing of the JV, GM will also secure an additional 20-year offtake agreement for up to 38% of production from phase 2 of the lithium project.
Lithium Americas will retain a 62% interest in the Thacker Pass project and will manage the project on behalf of the JV.
In line with the agreement, Lithium Americas will also contribute $387m for its stake, with $211m to be provided upon closing of the JV and the remainder upon reaching the FID for Phase 1.
The agreement with GM is subject to certain conditions, including those related to the DOE loan agreement.
