Energy Department offers $2.3 billion loan to boost lithium production
The Energy Department is moving forward with an agreement to make a $2.3 billion loan to Lithium Americas Corp. in an effort to support domestic supplies of a mineral essential for electric vehicle production.
If completed, the loan would help finance construction from a lithium carbonate processing plant in Thacker Pass, Nevada. The plant would be located next to a mine site that contains the largest known lithium deposit in North America.
Demand for lithium, used in the rechargeable batteries that power electric vehicles, has soared as more consumers shift away from gas-powered cars and automakers ramp up production of cleaner vehicles. However, the United States has lagged behind other countries in production of the metal. Nearly 95 percent of the world’s lithium comes from just four countries: Australia, Chile, China and Argentina. Only 1 percent of the lithium used in the United States is harvested domestically. the Energy Department said.
Lithium carbonate from Thacker Pass could support battery production for up to 800,000 electric vehicles per year, according to the Energy Department. Administration officials also expect the project would create approximately 1,800 jobs and 360 operations jobs during construction.
Energy Department officials said the project would help strengthening the domestic supply chain for critical minerals, which they say are critical to “achieving our ambitious clean energy and climate goals and reducing our dependence on economic competitors like China.”
The country’s ability to achieve the Biden administration’s goal of net-zero emissions by 2050 will require broader adoption of electric vehicles, which can produce fewer or no emissions. The government wants half of new car sales to consist of electric vehicles by 2030.
Jonathan Evans, the president and CEO of Lithium Americas, said a statement that the conditional loan commitment was an “important milestone for Thacker Pass, which will help meet growing domestic needs for lithium chemicals and strengthen our nation’s security.”
The project is also backed by General Motors, which agreed in January 2023 to invest $650 million in the company to help develop the Thacker Pass mine. The company beat out 50 bidders, including battery and component manufacturers, for the stake. Many Western auto sector executives have recently bypassed traditional suppliers and committed billions of dollars to deals with lithium mining companies to secure their supply of the metal.
The federal loan, along with General Motors’ investment, is expected to provide the vast majority of capital needed to finance the first phase of the project, Lithium Americas officials said.
The mining project has previously come under scrutiny from Native American tribesmen, ranchers and ranchers environmental movements due to the potential impacts on groundwater and local wildlife habitat. Company construction began early last year after a federal court ruled in her favor and refused to revoke the decision to approve the project.
Lithium Americas officials said they are “heavily involved” with the nearby Fort McDermitt Paiute and the Shoshone Tribe. In 2022, the company entered into a binding agreement with the tribe to provide infrastructure improvements at Fort McDermitt, additional job training and employment for tribal members.
“The Thacker Pass will provide important economic and employment opportunities for members of our tribe,” Larina Bell, acting chairwoman of the Fort McDermitt Paiute and Shoshone Tribe, said in a statement.
The conditional agreement was issued by the Energy Department’s Loan Programs Bureau, which increased its lending authority tenfold from $40 billion to more than $400 billion under the Inflation Reduction Act of 2022. Since its creation, the agency has made more than $42 billion in loans and loan guarantees .
Although the department plans to finance the project, the company must first meet certain “technical, legal, environmental and financial conditions” before the deal is finalized, according to the department.