Lithium | Lithium Americas Secures $2.26 Billion U.S. DOE Loan for Nevada Lithium Salt Plant Construction

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Lithium | Lithium Americas Secures $2.26 Billion U.S. DOE Loan for Nevada Lithium Salt Plant Construction

Date：2024-10-30

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Keyword tags： Lithium North America

Lithium Americas Corp. (TSX: LAC; NYSE: LAC) announced on October 28 the closing of a $2.26 billion loan provided by the U.S. Department of Energy's ("DOE") Loan Programs Office ("LPO") under the Advanced Technology Vehicles Manufacturing ("ATVM") loan program. This loan will fund the construction of the company's Thacker Pass lithium processing plant project in Humboldt County, Nevada. The loan term is 24 years, with interest rates based on the U.S. Treasury rate at the time of each loan draw.

The Thacker Pass lithium project will be constructed in two phases, with a combined annual capacity of 80,000 tons. The first phase aims for an initial annual capacity of 40,000 tons of battery-grade lithium carbonate, sufficient to support the production of up to 800,000 electric vehicles. Preliminary construction began in early 2023, and the main construction site preparation work is complete, with production expected to start in 2027. The Thacker Pass Phase I project is expected to create approximately 1,800 direct jobs during the three-year construction period and will create about 360 full-time jobs during its 40-year mine life in operation. Due to increased engineering costs, an agreement to use union labor, and the company's decision to build housing facilities for workers and their families in the remote area, the cost of the mine has increased from a previous estimate of $2.27 billion to nearly $2.93 billion.

This DOE loan complements the investment agreement announced by the company on October 16, 2024, with General Motors, where both parties will establish a joint venture to finance, develop, construct, and operate the Thacker Pass project. According to the terms of the investment agreement, General Motors will acquire a 38% asset-level ownership stake in the Thacker Pass project for a total of $625 million in cash and letters of credit, including $195 million in letter of credit financing that can be used as collateral to support reserve account requirements under the DOE Loan.

In early September, due to a sluggish lithium market, General Motors originally planned to postpone a second $330 million investment in Lithium Americas. However, things have taken a turn for the better, as Lithium Americas has not only successfully secured additional investment from General Motors but also obtained the loan from the U.S. Department of Energy. This will help increase domestic lithium production in the United States. "This essential loan helps us reduce dependence on foreign suppliers and secure America's energy future," said Jonathan Evans, President and CEO of Lithium Americas.

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