WASHINGTON (AP) — The White House is moving forward with a deal that would grant the U.S. government a small equity stake in Lithium Americas, a key player in the development of one of the world’s largest lithium mines located in northern Nevada.
The Department of Energy has come to terms with Lithium Americas on alterations to a $2.3 billion federal loan, allowing the project to advance in its goal to extract lithium vital for powering electric vehicle batteries. General Motors is also heavily invested in the project, pledging over $900 million to facilitate the development of Thacker Pass, which is estimated to produce enough lithium to construct up to 1 million electric vehicles annually.
The potential equity investment from the U.S. government serves as a strategic move, echoing past interventions under the Trump administration, which has previously taken stakes in companies like Intel and MP Materials.
While the exact size of the stake in Lithium Americas has not been disclosed, it is expected to be under 10% and act primarily as a 'cash buffer' for the company. The Energy Department is currently negotiating restructuring terms with Lithium Americas to include specific conditions related to the federal loan.
“We support the project moving forward,” said a White House official, indicating the significant economic implications of lithium as a critical mineral for U.S. manufacturing. They emphasized the administration's commitment to ensure fairness for taxpayers, stating, “We don’t believe in free money.”
Discussions surrounding the loan are set against the backdrop of growing support from both Democrats and Republicans, recognizing the importance of establishing a domestic supply chain for electric vehicle batteries amidst increasing consumer demand. Initial production estimates for Thacker Pass suggest it could yield 40,000 metric tons of battery-grade lithium carbonate per year, sufficient for powering approximately 800,000 electric vehicles.
However, the project has faced opposition from environmental groups and Indigenous leaders concerned about its impact on sacred lands. Despite this, the administration views the project as crucial in the broader context of climate change and reducing dependence on foreign lithium sources, particularly from China.
As the U.S. sales of electric vehicles wane due to various factors, including the potential phase-out of federal tax incentives for EV purchases, the fate of the Thacker Pass mine could play a pivotal role in reinvigorating the market.
Overall, lithium’s importance extends beyond just electric vehicles; it is also integral to the manufacturing of various electronic devices and is a vital component in energy storage solutions for renewable resources. The advancements at Thacker Pass represent a significant step towards enhancing the U.S. position in the global lithium supply chain.
