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Researched by Industrial Info Resources (Sugar Land, Texas)--Last week, General Motors Company (NYSE:GM) (GM) (Detroit, Michigan) and Lithium Americas Corporation (NYSE:LAC) (Vancouver, British Columbia) announced that GM was delaying the payment of a second tranche of investment in a Nevada lithium mine until the end of the year. One of the key conditions of the $330 million second tranche has yet to be met and faces some uncertainty as the upcoming U.S. presidential election looms.
In early 2023, GM and Lithium Americas entered an agreement under which GM would be given priority access to the lithium produced from the Thacker Pass mine in Nevada (estimated to be enough for 1 million electric vehicles (EVs) per year) in exchange for investment in the facility, payable in two tranches. The Tranche 1 investment of $320 million was made by GM shortly thereafter, with the balance of an additional $330 million to be paid later in a second tranche. One of the key contingencies upon which GM was to make this second payment was the receipt by Lithium Americas of a $2.26 billion loan from the U.S. Department of Energy (DOE) for the project.
The conditional loan agreement between the DOE and Lithium Americas was made in March this year. At that time, Lithium Americas Chief Executive Officer Jonathan Evans said the company had "completed all the early-works and infrastructure" needed for major building at Thacker Pass and would issue a full notice to proceed with construction "shortly following the closing of the DOE loan." Five and half months later, and the loan still hasn't materialized, and time may be running out.
The timing issue is contingent on the upcoming U.S. presidential election in November, which could bring very different results for the DOE's loan program depending on who is elected. In the wake of Kamala Harris victory, one would expect existing policies to remain largely in place. A Donald Trump victory, however, could bring about radical changes from Biden administration policies. Trump has vowed to eliminate the U.S. EV mandate and dismantle the DOE's Loans Program Office, sending lithium miners into a frenzied attempt to try to obtain loans before a new administration comes into office. The U.S. had originally targeted that about 67% of vehicles sold be electric by 2032, but revised this sharply downward to as little as 35% earlier this year after facing backlash from the industry and autoworkers. A new "technology neutral" regulatory scheme allows automakers more freedom to limit emissions using gasoline-electric hybrids and other emissions-reducing technologies.
Lithium Americas and GM have now postponed the payment of the second tranche for the Thacker Pass mine until December 20, 2024.
The Thacker Pass mine is to be developed in two phases along with an accompanying processing plant. Phase I would involve developing a 9,000-ton-per-day open-pit mine with 6,000 tons per day of sulfuric acid leaching to produce 40,000 tons per year of battery-grade lithium carbonate from 3.3 million tons per year of mined ore feed. After three years of production, Phase II would come online, doubling the mine's production capacity to 80,000 tons of lithium carbonate per year for the remaining 36 years of the mine's expected life. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can learn more by viewing the related project reports on Phase I and Phase II.
GM isn't the only automaker having issues with potential lithium-mining investments. In March 2023, Ford Motor Company (NYSE:F) (Dearborn, Michigan) and Compass Minerals International Incorporated (NYSE:CMP) (Overland Park, Kansas) signed an agreement under which Compass agreed to supply Ford with 40% of the offtake of the lithium Compass planned to extract from Utah's Great Salt Lake.
Compass' plans came under increasing scrutiny in the state, leading in part to the passage of HB513, which requires mineral extraction firms to pay a severance tax to a fund for the exploited lake, minimize water use and resupply water to the lake to offset use, which helped end Compass' plans. The company was aiming to produce 35,000 tons of lithium carbonate per year.
Other automaker-funded lithium projects also face headwinds. In August 2023, Stellantis NV (NYSE:STLA) (Hoofddorp, Netherlands) upped its investment in Controlled Thermal Resources Holdings Incorporated's (CTR) (Imperial, California) Hell's Kitchen lithium project in Imperial Valley, California, in exchange for 65,000 metric tons per year of battery-grade lithium hydroxide monohydrate beginning in 2027. The facility would be accompanied by a geothermal power plant, keeping outside energy use to a minimum.
Although construction of Phase I of the plant kicked off earlier this year, a few of months later two advocacy groups filed a lawsuit, claiming the environmental review of the project was inadequate and violates the California Environmental Quality Act. The lawsuit says the review downplays how much water the project will use and that the demand will far exceed the Imperial Irrigation District's allotment for industrial use. The lawsuit is important as other lithium developers are eyeing the Salton Sea area of the Imperial Valley where the project is situated.
Should CTR's construction proceed as planned, Phase I is expected to be completed in 2025, producing an initial 25,000 tons per year of lithium hydroxide. Existing plans suggest that the fourth and final stage would wrap up around 2031, leading to 300,000 tons per year of production. Subscribers can learn more by viewing the related project reports.
Subscribers to Industrial Info's GMI Database can click here to view reports for the initial stages of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
In early 2023, GM and Lithium Americas entered an agreement under which GM would be given priority access to the lithium produced from the Thacker Pass mine in Nevada (estimated to be enough for 1 million electric vehicles (EVs) per year) in exchange for investment in the facility, payable in two tranches. The Tranche 1 investment of $320 million was made by GM shortly thereafter, with the balance of an additional $330 million to be paid later in a second tranche. One of the key contingencies upon which GM was to make this second payment was the receipt by Lithium Americas of a $2.26 billion loan from the U.S. Department of Energy (DOE) for the project.
The conditional loan agreement between the DOE and Lithium Americas was made in March this year. At that time, Lithium Americas Chief Executive Officer Jonathan Evans said the company had "completed all the early-works and infrastructure" needed for major building at Thacker Pass and would issue a full notice to proceed with construction "shortly following the closing of the DOE loan." Five and half months later, and the loan still hasn't materialized, and time may be running out.
The timing issue is contingent on the upcoming U.S. presidential election in November, which could bring very different results for the DOE's loan program depending on who is elected. In the wake of Kamala Harris victory, one would expect existing policies to remain largely in place. A Donald Trump victory, however, could bring about radical changes from Biden administration policies. Trump has vowed to eliminate the U.S. EV mandate and dismantle the DOE's Loans Program Office, sending lithium miners into a frenzied attempt to try to obtain loans before a new administration comes into office. The U.S. had originally targeted that about 67% of vehicles sold be electric by 2032, but revised this sharply downward to as little as 35% earlier this year after facing backlash from the industry and autoworkers. A new "technology neutral" regulatory scheme allows automakers more freedom to limit emissions using gasoline-electric hybrids and other emissions-reducing technologies.
Lithium Americas and GM have now postponed the payment of the second tranche for the Thacker Pass mine until December 20, 2024.
The Thacker Pass mine is to be developed in two phases along with an accompanying processing plant. Phase I would involve developing a 9,000-ton-per-day open-pit mine with 6,000 tons per day of sulfuric acid leaching to produce 40,000 tons per year of battery-grade lithium carbonate from 3.3 million tons per year of mined ore feed. After three years of production, Phase II would come online, doubling the mine's production capacity to 80,000 tons of lithium carbonate per year for the remaining 36 years of the mine's expected life. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can learn more by viewing the related project reports on Phase I and Phase II.
GM isn't the only automaker having issues with potential lithium-mining investments. In March 2023, Ford Motor Company (NYSE:F) (Dearborn, Michigan) and Compass Minerals International Incorporated (NYSE:CMP) (Overland Park, Kansas) signed an agreement under which Compass agreed to supply Ford with 40% of the offtake of the lithium Compass planned to extract from Utah's Great Salt Lake.
Compass' plans came under increasing scrutiny in the state, leading in part to the passage of HB513, which requires mineral extraction firms to pay a severance tax to a fund for the exploited lake, minimize water use and resupply water to the lake to offset use, which helped end Compass' plans. The company was aiming to produce 35,000 tons of lithium carbonate per year.
Other automaker-funded lithium projects also face headwinds. In August 2023, Stellantis NV (NYSE:STLA) (Hoofddorp, Netherlands) upped its investment in Controlled Thermal Resources Holdings Incorporated's (CTR) (Imperial, California) Hell's Kitchen lithium project in Imperial Valley, California, in exchange for 65,000 metric tons per year of battery-grade lithium hydroxide monohydrate beginning in 2027. The facility would be accompanied by a geothermal power plant, keeping outside energy use to a minimum.
Although construction of Phase I of the plant kicked off earlier this year, a few of months later two advocacy groups filed a lawsuit, claiming the environmental review of the project was inadequate and violates the California Environmental Quality Act. The lawsuit says the review downplays how much water the project will use and that the demand will far exceed the Imperial Irrigation District's allotment for industrial use. The lawsuit is important as other lithium developers are eyeing the Salton Sea area of the Imperial Valley where the project is situated.
Should CTR's construction proceed as planned, Phase I is expected to be completed in 2025, producing an initial 25,000 tons per year of lithium hydroxide. Existing plans suggest that the fourth and final stage would wrap up around 2031, leading to 300,000 tons per year of production. Subscribers can learn more by viewing the related project reports.
Subscribers to Industrial Info's GMI Database can click here to view reports for the initial stages of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).
