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Automaker GM makes $650m investment to build Thacker Pass lithium mine

31st January 2023

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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Automotive giant General Motors (GM) has made a $650-million investment in Lithium Americas, the developer for the Thacker Pass mining project in Nevada.

This investment – said to be the biggest-ever by an automaker to produce battery raw materials – would support the development of the biggest-known lithium resource in the US.

Thacker Pass will supply enough lithium for up to one-million electric vehicles (EVs) a year.

The Joe Biden Administration aims for all new passenger vehicle sales in the US to be EVs by 2030. The $430-billion Inflation Reduction Act (IRA) passed in August last year, offers $7 500 consumer tax credits to North American-made EVs.

“This investment is evidence of the thrust the IRA has provided to the US EV value chain. We expect Thacker Pass to represent almost 20% of North Americas processed production in 2032, giving GM a massive share of potential US lithium production," said Fastmarkets NewGen Jordan Roberts.

He said that the investment was part of a broader trend over the last couple of years, catalysed by a shortage in battery raw materials and also large price swings.

"Investing upstream is a way to secure units, whilst also potentially hedging against any future price volatility.

"It shouldn’t be surprising if we see more investment from OEMs [original equipment manufacturers] in securing battery raw materials as traditional financing pathways for miners have been dwindling due to a multitude of factors, including the industry’s perceived ESG footprint," said Roberts.

The GM investment will be made in two tranches, the first of which entails $320-million for shares representing 9.999% of Lithium Americas before separation. The second tranche of $330-million will be invested in the company’s US business, following the separation of that from its Argentina business.

After the first tranche of investment, GM will receive exclusive access to Phase 1 production through a binding supply agreement and right of first offer on Phase 2 production.

The Thacker Pass construction plan is targeting 80 000 t/y of battery-quality lithium carbonate production capacity in two phases of 40 000 t/y, respectively.

Phase 1 production would start in the second half of 2026, Lithium Americas confirmed.

The 40-year life-of-mine contemplated at Thacker Pass uses less than 25% of the current measured and indicated mineral resource estimate of 16.1-million tonnes lithium carbonate equivalent (LCE) at an average grade of 2 070 parts per million (ppm) lithium.

The deposit has proven and probable mineral reserves of 3.7-million tonnes LCE at an average grade of 3 160 ppm.

The company also provided a cost estimate of $2.27-billion for Phase 1 and $1.73-billion for Phase 2.

The project has a net present value, using an 8% discount, of $5.7-billion and a 21.4% internal rate of return.

Edited by Creamer Media Reporter

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