The US Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment to Lithium Americas Corp’s subsidiary, Lithium Nevada Corp., for a $2.26 billion loan to help finance the construction of a lithium carbonate processing plant at Thacker Pass in Humboldt County, Nevada. (Earlier post.)

The project is located next to a mine site that contains the largest-proven lithium reserves in North America. Once fully operational, the facility is expected to produce approximately 40,000 metric tonnes per year of battery-grade lithium carbonate for use in lithium-ion batteries.

The project is supported in part by a $650-million equity investment into Lithium Americas from General Motors, which is expected to be a long-term primary lithium carbonate buyer for the project. Lithium carbonate from Thacker Pass could support the production of batteries for up to 800,000 electric vehicles (EVs) annually, avoiding the consumption of 317 million gallons of gasoline per year.

The project’s output will qualify for the Inflation Reduction Act’s Made in America benefits and sourcing requirements, making it an attractive source of lithium carbonate for domestic automakers.

The project proponent has also been working with the Fort McDermitt Paiute and Shoshone Tribe to ensure that the project is benefiting Tribal members and local communities. Lithium Americas and the Tribe entered into a binding Community Benefits Agreement in 2022 that provides for infrastructure improvements at Fort McDermitt, additional job training and employment opportunities for Tribal members, and support for cultural education and preservation.

LPO issuance of the loan is contingent on LPO’s review of the project under the National Environmental Policy Act (NEPA). The project is located on public land managed by the Bureau of Land Management (BLM), which has already prepared a Final Environmental Impact Statement (EIS) and issued a Record of Decision for the project. If LPO decides to proceed with the financing, it will support the construction and start-up of the lithium carbonate processing facilities and associated infrastructure, which fall under the previous BLM Final EIS. LPO adopted the BLM EIS on 29 September 2023. LPO will continue to work on the NEPA process and other regulatory requirements prior to financial close.

If finalized, the loan would be offered through the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which provides loans to support US manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy. With nine recent conditional commitments and two closed loans announced for ATVM projects since 2022, LPO is helping to support, onshore, or re-shore supply chains projects.

For all projects, DOE performs due diligence related to all aspects of a potential deal, including a borrower or sponsor’s potential nexus with foreign governments.