Lithium Americas receives multi-billion US loan commitment

Lithium Americas (TSX:LAC) has received a conditional commitment from the US Department of Energy for a US$2.26 billion loan under the Advanced Technology Vehicles Manufacturing Loan Program.

The loan is for financing the construction of the company’s processing facilities at Thacker Pass, located in Humboldt County, Nevada.

Goldman Sachs is serving as financial advisor, and Vinson & Elkins is serving as legal counsel to Lithium Americas.

Thacker Pass is currently the largest known measured and indicated lithium resource in North America. Lithium Americas is targeting total production capacity of 80,000tpa of battery-quality lithium carbonate to be developed in two phases of 40,000tpa, respectively.

The project is expected to create some 1,800 direct jobs during its 3-year construction period and approximately 360 jobs in operations for its 40-year mine life.

Based on the terms of the conditional commitment, the $2.26 billion loan will have interest rates fixed from the date of each monthly advance for the term of the loan at applicable US Treasury rates.

Lithium Americas commissioned the University of Nevada in Reno to complete an economic impact assessment, which estimated that every direct job created by Lithium Americas’ construction investment will generate an additional 1.5 local jobs during construction.

Lithium Americas says Thacker Pass supports the US government’s commitment to securing a domestic supply chain for critical minerals to reduce reliance on foreign materials.

Phase one production could support lithium needs for up to 800,000 electric vehicles (EVs) annually, the company says.

Lithium Americas President and Chief Executive Officer Jonathan Evans says the US has an incredible opportunity to lead the next chapter of global electrification in a way that both strengthens its battery supply chains and ensures economic benefits are directed toward American workers, companies and communities.

“The ATVM Loan Conditional Commitment announced today by the DOE is a significant milestone for Thacker Pass, which will help meet the growing domestic need for lithium chemicals and strengthen our nation’s security.”

We are pleased to have completed the rigorous DOE due diligence process. The loan plus GM’s strategic investment will provide the vast majority of the capital necessary to fund phase one.”

In January 2023, General Motors agreed to invest $650 million in Lithium Americas across two tranches for the development of Thacker Pass, representing the largest investment publicly disclosed to date by an automaker in a company to produce battery raw materials. GM has exclusive offtake to 100% of the lithium production from Phase 1 for up to 15 years and has a right of first offer on phase two production.

Phase one production is anticipated to commence in 2027. Material sourced from Thacker Pass will support EV eligibility for consumer incentives under the US clean energy tax credits program.

Lithium Americas is focused on advancing detailed engineering, procurement and execution planning for the construction of Thacker Pass. Initial construction commenced in early 2023 and major construction is expected to begin in the second half of 2024, following the anticipated closing of the loan.

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Images: Lithium Americas
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Written By Adam Orlando Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.