Lithium carbonate from Thacker Pass, the largest known lithium source in the US, will be used in GM’s proprietary Ultium battery cell.
“Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs,” GM Chief Executive Mary Barra in a separate statement.
“The agreement with GM is a major milestone in moving Thacker Pass toward production, while setting a foundation for the separation of our U.S. and Argentine businesses,” Lithium Americas President and CEO Jonathan Evans noted.
The investment will be split into two tranches. Funds for the first tranche will be held in escrow until certain conditions are met, including the outcome of the Record of Decision ruling currently pending in the US District Court.
The announcement comes on the heels of a US judge comments indicating she would rule “in the next couple of months” on whether former President Donald Trump erred in 2021 when he approved the lithium project.
The Vancouver-based miner, which has received all necessary permits to begin construction, had expected a ruling by last September.
The mine has the capacity to produce lithium for up to 1 million electric vehicles (EV) a year and is expected to create 1,000 jobs during construction and 500 permanent positions.
Lithium Americas is planning the open-pit project’s production capacity to reach 60,000 tonnes a year of battery-grade lithium carbonate over a 46-year mine life, according to a 2018 pre-feasibility study.
Measured and indicated resources at Thacker Pass total 385 million tonnes averaging 2,917 parts per million (ppm) lithium for 6 million tonnes of lithium carbonate equivalent (LCE). Inferred resources are 147 million tonnes averaging 2,932 ppm for 2.3 million tonnes of LCE.
While the world needs more and more lithium, investment in new supply has not kept pace with rising demand, which is expected to hit over 1 million tonnes of lithium carbonate equivalent by 2025.
GM shares were up about 5.4% at $38.24 in premarket trading. Along with the investment, GM also reported better-than-expected fourth-quarter earnings and gave financial guidance for 2023 that topped analysts’ estimates.