The U.S. Department of Energy has greenlit a substantial $2.26 billion loan for Lithium Americas to pave the way for the construction of the Thacker Pass lithium mine in Nevada. This move marks one of the most significant mining investments made by the Biden administration, aligning with the White House’s strategic goal of lessening reliance on China for lithium, a crucial component in electric vehicle (EV) batteries.
The loan, initially sanctioned back in March, underscores the administration’s commitment to bolstering domestic lithium production. This recent development closely follows the approval of another lithium project by ioneer, signaling a concerted effort to fortify the U.S. supply chain for the essential mineral.
Expected to commence operations later in this decade, the Thacker Pass project is poised to play a pivotal role in enhancing the U.S. lithium supply chain. With the potential to emerge as a key lithium provider for industry giant General Motors (GM), the mine has garnered increased investment from the automotive behemoth, nearing the $1 billion mark. GM’s Senior Vice President of Global Purchasing and Supply Chain, Jeff Morrison, highlighted the significance of sourcing lithium domestically to manage battery costs, drive value, and foster job creation.
As GM pursues its Net Zero pathway, aiming for carbon neutrality across its global products and operations by 2040, the Thacker Pass venture stands as a critical component in advancing the company’s EV production objectives.
Li-FT Power, a company delving into the exploration and development of hard rock lithium deposits in Canada, boasts an impressive portfolio of projects in this sector. With a focus on resource potential, an expedited strategy, and robust infrastructure, Li-FT Power is actively advancing five key projects in Canada, a region known for its safe and conducive mining environment.
The recent approval of the Thacker Pass project holds significant implications for the Biden administration’s clean energy agenda. White House climate advisor Ali Zaidi emphasized the pivotal role of secure mineral supplies in propelling the U.S. towards a cleaner energy future, stressing the importance of mineral security in the global clean energy landscape.
The Thacker Pass mine has navigated a politically intricate path, initially greenlit by former President Donald Trump and subsequently approved for construction following legal battles with conservationists, ranchers, and Indigenous groups. Commencing work in this remote expanse near the Oregon-Nevada border last year, the project has encountered escalating costs, with estimates soaring from $2.27 billion to nearly $2.93 billion due to various factors like engineering expenses, labor agreements, and the establishment of worker housing facilities in the remote locale.
The loan, extending over 24 years with interest rates linked to the U.S. Treasury rate, provides a stable financial foundation to support the project’s protracted construction and operational timelines.
With the loan now finalized, Lithium Americas can forge ahead with large-scale construction efforts, anticipated to span approximately three years. The initial phase of the Thacker Pass project aims to yield 40,000 metric tons of lithium carbonate annually, sufficient for powering up to 800,000 EVs. CEO Jon Evans views this financial backing as instrumental in reducing the nation’s dependence on foreign lithium sources and fortifying domestic energy security.
Amidst a projected surge in global lithium battery demand, with expectations of a more than fivefold increase worldwide and nearly sixfold surge in U.S. demand by 2030, the U.S. remains heavily reliant on imported battery materials and components. Current figures indicate that the U.S. captures less than 30% of the economic value from each battery cell in its market, generating a mere $3 billion in value-added. By 2030, under prevailing trends, this figure could escalate to $16 billion, yet the bulk—around 70%—of economic value would still be sourced from overseas.
China’s dominance in the battery supply chain, controlling over 75% of cell production and a significant portion of material processing and refinement capacities, poses vulnerabilities for U.S. energy security. With anticipated shortages in critical minerals like lithium, nickel, and copper, the U.S. faces risks in maintaining a secure and sustainable energy infrastructure without a comprehensive industrial strategy.
Without a secure lithium battery supply chain, the U.S. risks falling short of its ambitious climate targets, including a 40% reduction in greenhouse gas emissions by 2030 and achieving net zero emissions by 2050. To safeguard its interests and bolster national security, the federal government must prioritize establishing a robust North American lithium battery supply chain that leverages domestic expertise and minimizes dependence on foreign sources.
The DOE’s substantial $2.26 billion investment in the Thacker Pass lithium mine in Nevada represents a significant stride towards bolstering U.S. lithium supply for EV batteries, reducing reliance on foreign sources, and reinforcing national energy security. This move aligns with broader efforts to secure critical mineral supplies crucial for achieving clean energy goals and enhancing global competitiveness.
Furthermore, the recently expanded 45X tax credit stands out as another pivotal measure undertaken by the U.S. government to fortify its critical mineral supply chain. Forming part of the Inflation Reduction Act, the Section 45X Advanced Manufacturing Production Credit aims to stimulate domestic production of essential clean energy components, including renewable elements, battery materials, and 50 key minerals vital for the energy transition. This tax credit offers a 10% reduction on production costs for highly refined metals, bolstering supply chains in critical sectors such as EVs and green energy.
Minerals eligible for this credit encompass lithium, alongside other essential battery metals like nickel and graphite, as well as rare earth elements like neodymium. The $2.26 billion investment in the Thacker Pass project represents a significant stride towards enhancing U.S. lithium supply for EV batteries, diminishing reliance on foreign sources, and fortifying national energy security. Through initiatives like these, the U.S. aims to secure critical mineral supplies essential for realizing its clean energy objectives and maintaining global competitiveness.
