AP

GM conditionally OKs $650M Nevada lithium mine investment

Jan 31, 2023, 3:19 PM | Updated: Feb 1, 2023, 5:26 pm

FILE - Dozens of tribe members and other protesters beating drums and waving signs rally in front o...

FILE - Dozens of tribe members and other protesters beating drums and waving signs rally in front of the federal courthouse in Reno, Nev. Thursday, Jan. 5, 2023, as a court hearing began over a lawsuit seeking to block a huge lithium mine planned near the Nevada-Oregon line about 200 miles north of Reno. General Motors Co. has conditionally agreed to invest $650 million in Lithium Americas Corp. in a deal that will give GM exclusive access to the first phase of a mine planned near the Nevada-Oregon line with the largest known source of lithium in the U.S. (AP Photo/Scott Sonner, File)

(AP Photo/Scott Sonner, File)

RENO, Nev. (AP) — General Motors Co. has conditionally agreed to invest $650 million in Lithium Americas Corp. in a deal that will give GM exclusive access to the first phase of a mine planned near the Nevada-Oregon line with the largest known source of lithium in the U.S.

The equity investment the companies announced jointly on Tuesday is contingent on the Thacker Pass project clearing the final environmental and legal challenges it faces in federal court in Reno, where conservationists and tribal leaders are suing to block it.

Lawyers for the mining company and the U.S. government told a judge during a Jan. 5 hearing the project is critical to meeting the growing demand for lithium to make electric vehicle batteries — a key part of President Joe Biden’s push to expedite a transition from fossil fuels to renewable energy and help reduce greenhouse gas emissions.

GM said Tuesday’s announcement marks the largest-ever investment by an automaker to produce battery raw materials.

Lithium Americas estimates the lithium extracted and processed from the project atop an ancient volcano about 200 miles (321 kilometers) northeast of Reno can support production of up to 1 million electric vehicles annually. It’s the third largest known lithium deposit in the world, the company said.

“The agreement with GM is a major milestone in moving Thacker Pass toward production,” Lithium Americas President and CEO Jonathan Evans said in the joint statement Tuesday.

“We are pleased to have GM as our largest investor and we look forward to working together to accelerate the energy transition while spurring job creation and economic growth in America,” he said.

GM also reported Tuesday that rising factory output led to strong U.S. sales at the end of last year, pushing its fourth-quarter net income up 16% over the same period a year ago.

“GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we’re developing with Lithium Americas,” said GM Chair and CEO Mary Barra.

The joint announcement said GM’s investment will be split into two portions. The first will be held in escrow “until certain conditions are met, including the outcome of the Record of Decision ruling currently pending in U.S. District Court.”

“If those conditions are met, the funds will be released and GM will become a shareholder in Lithium Americas,” the joint statement said.

The escrow release is expected to occur no later than the end of 2023 and lithium production is projected to begin in the second half of 2026, it said.

The second portion of the investment is contingent on, among other things, Lithium Americas “securing capital to fund the development expenditures to support Thacker Pass,” the statement said.

Conservationists say the mine will destroy dwindling habitat for sage grouse, Lahontan cutthroat trout, pronghorn antelope and golden eagles, pollute the air and create a plume of toxic water beneath the open-pit mine deeper than the length of a football field.

Tribal leaders say it will destroy nearby sacred lands where dozens of their ancestors were massacred by the U.S. Cavalry in 1865.

U.S. District Judge Miranda Du said after a three-hour hearing in Reno on Jan. 5 that she hoped to make a decision “in the next couple months” on how to proceed in the nearly two-year-old legal battle over the Bureau of Land Management’s approval of the mine.

Lawyers for the company and the bureau insisted the project complies with U.S. laws and regulations. But they said that if Du determines it does not, she should stop short of vacating the agency’s approval and allow initial work at the site to begin as further reviews are initiated.

Opponents said that should not occur because any environmental damage would be irreversible.

U.S. Sen. Joe Manchin, D-W.Va., hailed GM’s announcement, which he said would boost his efforts to develop U.S.-made batteries for EVs and other uses. China currently controls about 80% of the world’s anode production and 75% of the world’s lithium-ion battery cells, Manchin said.

“I’m old enough to remember … 1974 when I was standing in line waiting to buy gas if it was my turn to buy gas to go to work,´´ Manchin said Tuesday in a speech on the U.S. Senate floor. “I don’t intend to stand in line to wait for China to send a battery to make my car work. I just won’t do it. So this is why we are moving in the direction we are.´´

“The United States is the superpower of the world and to remain that status, you have to have energy independence and be secured of your own energy sources,´´ Manchin said.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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GM conditionally OKs $650M Nevada lithium mine investment