Having the government\u2019s help with anything involving mining has been difficult if not impossible for, well, much of recent memory. In fact, there have arguably been more attempts to squash the industry than to help it.<\/p>\n\n\n\n
From the files of \u201cnews we did not think we\u2019d hear today\u201d comes a recent announcement that the U.S. Department of Energy will be lending $2.26 billion for the advancement of the Thacker Pass Lithium project in Humboldt County, Nevada, owned by Lithium Americas.<\/p>\n\n\n\n
In a construction update released March 14, the company confirmed receipt of a \u201cconditional commitment\u201d from the DOE for the loan under the Advanced Technology Vehicles Manufacturing Loan Program. It represents one of Washington’s largest investments to date in the mining industry, noted a recent Reuters report, spurred in at least some part by the administration\u2019s aim to push domestic production of critical minerals for the energy transition.<\/p>\n\n\n\n
As a future key supplier to General Motors, the mine is targeting 40,000 metric tons of lithium carbonate annually. For now, current focuses are on advanced detailed engineering, procurement and execution planning for Phase 1 of the project, which is about 30% complete. A full notice to proceed is expected in the second half of 2024.<\/p>\n\n\n\n
\u201cIn advancing Thacker Pass to production, we have an incredible opportunity to lead the next chapter of global electrification in a way that both strengthens our national security of critical materials and ensures that the economic benefits are directed toward American workers, companies and communities,\u201d Lithium Americas President and CEO Jonathan Evans said.<\/p>\n\n\n\n
It’s worth noting there is a method to the madness, so to speak, behind this administration\u2019s move to put their money where their mouth usually isn\u2019t \u2013 the mining front. GM will have exclusive access to 100% of the lithium production from Phase 1 for up to 15 years and has a right of first offer on Phase 2 production.<\/p>\n\n\n\n
In addition, GM has financially invested in the progress of the Nevada property. In February 2023, Tranche 1 for $320 million of the total GM investment closed and closing of Tranche 2, for about $330 million, is expected before or at closing of the DOE loan.<\/p>\n\n\n\n
Together, the expected DOE loan plus GM\u2019s investment are expected to provide the vast majority of the capital necessary to fund the construction of Phase 1.Mechanical completion of Thacker Pass Phase 1 is targeted for 2027, with full-capacity production at the mine in sometime in 2028.<\/p>\n\n\n\n
Regardless of what\u2019s being mined, and while the industry knows the thought process behind it, it is still a positive turn to see such a large investment in keeping critical mineral production investments and actual production within our borders Whether or not it will open the door for further involvement, of course, remains to be seen.<\/p>\n\n\n\n