General Motors (GM) Holdings has agreed to form a joint venture (JV) with Lithium Americas for developing the latter’s Thacker Pass lithium project in Humboldt County, Nevada.
Under the agreement, GM will acquire a 38% stake in Thacker Pass for a total of $625m, comprising $430m in cash to support Phase 1 construction and a $195m letter of credit facility.
This facility will act as collateral for reserve account requirements linked to a $2.3bn loan from the US Department of Energy (DOE) announced earlier this year.
The JV transaction supersedes the second tranche of a $330m equity investment commitment from GM, initially announced in January 2023.
This new arrangement builds upon GM's previous $320m investment in February 2023, which saw the company acquire around 15 million Lithium Americas common shares.
Besides, GM has extended its existing offtake agreement to 20 years, ensuring up to 100% of production from Phase 1 of Thacker Pass, aligning with the expected maturity of the DOE loan.
Lithium Americas will contribute $387m for a 62% ownership in the project and will manage the project on behalf of both parties.
Upon the JV's closure, GM will also enter a 20-year offtake agreement for up to 38% of Phase 2 production volumes.
It will maintain a right of first offer on the remaining Phase 2 volumes.
A board of directors will be established to oversee the JV, approve budgets and business plans, and implement policies that meet GM's vendor requirements, including its Human Rights Policy.
The investment by GM is contingent upon meeting certain conditions precedent, including those related to the DOE loan agreement.
Lithium Americas president and CEO Jonathan Evans said: “Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass.
“Today’s joint venture announcement is a win-win for GM and Lithium Americas. GM’s JV investment demonstrates their continued support and helps us to unlock the previously announced $2.3bn DOE loan.
“We will be working closely with GM to advance towards the final investment decision, which we are targeting by the end of the year.”
In April this year, Lithium Americas announced a $275m public offering for the Thacker Pass lithium project.
