Energy Department Offers $2.3 Billion Loan to Boost Lithium Production

WASHINGTON – The Energy Department is moving forward on a deal to provide a $2.3 billion loan to Lithium Americas Corp. in an effort to shore up domestic supplies of a mineral vital for the production of electric vehicles.

If finalized, the loan would help finance the construction of a lithium carbonate processing plant at Thacker Pass in Nevada. The plant would be next to a mine site that contains the largest known lithium deposit in North America.

Demand for lithium, which is used in the rechargeable batteries that power EVs, has surged as more consumers shift away from gas-burning cars and automakers ramp up production of cleaner vehicles. The United States, however, has lagged other countries in producing the metal. Nearly 95% of the world’s lithium comes from just four countries: Australia, Chile, China and Argentina. Only 1% of the lithium used in the United States is harvested domestically.

Lithium carbonate from Thacker Pass could support the production of batteries for up to 800,000 EVs a year, according to the Energy Department. Administration officials also expect the project would create roughly 1,800 jobs during construction and 360 operational jobs.

Energy Department officials said the project would help strengthen the domestic supply chain for critical minerals, which they said was key for “reaching our ambitious clean energy and climate goals and reducing our reliance on economic competitors like China.”

The country’s ability to meet the Biden administration’s goal of net zero emissions by 2050 will require the broader adoption of EVs, which can produce fewer or zero emissions. The administration wants EVs to make up half of new car sales by 2030.

Jonathan Evans, president and CEO of Lithium Americas, said in a statement that the conditional loan commitment was a “significant milestone for Thacker Pass, which will help meet the growing domestic need for lithium chemicals and strengthen our nation’s security.”

The project is also supported by General Motors, which agreed in January 2023 to invest $650 million in the company to help develop the Thacker Pass mine. Many Western auto executives have recently committed billions of dollars on deals with lithium mining companies to secure their supply of the metal.