Lithium Americas Corp has received a conditional commitment for a $2.26-billion loan from the U.S. Department of Energy to help it build lithium processing facilities in Nevada, as the Biden Administration looks to support America-produced lithium and reduce dependence on Chinese supply.
Lithium Americas' Thacker Pass project in Humboldt County, Nevada, is located next to a mine site that contains the largest-proven lithium reserves in North America, DOE said.
The U.S. Administration plans to extend the $2.26 billion loan under the Advanced Technology Vehicles Manufacturing Loan Program. The government funding is intended to help finance the construction of Thacker Pass, targeted to produce an initial 40,000 tonnes per year of battery-grade lithium carbonate, Vancouver-based Lithium Americas Corp said in a statement.
Lithium Americas targets mechanical completion of Thacker Pass Phase 1 for 2027. Major construction is expected to start in the second half of this year, following the anticipated closing of the DOE Loan and issuance of full notice to proceed (FNTP), which is expected in the second half of 2024.
"The United States has an incredible opportunity to lead the next chapter of global electrification in a way that both strengthens our battery supply chains and ensures that the economic benefits are directed toward American workers, companies and communities," Lithium Americas' president and CEO Jonathan Evans said.
The lithium price crash over the past year is holding back reinvestment in new supply, the world's top lithium producer Albemarle has said recently.
While major lithium suppliers continue to see a surge in long-term demand as the energy transition gathers momentum, the current low price environment is "unstainable," Kent Masters, Albemarle's chairman, president, and CEO, said on the company's earnings call last month.
The current lithium prices are not in a range allowing projects, especially in the West, to get off the ground, Masters added.
The deferral of new supply developments amid the low prices is setting the stage for the next lithium supply crunch later this decade, executives and analysts say.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More