GM to invest $625 million in a joint venture to mine EV battery raw materials in the U.S.

• Lithium Americas Corp. has secured a $625 million investment from GM through a joint venture agreement.
• The focus of the agreement is on the creation, implementation, and maintenance of a lithium carbonate mining operation known as Thacker Pass in Humboldt County, Nevada.

Lithium Americas Corp. has agreed to establish a joint venture with Detroit, with the automaker providing $625 million in cash and credit to the Canadian mining business, the companies announced Wednesday.

The focus of the agreement is on the creation, implementation, and maintenance of a lithium carbonate mining operation known as Thacker Pass in Humboldt County, Nevada. Lithium is a crucial element for batteries used in electric vehicles.

Acquiring raw materials like lithium from the U.S. is vital for GM to expand its all-electric vehicle business and meet the strict federal standards for vehicles and batteries.

"Lithium Americas is making significant progress in helping GM achieve its goal of developing a resilient EV material supply chain, according to Jeff Morrison, GM senior vice president of global purchasing and supply chain. Sourcing critical EV raw materials, such as lithium, from suppliers in the U.S. is expected to help GM manage battery cell costs, deliver value to customers and investors, and create jobs."

On Wednesday, during premarket trading, Lithium Americas' shares surged by more than 20% to approximately $3.25 per share. Meanwhile, General Motors' stock remained relatively stable following the previously announced equity deal.

According to the release, Thacker Pass will have a 38% interest in GM, with a joint venture investment of $330 million cash to be contributed on the date of closing, $100 million cash to be contributed at a "final investment decision" for a phase of the project, and a $195 million letter of credit facility prior to the first draw on the $2.3 billion Department of Energy Loan.

Lithium Americas CEO Jonathan Evans stated in a release that our relationship with GM has been strengthened through a joint venture, as we continue to work towards a shared goal of establishing a domestic lithium supply chain by advancing the development of Thacker Pass.

Lithium Americas received an additional $320 million investment from GM in the form of a joint venture, in addition to the $320 million investment in February 2023 that included GM acquiring approximately 15 million common shares of Lithium Americas.

In August, GM and Lithium Americas decided to postpone a $330 million second tranche investment in the miner to examine other investment options.