Lithium Americas announced that it and joint venture partner General Motors have reached a non-binding agreement in principle with the U.S. Department of Energy to advance an initial draw of $435 million under a previously announced $2.26 billion DOE loan. Under the proposed terms, the DOE will defer $182 million of debt service over the first five years. In exchange, the department will receive warrants representing a 5% equity stake in Lithium Americas and a 5% economic interest in the joint venture, each exercisable at $0.01 per share or unit. Lithium Americas will also fund an additional $120 million into loan reserve accounts within 12 months of the initial draw. General Motors will amend its lithium offtake agreement to permit the joint venture to enter into third-party offtake contracts for certain volumes not forecasted to be purchased by GM.
If the DOE exercises its joint venture warrants in full, ownership interests will be 59% for Lithium Americas, 36% for GM and 5% for the DOE, while voting rights will remain at 62% for Lithium Americas and 38% for GM. GM will hold a call option to acquire the DOE’s interest upon substantial completion of the Thacker Pass project, and the DOE will retain a put option plus an observer seat on the joint venture board. The total loan amount is now estimated at $2.23 billion, comprised of $1.97 billion in principal and $256 million in capitalized interest at a projected 5% rate. Amounts drawn under the loan will bear a long-dated U.S. Treasury rate with no spread, and the loan tenor remains about 24 years from the first draw, expected in the fourth quarter of 2025.
The Thacker Pass joint venture, managed by Lithium Americas and supported by Bechtel under a Project Labor Agreement, targets a nominal capacity of 40,000 tonnes per year of battery-quality lithium carbonate. Phase 1 construction is projected to create nearly 2,000 direct jobs, including 1,800 skilled contractors, and to enhance U.S. lithium supply chain security and job growth.
Source: Business Wire
