Lithium Americas gets $2.26B loan from US Energy Dept.
Shares of Lithium Americas Corp. (LAC) are rising Thursday afternoon after receiving a conditional commitment from the US Department of Energy for a loan worth $2.26 billion. Lithium Americas plans to utilize this loan to invest into its Thacker Pass mining operation and create a lithium processing plant.
Yahoo Finance's Ines Ferre breaks down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
JULIE HYMAN: Shares of lithium, Americas getting a boost. The company receiving a conditional commitment from the Energy Department for a loan worth $2.25 billion. Lithium Americas is going to use that loan for financing its Thacker pass construction plan amid its electrification efforts.
And this is obviously it's benefiting the stock today, which is trading higher by a little more than 5%. I mean, there's a lot at stake here because of the demand for lithium and because of the US reliance on Chinese lithium. So this is a step in the direction of reshoring or creating that Native industry.
JOSH LIPTON: Yeah, I mean, used in EV batteries, solar panels, wind turbines, you name it. There was some drama around this one, which is interesting. You had tribal groups. You had environmentalists.
They were not happy about this. She went to court argued it threatened the surrounding landscape. But they were unsuccessful there.
To your point, it does sound like listen bottom line. This is about securing a domestic supply chain.
JULIE HYMAN: Right. Exactly. Our Ines Ferre has covered the lithium industry and is digging into this story today. Ines, what else can you tell us about this loan and how significant it is?
INES FERRE: Yeah, it's very significant. In fact, it's the biggest US lithium project when it comes to this processing plant that will be paid for by this loan. The majority of the loan or the loan will pay for the majority of the processing plant that will go in Nevada.
And that's significant because processing is one of the things that China has really a real strong hold on refining processing lithium. And they are years ahead of the US in this. So it's significant that this will be used for processing lithium.
And this lithium, of course, once it's processed will be used for battery cells, as you guys were just mentioning. And it's significant also because the automakers, because of the Inflation Reduction Act and that $7,500 credit for EVs, well, that credit is only if the battery components are made in countries that are not foreign entity of concern. And that would include China.
So what's happening is that you've got these automakers that are now reshuffling where they will be getting their lithium from. So it's significant for the industry as a whole. It's also significant and the timing, of course, because the lithium market. As one lithium player told me we're in a bear market right now.
So the fact that this is coming now, look, these projects take years to complete. This plant will take about three years to complete. They're hoping that by 2028, they'll be in full operation, guys.
JULIE HYMAN: All right. We will keep tracking. And thanks so much, Ines. Appreciate it.
