Department of Energy officials met in Washington, D.C., in early June with executives from Lithium Americas, the developer of Thacker Pass, a proposed project in northern Nevada that is the largest planned lithium mine in the United States.
The first Trump administration approved the development of Thacker Pass in 2020 and, since then, the project has received widespread bipartisan support because it sits on one of the world’s largest known deposits of lithium. The mineral, which is largely controlled by China, is required to manufacture batteries and military equipment, making it vital to American energy and national security.
The purpose of the June meeting was twofold: to facilitate introductions, and to ensure the company remained on track to receive a $2.3-billion loan issued by the Biden administration to help finance a lithium processing facility at Lithium Americas’ flagship Nevada mine. The facility is a central part of the Thacker Pass project. Without it, lithium extracted at the mine would be exported to a foreign processing facility because the United States currently has no lithium processing capacity. China dominates the sector.
But, according to two people with direct knowledge of the situation, the meeting turned “surprisingly rough,” and the loan now hangs in the balance.
The stakes for the future of the project are high. If the loan falls through, Lithium Americas will have to pause the project indefinitely as it attempts to secure alternative financing and fend off bankruptcy. “The largest lithium project in the country could go tits up,” said one person familiar with the project.
The stakes are also high for the country. Once it’s up and running, Thacker Pass would produce up to 40,000 tons of lithium per year. That’s at least eight times more than the United States currently produces and would make the United States one of the world’s top producers of the strategically significant mineral overnight.
“If this project comes to fruition as it ought to, I think it really does take a big bite at the apple in terms of both reshoring and diversifying resources,” Nick Loris, the executive vice president of policy at the right-leaning energy firm C3 Solutions, said in an interview. “Given the bang for your buck that we could get from the lithium production out of this mine, it is one of the, I think, most critical projects that we have in the United States.”
During the June meeting, however, top Energy Department loan official Gregory Beard questioned the project’s viability, suggesting it doesn’t have enough customers lined up and will struggle for buyers as companies will default to purchasing lithium from China even once the project is operational. Beard, sources say, cited China’s lithium prices, a figure the Chinese government and Chinese battery behemoth CATL manipulate.
In light of his concerns, Beard offered to sign off on the loan if General Motors, Lithium Americas’ lead investor, would agree to a “take or pay” clause binding the automaker to purchase a set amount of the lithium produced at the facility over the next two decades. Lithium is a primary component of electric vehicle batteries, which General Motors has committed to manufacturing more of.
Beard’s proposal reveals a tension between the Trump administration’s Department of Government Efficiency-oriented approach to federal spending, and its emphasis on American energy independence. On one hand, Beard’s proposal could eliminate risk for taxpayers. On the other, it could lead to the demise of a project that would help reshore a critical mineral and empower the United States vis-à-vis China.
According to the latest data, the United States mines 2 percent and processes none of the world’s lithium. China, though, mines 17 percent and processes up to 70 percent of it, enabling America’s top geopolitical adversary to produce the majority of the world’s batteries and battery components, and control supply chains critical for energy and military technology.
It’s why the Trump administration has made lithium production a strategic priority. In recent months, the White House has fast-tracked a number of mining projects, including two proposed lithium processing facilities whose permitting is overseen by the Department of Energy. “We’re going to treat this sector like it’s a priority,” a senior White House official told the Washington Free Beacon in April.
And the Department of Commerce is investigating China’s critical mineral exports to the United States over national security concerns. Interior Secretary Doug Burgum, who chairs the National Energy Dominance Council, said this month the battery supply chain “starts underground in America.”
Under Beard’s proposal, General Motors would have to commit hundreds of millions of additional dollars to a project in which it has already invested nearly $1 billion, and it would have to do so at a time when electric vehicle sales are slowing nationwide. Instead, General Motors prefers the terms Biden energy officials signed off on, in which the automaker maintains the right of first refusal on lithium produced at Thacker Pass but is not bound by a set purchase commitment for decades.
Other commercial buyers, including a smartphone glass maker in New York and a battery maker in California, have also expressed interest in purchasing from the Thacker Pass facility, the Free Beacon has learned. Such interest, in addition to skyrocketing global demand for lithium, might suggest General Motors doesn’t need to agree to a “take or pay” arrangement.
“We’re confident in the project, which supports the administration’s goals, and have committed significant resources,” General Motors said in a statement.
Since the June meeting, Lithium Americas, General Motors, and the Department of Energy have remained at an impasse. The three players have held additional meetings, including on Aug. 15, but have not been able to strike a deal. The first tranche of the loan was slated for disbursement earlier this month, but it was not sent.
“DOE is utilizing a variety of tools, including the Loan Programs Office, to strengthen domestic supply chains for critical minerals and unleashing American energy dominance,” an Energy Department spokeswoman said in a statement. “We are continuing to evaluate the LPO portfolio to ensure our limited taxpayer resources are used to advance the best interests of the American people and generate a return on investment.”
Thacker Pass has received bipartisan support from Nevada lawmakers, including Republicans Rep. Mark Amodei and Gov. Joe Lombardo, and both of the Democratic senators who represent the state.
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