By Adriano Marchese

Canada's Lithium Americas said General Motors will boost a planned investment in the miner's Thacker Pass project in Nevada by nearly 90% to $625 million, giving the auto maker an ownership stake in the mine producing the critical ingredient for electric-vehicle batteries.

The Detroit company's increased investment follows the U.S. Department of Energy's $2.26 billion preliminary commitment in March to finance development of lithium-processing facilities at Thacker Pass.

The Vancouver, British Columbia, company on Wednesday said GM will make a second-tranche investment into the Thacker Pass operations in Humboldt County of $430 million in cash, and a $195 million letter of credit to back reserve requirements under the DoE loan.

U.S.-listed shares of Lithium America shot up 22% in premarket trading to $3.23.

This transaction follows the first tranche of GM's investment of $320 million to acquire about 15 million common shares of Lithium Americas. It also replaces an earlier agreement for a second-tranche investment of $330 million from the companies' original deal January 2023. This original GM equity investment was for a total of $650 million.

"We're pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain," said Jeff Morrison, GM's senior vice president of global purchasing and supply chain, in a news release.

In addition to the GM and DoE deals, Lithium America earlier this year raised $275 million through a public offering of 55 million shares.

As part of the updated investment on Wednesday, GM agreed to extend its existing offtake agreement for up to 100% of production volume from the first phase of Thacker Pass to 20 years. It will also enter into an additional 20-year offtake agreement for up to 38% of second-phase production volumes.

Lithium Americas will have a 62% interest in Thacker Pass and will manage the project, with GM holding the remaining 38% interest.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

October 16, 2024 07:43 ET (11:43 GMT)

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