GM To Make $650 Million Investment In Key Nevada Lithium Mine. But There’s A Chinese Problem
(Photo by Bill Pugliano/Getty Images)
GM announced plans to invest $650 million in a Nevada lithium mine, operated by Lithium Americas, a firm whose largest shareholder has ties to the Chinese Communist Party (CCP), according to multiple reports.
Through subsidiary GFL International, Chinese mining giant Ganfeng Lithium owns 11% of Lithium Americas, a stake nearly four times greater than the next largest investor, according to CNBC. Wang Xiaoshen, a member of Lithium Americas’ board of directors and executive vice president of Ganfeng, has previously worked for Chinese state owned businesses, while Ganfeng president Li Liangbin is a member of multiple CCP-linked groups, according to reporting by the Washington Free Beacon.
Lithium Americas’ Thacker Pass mine has previously drawn criticism from Republican members of Congress, citing the national security risk of depending on Chinese companies for critical resources like lithium. Through 2019, China accounted for roughly 60% of all lithium processed worldwide, according to the International Energy Agency. (RELATED: China Is Dominating The Electric Vehicle Market. Here’s Why)
“We wanted the right and holistic partner, rather than a bunch of offtake agreements. It was worth it to wait.” – Lithium Americas CEO Jon Evans tells me https://t.co/nO0g0bSMYc
— Ernest Scheyder (@ErnestScheyder) February 1, 2023
The company has also applied for a loan through the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program. The program has disbursed $8 billion to support the production of more efficient vehicles since it was authorized in 2007, according to the Department of Energy.
“There absolutely needs to be an investigation into whether or not China financially benefits from this type of potential activity and Congress must do everything it can to prevent this from happening,” Republican Rep. Louie Gohmert of Texas told the Daily Caller News Foundation in November.
As a part of the investment, GM will get exclusive access to the initial lithium extracted at Lithium Americas’ Thacker Pass mine in 2026, according to a statement from the companies. GM anticipates that the investment in the mine — which is the largest known source of lithium in the U.S. and third largest globally — will support the production of batteries for up to one million electric vehicles per year.
Lithium Americas will receive the money in two parts, with the second part coming when Lithium Americas formally splits its U.S. and Argentina businesses, the companies’ press release states. While the company has said in the past it hopes the separation would ease lawmakers’ “geopolitical” concerns, the firm’s current shareholders will retain a proportionate stake in both of the new companies, according to Lithium Americas.
The Inflation Reduction Act offers a $7,500 tax credit for the purchase of new electric vehicles, so long as at least 40% of the minerals required are sourced domestically in the U.S. or from an ally with a free trade agreement. This requirement was, in part, intended to take control of green supply chains from China.