(Reuters) -Canadian miner Lithium Americas (NYSE:LAC) said on Wednesday General Motors (NYSE:GM) will contribute $625 million to their new joint venture for developing the Thacker Pass project in Nevada.
U.S. automakers are ramping up their output of EVs and hybrids and aiming to reduce their reliance on China for battery-related materials in a competitive market.
U.S.-listed shares of Lithium Americas were up 16.5% at $3.11 in premarket trade.
The Vancouver, Canada-based firm said GM will acquire a 38% asset-level ownership stake in Thacker Pass for $625 million, which includes $430 million of direct cash funding to support the construction of Phase 1 and a $195 million letter of credit facility.
The new agreement replaces the delayed investment worth $330 million in August by both companies.
Earlier this year, the U.S. Department of Energy had planned to lend Lithium Americas up to $2.26 billion to build the Thacker Pass lithium project, which holds enough of the battery metal to build 1 million electric vehicles annually.
The company said it expects to close the DOE loan in the next few weeks and intends to make the final investment decision for the project by the end of the year.
Initial construction at the site in Humboldt County, just south of Nevada’s border with Oregon, started in March 2023 after Lithium Americas won a long-running and complex court case against conservationists, ranchers and Indigenous communities.
The lithium miner said GM will also enter into an additional 20-year offtake agreement for up to 38% of production from Phase 2 of Thacker Pass, upon closing of the transaction.
Separately, GM said it would invest $10 million into material science firm Forge Nano. The automaker intends to use the firm’s battery material coating on EV cells to increase performance and lifetime.