Energy Department grants $2.26B loan for Nevada lithium project

March 16 (UPI) -- Lithium Americas has received conditional approval for a multi-billion-dollar loan from the U.S. Department of Energy to help fund a massive development project in Nevada.

The Canadian mineral exploration company confirmed the $2.26 billion loan earlier this week, which will cover a three-year period and comes with an estimated $290 million worth of interest.

Interest falls in line with applicable U.S. Treasury rates.

The Vancouver-based company plans to use the money to develop its Thacker Pass project in Humboldt County, Nev. The site is located approximately 200 miles northeast of Reno.

"The United States has an incredible opportunity to lead the next chapter of global electrification in a way that both strengthens our battery supply chains and ensures that the economic benefits are directed toward American workers, companies and communities," Lithium Americas President and CEO Jonathan Evans said in a statement on the company's website.

"The ATVM Loan Conditional Commitment announced today by the DOE is a significant milestone for Thacker Pass, which will help meet the growing domestic need for lithium chemicals and strengthen our nation's security."

The facility itself is expected to produce 40,000 metric tons per year of battery-grade lithium carbonate once fully operational. The inorganic compound will be primarily used in electric vehicles.

The British Columbia mineral explorer expects to reach full capacity by 2027 and could eventually increase production by 80,000 metric tons annually as the market for electric vehicles grows.

General Motors owns an equity stake in the project, after investing $650 million earlier last year.

The project is also being buoyed by an equity investment from General Motors. The auto manufacturer announced the investment of $650 million in early 2023, which also included a supply agreement,

"Thacker Pass is a treasure trove of lithium -- key to strengthening U.S. energy security and electrifying America," Energy Secretary Secretary Jennifer Granholm said in a statement on X.

"By presenting this $2.26B conditional loan, we'll help level the global playing field and supercharge clean energy manufacturing nationwide."