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Lithium Americas poised to meet growing demand, CEO says

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Lithium Americas poised to meet growing demand, CEO says

➤ Investment from automakers and utilities gives the U.S. government leverage to advance its decarbonization agenda, Lithium Americas CEO and President Jon Evans said.

➤ But lengthy environmental review processes in the U.S. can sometimes deter investors from backing the mineral industry's resource development ambitions early on, Evans said.

➤ Evans remains confident in the federal government's final decision on a proposed lithium project in Nevada, even as the decision faces a court challenge.

After roughly a decade of planning, Lithium Americas Corp. has a pair of new lithium assets poised to come online: the Cauchari-Olaroz project in Argentina and the Thacker Pass project in Nevada. Meanwhile, prices for lithium have surged this year, and a heightened drive to decarbonize the transportation sector has many analysts predicting appetite for the white metal used in many electric vehicle batteries could soon outstrip supply. S&P Global Market Intelligence spoke with Lithium Americas President and CEO Jon Evans on May 21 to learn how the Canadian company plans to respond to skyrocketing demand for battery-quality lithium. The following conversation was edited for clarity and space.

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Lithium Americas President and CEO Jon Evans

Source: Lithium Americas Corp.

S&P Global Market Intelligence: How is Lithium Americas positioning itself to meet the growing global demand for battery-quality lithium?

Jon Evans: For us, we have a head start. Both of our assets have been under development for a really long time, about a decade. The timing is really opportune. The asset in Argentina is going to come online next year. ... There's a lot of excitement in Argentina now around diversifying their economy and trying to attract other aspects of the supply chain there. As a project, we are really seen by the provincial and federal government as a way to pull in more investments. There's a huge amount of support and anticipation for us to get started, as it charts a new path for Argentina.

Then, in the U.S., you have this untapped, massive resource in northern Nevada that is going to be essential to meet market demand — not only globally, but even more importantly in North America, as the supply chains here are going to be put in place. We've had conversations with automotive manufacturers, and they very much want to have a supply chain here in the U.S., or a system that mimics what they have today for internal combustion engines. ... We are one of the legs in the stool, if you will, where you need high-quality lithium chemicals. And that pulls in other things like cathode manufacturing and other battery components that go into the cells and packs that eventually go into cool things like the Ford F-150. I think we are really positioned well within two different geographies.

What influence has the Biden administration had on lithium markets, if at all?

I think the climate now is very positive for resource development in the U.S. if it's done in the right way. ... I think the backdrop has changed because the government is actually getting help. You have real investment now from automotive manufacturers and also utility companies that see utility-scale batteries as critical in making renewables. The combination of both of those has given the government a lot of leverage to push this forward. There's a real commitment with private dollars behind it to make this successful.

The federal government reached a record of decision in January, approving your proposed Thacker Pass project. But the project continues to face some opposition from environmental groups and local residents. What's the status of the project?

There is an appeal, and that is part of the process. That generally happens when you have a record of decision. We're confident in the process that we went through, and when we look at what is being appealed, it is covered already in the final environmental impact statement. ... But it was not unexpected to have an appeal. I think people are surprised actually when something gets permitted, which is really sad. It is one of the issues that we face in the U.S.

Does the pushback deter you from potentially exploring other federal lands in the U.S. for lithium development?

No, it would not deter us at all.

What are some of the challenges the industry faces when permitting takes several years in the U.S.?

What is difficult, I think, in our sector, is if an investor has no confidence that something is going to get permitted, they're not going to put any money behind it. And if it takes a decade or longer, that is time and value of money, so that investment then goes to other places. ... But we have no complaints. I think it has actually been great that the Biden administration has been very public around their support for the entire sector ... I think they see the big picture.

Are you seeing increased fundraising levels for lithium this year? Or did you see an uptick in fundraising after you received a record of decision on the Thacker Pass project?

We were very opportunistic and our timing was good in January. The stock market has its own beat, so things have cooled off a little bit as COVID-19 has declined and people have rotated into other types of stocks that might have more potential upside. But still, the interest is there on our end from a variety of companies across the sector — from automotive companies to chemical companies to oil and gas companies and minerals traders. It's a pretty broad spectrum of potential partners that really believe in the transition, want to get in early, and also like the fact that the resources are in North America. There's a real belief that there will be a supply chain here and that we are going to need the critical minerals to support that.

Are you exploring any other regions for lithium development?

We actually have looked around. We have been in 19 states looking for other lithium — on the East Coast, throughout the Southwest, and in the West. We haven't found anything yet that rivals Thacker Pass, but we are on the hunt. And we have the skillset internally to try to figure out how to do it and do it sustainably. But there will be other projects that will be needed in the U.S. and we want ... to find it and see if it makes sense to develop. The market certainly is going to need it in North America, and it takes years to develop. It's been two years now where we have had the teams out looking in California, Arizona, Wyoming, Texas — all over the place.