A Canadian company is hoping to get approval and federal funding for a new lithium mine in northern Nevada, but former Secretary of State Mike Pompeo and Republican lawmakers are raising concerns about the mining company’s largest shareholder, a Chinese firm. The mining company is going through with an effort to dilute this Chinese ownership, but concerns remain about China’s potential influence over the critical mineral mine at a time when China is seeking to overtake the U.S. as a dominant global power.
Lithium Americas, a Canadian-based company, has been trying to get approval from the U.S. federal government to proceed with its Thacker Pass mine in northern Nevada for years but is awaiting approval to begin mining. The company is already facing a variety of legal challenges to the new mining project — including from Native American and environmental groups — but the Republican politicians are also honing in on the mining company’s largest shareholder: China-based Ganfeng Lithium Co Ltd.
Lithium is a key material for electric batteries. Lithium Americas is trying to get approval for the Thacker Pass mine at a time when China controls roughly 60 percent of the world’s lithium resources and has a commanding position over the electric battery supply chain. Bloomberg Law reported the U.S. currently only has one lithium mine in operation at Albemarle’s Silver Peak in southwestern Nevada.
Adding to the concern, Sen. Tom Cotton (R-AR) said Ganfeng is partly owned by China’s ruling Chinese Communist Party (CCP).
The Washington Free Beacon reported Ganfeng currently owns a more than 10 percent stake in Lithium Americas.’ Earlier this month, Lithium Americas announced a corporate restructuring that it told the Washington Free Beacon it hopes will ease the “geopolitical” concerns surrounding Ganfeng’s ownership stake.
On Nov. 3, Lithium Americas announced it would split into two independent public companies. The Canadian company had primarily been focused on mining projects in Argentina and announced that the split-off company Lithium International would assume Lithium Americas’ Argentine mining assets, while Lithium Americas would keep the Thacker Pass project and the company’s other North American investments.
Ganfeng holds direct ownership stakes in some of the Argentine mining assets and, by splitting off that part of the company, Lithium Americas could dilute its Chinese ownership in the Thacker Pass project. The Washington Free Beacon reported some Republican figures are still concerned about the Lithium Americas split, because the current Lithium Americas shareholders will receive stakes in both Lithium International and Lithium Americas after the split goes though, in direct proportion to their current holdings in Lithium Americas.
While the Lithium Americas’ split will compartmentalize the Argentine mining projects where Ganfeng holds a direct ownership stake, the Chinese firm will still have a key financial interest in the part of the entity that will own the Nevada lithium mine. Ganfeng’s ownership stake in the Thacker Pass mine would continue unless Ganfeng divested from Lithium Americas entirely.
In a statement to the Washington Free Beacon, Pompeo called the Lithium Americas’ split a “half measure” that he said is “nowhere near enough to guarantee that the CCP will not have any amount of control over a key source of America’s lithium supply.”
Pompeo told the publication that the U.S. Treasury Department — which is reviewing the proposed mining deal — should not approve the Thacker Pass mine until
“Until we know that no CCP-controlled shareholder is involved in this project, the Treasury Department should not allow it to move forward,” Pompeo said.
In addition to the U.S. Treasury potentially approving the Thacker Pass mining project, the U.S. Department of Energy (DOE) may also provide funding for the Nevada lithium mine. In December of last year, President Joe Biden’s White House announced the DOE’s Loan Programs Office (LPO) would manage $17 billion worth of government loans for electric vehicle batteries.
According to the Washington Free Beacon, a DOE loan for the Thacker Pass mine would cover “the majority” of the Nevada lithium mine’s cost.
In September, Cotton called on Energy Secretary Jennifer Granholm to provide information about the DOE’s potential funding of the Thacker Pass mine.
“The U.S. government should apply strict oversight regarding potential federal funding of CCP-owned or -controlled entities,” Cotton said at the time. “DOE’s loan for the Thacker Pass mine would be substantial and reportedly cover the majority of the project’s capital costs. It is critical that DOE ensure taxpayer funding does not go to corporations with CCP ties and does not increase U.S. mineral dependence on China.”
Last month, the Canadian government ordered three Chinese firms to divest from Canadian lithium and rare metals mining companies.
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