A Nevada district court judge affirmed on Monday the federal government’s decision to license the Thacker Pass lithium mine north of Winnemucca to Lithium Americas (TSX: LAC), following three legal challenges from conservationists, indigenous communities, and a local rancher against the permit issued in 2020.
Judge Miranda M. Du ruled that the U.S. Bureau of Land Management (BLM) did not make a mistake in approving the permit for the large lithium mine, but the agency was asked to reexamine one element of the environmental analysis on which the decision was based. The verdict may allow the mine to proceed, staying the hope to invalidate the federal permitting as the challengers wanted.
“While this case encapsulates the tensions among competing interests and policy goals, this order does not somehow pick a winner based on policy considerations. That is not this Court’s role,” Judge Du penned in the decision.
Lithium Americas shares surge by at least 11.6% when the markets opened Tuesday following the news.
The plaintiffs are asking the court to review BLM’s record of decision (ROD) under the Administrative Procedure Act (APA) to challenge the agency’s compliance with federal statutes as it grants the permit to Lithium Americas. Upon reviewing precedents, the court agreed with the plaintiffs that “BLM’s approval of the project violated [Federal Land Policy and Management Act] as it relates to the approximately 1300 acres of land Lithium Nevada intends to bury under waste rock because BLM did not first make a mining rights validity determination as to those land.”
But otherwise, the court agrees with BLM’s decision, rejecting arguments that the agency violated the National Environmental Policy Act by failing to adequately assess the project’s impacts on air quality, wildlife, and groundwater and violated the National Historic Preservation Act by failing to consult with tribal plaintiffs before approving the project.
However, the court further found that this is a rare case in which remand without vacatur is appropriate, partly because the records indicate that BLM could correct the error identified by the court.
“The Court will remand for BLM to fix the error—to determine whether Lithium Nevada possesses valid rights to the waste dump and mine tailings land it intends to use for the Project. But the Court declines to vacate the ROD pending BLM’s review of the mining plan of operations portion of the Project,” the decision read.
This essentially means that the ball is back to the BLM for it to “determine whether Lithium Nevada possesses valid rights to the waste dump and mine tailings land it intends to use for the project.” But, the permit granted isn’t vacated.
“This decision was not unexpected,” Will Falk, an attorney for the Reno-Sparks Indian Colony, said in an emailed statement Monday. “American law prioritizes mining on public land over all other uses — including Native American spiritual uses. Until that changes, law will be a limited tactic in protecting public land and Native American sacred places. We were prepared for this and the campaign to protect Thacker Pass will move into the next phase. We’re not giving up.”
Some groups, including the plaintiffs in the lawsuit, have criticized the permitting decision as a hurried procedure that failed to take into account cultural and spiritual ties to the area.
Elders and traditional members of the Fort McDermitt Paiute and Shoshone Tribes, whose lands are around 50 miles from the mine, founded The People of Red Mountain in 2021 to oppose the project and places known as Peehee Mu’huh, or “rotten moon,” a reference to an 1800s massacre.
Lithium Americas owns a 100% stake in Thacker Pass. The property may have sufficient resources to produce 60,000 tonnes of battery-grade lithium carbonate per year for 46 years.
Recently, the mining firm announced a deal with General Motors (NYSE: GM) to develop the Thacker Pass, with the automaker set to infuse $650 million in Lithium Americas, which amounts to the largest investment by an auto manufacturer into raw materials for batteries. In exchange, GM would have exclusive access to Thacker Pass’ Phase 1 lithium carbonate output and a right of first refusal on Phase 2 production.
The investment is to occur in two tranches, with the first tranche to be held in escrow pending the outcome of the ROD ruling from the US District Court, and certain other undisclosed conditions.
Once conditions are met, GM will become a shareholder in Lithium Americas.
Lithium Americas also recently released a constructive feasibility study which concluded that when the project is fully operational, it could generate average EBITDA of more than $1 billion annually for forty years based on conservative commodity prices.
Lithium Americas has spent the last two years addressing the mine’s impact on the communities of Kings River Valley, Orovada, and McDermitt. The corporation signed a community benefits agreement with the Fort McDermitt Paiute and Shoshone Tribe in 2022. It has also promised to construct a new K-8 school in Orovada.
Lithium Americas Corp. last traded at $34.71 on the TSX Exchange.
Information for this briefing was found via The Nevada Independent and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.