DETROIT — General Motors has agreed to establish a joint venture with Lithium Americas Corp. that includes the automaker supplying $625 million in cash and credit to the Canadian mining business, the companies announced Wednesday.

The deal is centered on the development, construction and operation of a lithium carbonate mining operation called Thacker Pass in Humboldt County, Nevada. Lithium is a key component for batteries that power electric vehicles.

The joint venture agreement replaces a previously announced, planned equity investment by GM into the Vancouver, Canada-based company.

Securing raw materials such as lithium from the U.S. is crucial to GM’s plans to profitably grow its all-electric vehicle business and meet tightening federal requirements for incentives to produce and sell the vehicles and the large batteries needed to power them.

“We’re pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain,” Jeff Morrison, GM senior vice president of global purchasing and supply chain, said in a release. “Sourcing critical EV raw materials, like lithium, from suppliers in the U.S., is expected to help us manage battery cell costs, deliver value to our customers and investors, and create jobs.”

The announcement sent shares of Lithium Americas higher by 23% in trading Wednesday to close at $3.29. The company’s market cap is $532.9 million.

GM will have a 38% interest in Thacker Pass, according to the release. The joint venture investment is expected to include $330 million cash to be contributed on the date of its closing; $100 million cash to be contributed at a “final investment decision” for a phase of the project; and a $195 million letter of credit facility prior to first draw on the $2.3 billion Department of Energy Loan.

“Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass,” Lithium Americas CEO Jonathan Evans said in a release.

The joint venture is in addition to GM’s $320 million investment into Lithium Americas in February 2023. The investment included GM acquiring approximately 15 million common shares of Lithium Americas.

In August, GM and Lithium Americas agreed to delay a second tranche investment worth $330 million in the miner to explore alternative structures for the investment.