Shares of Lithium Americas Corp (TSE: LAC) (NYSE: LAC) doubled on Wednesday after reports that the Trump administration is considering an equity stake in the Canadian mining company.
The stock closed at USD$6.23, up from USD$3.07 on Tuesday, giving the company a market value of about USD$1.5 billion. The Vancouver-based company is developing the Thacker Pass lithium mine in northern Nevada.
The site is expected to become one of the largest lithium sources in North America, supplying a mineral crucial to electric vehicle batteries. Lithium’s role in powering cars, smartphones, and storage systems has made it a focus for governments aiming to secure domestic supply chains.
An official told CNBC that the Trump administration has not finalized the deal. However, the White House remains optimistic about the discussions. A successful agreement would mark the administration’s first direct investment in a Canadian mining company. In addition, it signals a broader strategy of gaining ownership stakes in critical minerals, which are considered vital for U.S. economic and security interests.
Earlier this year, the Department of Defense, now renamed the Department of War, bought a 15 per cent stake in MP Materials (NYSE: MP), a rare earth miner based in Las Vegas. Since then, shares of MP Materials have more than doubled. Consequently, the White House appears willing to repeat the approach with Lithium Americas.
Other companies, including fellow Canadian, NevGold Corp (CVE: NAU) (OTCMKTS: NAUFF) (FRA: 5E50) has increased antimony production to position itself as an option as well.
Meanwhile, the focus on Thacker Pass comes as the Department of Energy re-evaluates a $2.26 billion loan awarded to the company in 2024.
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Department of Energy pushing General Motors to sign supply agreement
The loan was designed to fund most of the capital needed to build a lithium processing plant next to the Nevada mine. That plant would allow Lithium Americas to refine raw material on-site and deliver battery-ready supplies to U.S. customers.
However, concerns have emerged about the project’s ability to compete with cheaper Chinese lithium. Greg Beard, a senior advisor in the Loan Programs Office, recently warned that U.S. buyers may avoid Thacker Pass because of price pressure from China.
Consequently, the Energy Department is pressing General Motors Corp (NYSE: GM) to sign a binding supply agreement. Further, GM owns a 38 per cent stake in the project.
GM invested $625 million in the project last year through a mix of cash and letters of credit. The company says the DOE loan is critical for completing construction and ensuring U.S. supply security.
“During his first term President Trump strongly supported the development of Nevada’s Thacker Pass mine,” a GM spokesperson said.
“We’re confident in the project, which supports the administration’s goals, and have committed almost $1 billion to its development, including a nearly $200 million letter of credit.”
Lithium Americas also reaffirmed its commitment. Tim Crowley, the company’s head of government affairs, said the company continues to work closely with the DOE and GM.
The DOE is currently reviewing lending practices across its $400 billion green bank. That review follows criticism that some projects could struggle in a global market dominated by lower-cost producers.
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