Shares of Canadian mining firm Lithium Americas (NYSE: LAC) surged 98.7% to $6.10 in after-hours trading on Tuesday, following reports that the U.S. government is negotiating an equity stake in the company. The potential investment is tied to the restructuring of a $2.3 billion Department of Energy (DOE) loan originally approved during the Biden administration.
The move signals the Trump administration’s intensified efforts to secure domestic supply chains for critical minerals and reduce reliance on China. According to sources, Washington is seeking up to a 10% stake in Lithium Americas, which is developing the Thacker Pass lithium project in Nevada—a deposit hailed as the largest of its kind in the Western Hemisphere.
A Trump administration official confirmed the negotiations, describing the targeted stake as “small” but declining to disclose specifics. This marks the administration’s third recent direct equity involvement in key sectors, following a 10% stake in Intel via debt conversion and a $400 million investment in rare earth producer MP Materials.
In response to the government’s request, Lithium Americas has offered zero-cost warrants equivalent to 5%–10% of its common shares to adjust the loan’s amortization schedule. A White House official emphasized, “There’s no such thing as free money,” underscoring the balance between supporting strategic industries and safeguarding taxpayer interests.
Scheduled to begin production in 2028, Thacker Pass is expected to yield 40,000 metric tons of battery-grade lithium carbonate annually in its first phase—enough to power up to 800,000 electric vehicles. This output would dramatically boost U.S. lithium production, which currently stands below 5,000 metric tons per year. Over 600 contractors are currently on-site at Thacker Pass, located about 40 miles south of the Nevada-Oregon border.
The project has bipartisan support as a cornerstone of America’s strategy to counter China’s dominance in lithium processing. China produces over 40,000 metric tons of lithium annually and controls more than 75% of global refining capacity.
With total costs estimated at $2.93 billion, the Thacker Pass project secured a 24-year DOE loan with interest rates tied to U.S. Treasury rates. However, concerns over repayment capacity amid low lithium prices—driven by Chinese overproduction—prompted the Trump administration to renegotiate terms before the first loan disbursement this month.
Under a joint venture formed in December 2023, Lithium Americas holds a 62% stake in Thacker Pass, while General Motors invested $625 million for 38% and secured a 20-year offtake agreement for the project’s initial phase. The administration is now urging GM to cede partial control to the government and provide written purchase commitments for lithium output.
A GM spokesperson affirmed the project’s alignment with national goals, calling the loan a necessary part of financing to commercialize this important national resource. Lithium Americas declined to comment on ongoing talks but stated it remains in “active discussions” with the DOE and GM.
