The administration of United States President Donald Trump is considering as much as a 10 percent stake in Lithium Americas, a Canada-based lithium mining company.
Reuters reported on Tuesday that the White House is considering taking a stake in the company, citing two people familiar with the matter.
The possible investment comes as part of the $2.2bn loan from the US Department of Energy for the company’s Thacker Pass mining project in northern Nevada, the largest planned project of its kind in the Western Hemisphere.
The Vancouver, British Columbia-based company confirmed on Wednesday that it has been in discussions with the Department of Energy and with General Motors over the Thacker Pass loan.
Government stake
The move underscores Trump’s increasing use of direct government ownership to steer strategic sectors and curb reliance on China, which dominates refining of many critical minerals.
China produces more than 40,000 metric tonnes of lithium annually, ranking third after Australia and Chile, but it dominates refining, processing more than 75 percent of the world’s lithium into battery-grade material.
The project is seen as a linchpin in building a domestic supply chain, part of Washington’s longstanding drive to boost US production of lithium, a metal used to make batteries for electric vehicles and other electronics.
The Trump administration recently moved to take a stake in chipmaker Intel. That came on the heels of a deal that would make the Department of Defense the largest shareholder in rare earths firm, MP Materials.
Jefferies said the administration’s preference for equity stakes, viewed as lower political cost than tax increases, can support financing, corporate profits, and favourable returns on invested capital.
Lithium Americas’ Canadian and US-listed shares were both up about 90 percent at 8.04 Canadian dollars ($5.78) in Canada and $5.80 in the US. The company had a market value of $744.5m as of last close on the New York Stock Exchange.
GM, which invested $625m in the mine last year for a 38 percent stake, has the right to buy all of the project’s lithium from its first phase and a portion from the second phase for 20 years, although Trump officials are now seeking a guarantee that GM will buy the metal, according to the sources.
NBCFM Research analyst Mohamed Sidibe said the MP Materials-Defense Department model shows how government equity, long-term offtake, and price support can de-risk strategic projects.
A similar approach for Lithium Americas could strengthen funding and project durability, though it may dilute existing shareholders, he added.
The Thacker Pass project is expected to begin production in 2028.
Morningstar analyst Seth Goldstein said an equity stake could include offtake price guarantees, potentially making Thacker Pass profitable even if lithium prices remain lower for longer.
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