The shares of Lithium Americas soared almost 60% on premarket trades Wednesday, following a Reuters article that said the Trump Administration is looking to acquire up to ten percent of the Canadian mining company.
This stake is tied to the renegotiation of a US Energy Department Loan for the Thacker Pass Lithium Project in Nevada. The project was a joint venture between General Motors and the company.
Washington’s latest move in a sector deemed crucial to national security is the potential agreement.
Recently, the administration sought to acquire equity in Intel and MP Materials as well as other companies in order to ensure domestic production of technology and minerals.
A White House official said to Reuters the President wanted the project’s success while protecting taxpayers interests.
The official said that “President Trump is in favor of this project.” “He wants the project to be successful and fair for taxpayers,” said an official. There’s nothing like free money.
Thacker Pass is seen as the linchpin in US supply chain
It is planned that the Thacker Pass Mine, which has been under construction on-site for more than a year, with over 600 contractors, will open in 2028.
It is located about 25 miles from the border between Nevada and Oregon. This area will become the biggest lithium deposit in the Western Hemisphere.
The lithium is an important component of batteries used in electric vehicles, electronics and other electronic devices.
This project is essential to US efforts in building a domestic supply network and reducing reliance on China. China dominates the refining of lithium and processes more than 75% global supply.
Thacker Pass Phase One is expected to produce up to 400,000 metric tons (40,080 lbs) of lithium carbonate, which can be used to power 800,000 vehicles.
This mine could produce more lithium than Albemarle which is currently the largest US producer of the metal.
Equity stake is a good indicator for ROIC, say analysts
Analysts suggest that the increase in equity stakes may be a sign of stronger government support.
Analysts at Jefferies said that “Markets may view equity stakes in a positive ROIC (return of invested capital )…, the incentives for taking on equity stakes appear to be significantly greater than withdrawals from funding.”
General Motors shares, which hold 38% of Thacker Pass, rose 2.9% in value before the bell.
Albemarle, Sigma Lithium and SQM all saw their shares rise in the light trading.
Trump approved the project at its estimated cost of $2.93billion in his previous administration.
The Department of Energy’s Loan Programs Office, which closed the loan during the Biden Administration, is now pursuing a strategy that ties state funding to equity stakes directly in key projects.
The global race to lithium intensifies
China continues to be a major player in the lithium market. It produces more than 40 000 metric tons of the material annually, and refines the vast majority into battery grade materials.
Washington considers the Thacker pass project crucial for diversifying energy supply and strengthening security.
Nevada’s mine could have a significant impact on the US, which currently produces less that 5,000 tons of copper per year.
Analysts believe that US participation through equity stakes would accelerate investments and bring stability to a sector in which supply security has become increasingly linked with geopolitical strategies.
Lithium Americas, which reported a large net loss for the second quarter of the year, may now be able to change its outlook. This could cement the role that the company will play in America’s vital minerals future.
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