Shares of Lithium Americas surged by almost 60% in premarket trading on Wednesday after a Reuters report that the Trump administration is seeking an equity stake of up to 10% in the Canadian miner.
The stake would be tied to renegotiations of a $2.26 billion US Energy Department loan for the company’s Thacker Pass lithium project in Nevada, a venture with General Motors.
The potential deal marks the latest intervention by Washington in sectors deemed vital to national security.
The administration has recently sought equity positions in Intel, MP Materials and other firms to secure domestic production capacity in technology and minerals.
A White House official told Reuters that the president wanted the project to succeed while safeguarding taxpayers’ interests.
“President Trump supports this project. He wants it to succeed and also be fair to taxpayers,” the official said. “But there’s no such thing as free money.”
Thacker Pass seen as linchpin of US supply chain
The Thacker Pass mine, under construction for nearly a year with more than 600 contractors on site, is slated to open in 2028.
Located about 25 miles south of Nevada’s border with Oregon, it is expected to become the largest lithium source in the Western Hemisphere.
Lithium is a crucial component in batteries for electric vehicles and electronics.
The project is central to US efforts to build a domestic supply chain and reduce reliance on China, which dominates lithium refining and processes over 75% of global supply.
Phase one of Thacker Pass is projected to produce 40,000 metric tons of battery-quality lithium carbonate annually, enough for up to 800,000 electric vehicles.
The scale could surpass the regional output of industry leader Albemarle, which currently operates the only US lithium mine.
Analysts say equity stake an indicator of favourable ROIC
Shares of Lithium Americas jumped from around $3 to $5.54 following the news, with analysts suggesting equity stakes could signal stronger government support.
“Markets can view equity stakes as a leading indicator of favorable ROIC (return on invested capital)… the incentive for taking equity stakes seem significantly higher than withdrawing funding,” said analysts at Jefferies.
General Motors, which owns 38% of the Thacker Pass project, saw its shares rise 2.9% before the opening bell.
Other lithium producers also benefited, with Albemarle up 5.2%, Sigma Lithium gaining 5.3% and SQM climbing 2.7% in light trading.
The project’s estimated $2.93 billion cost was first approved at the end of Trump’s previous term.
While the Department of Energy’s Loan Programs Office closed the loan under the Biden administration, current talks reflect Trump’s strategy of tying state support to direct equity stakes in critical projects.
Global race for lithium intensifies
China remains a dominant force in the global lithium market, producing more than 40,000 metric tons annually and refining the majority of global supply into battery-grade material.
Australia and Chile lead global mining output, but Washington views the Thacker Pass project as crucial to diversifying supply and strengthening energy security.
The US currently produces less than 5,000 metric tons annually, highlighting the potential impact of the Nevada mine.
Analysts say US involvement through equity stakes could accelerate investment and provide stability in a sector where supply security is increasingly tied to geopolitical strategy.
While Lithium Americas reported a widening net loss in the second quarter, the latest development suggests government backing could alter the company’s outlook and cement its role in America’s critical minerals future.
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