Lithium Americas experienced a significant surge in its stock price on Wednesday, with shares doubling as the Trump administration expressed interest in acquiring an equity stake in the mining company. Based in Vancouver, British Columbia, Lithium Americas is currently negotiating the terms of a substantial $2.2 billion loan from the Department of Energy for its Thacker Pass mine located in Nevada. This information was disclosed by a Trump administration official to CNBC.
The proposal for an equity stake was first reported by Reuters. Following this news, Lithium Americas' stock reached a session high of $6.23, marking an increase of over 100% from Tuesday's closing price of $3.07. With a market capitalization of approximately $1.5 billion, the company's stock performance reflects growing investor interest and confidence in its future prospects.
This move by the White House signifies a broader strategy to secure direct ownership in the mineral supply chain, which is deemed critical to U.S. interests. Notably, this is the first time an equity stake has been proposed for a Canadian company, highlighting the increasing importance of lithium in the current economic landscape.
Lithium Americas is publicly traded on both the Toronto Stock Exchange and the New York Stock Exchange (NYSE), but it is incorporated and domiciled in Canada. This unique position may necessitate additional regulatory approval from Canadian authorities regarding the proposed equity stake.
The Thacker Pass project in northern Nevada is projected to become one of North America's largest sources of lithium, with the initial phase expected to commence operations in late 2027. The venture is a collaboration between Lithium Americas and General Motors (GM), where Lithium Americas retains a 62% ownership stake and oversees the mine's operations. GM holds a 38% stake and has committed to purchasing lithium offtake from the mine once it becomes operational.
Due to unmet conditions for the initial disbursement of the loan, both Lithium Americas and GM have had to renegotiate the loan terms for Thacker Pass. According to the Trump administration official, the companies requested to extend certain loan repayment timelines into the future. This adjustment is seen as a necessary step to create a cash buffer and alleviate some risks for taxpayers.
While a formal deal has yet to be finalized, the Trump administration remains supportive of the Thacker Pass project, and discussions are reportedly progressing positively. It's important to note that any investment by the U.S. government may require additional approvals from Canadian regulators due to the company's jurisdiction.
Lithium Americas confirmed on Wednesday that it is actively engaged in discussions with the Energy Department and GM regarding the loan for the Thacker Pass project. However, GM declined to provide any comments on the matter when approached by CNBC.
