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Key Takeaways
- Shares of Lithium Americas soared following a report that the U.S. may take up to a 10% stake in the firm.
- The lithium mine developer is working with General Motors to build the Thacker Pass mine in Nevada to boost domestic production of the metal used in rechargeable batteries.
Lithium Americas (LAC) shares skyrocketed Wednesday after a report that the Trump administration is looking to take as much as a 10% stake in the lithium project developer.
The company’s stock was recently up more than 90%. Shares of General Motors (GM), which is partnering with Lithium Americas to build the Thacker Pass mine in Nevada, also gained.
Reuters quoted a White House spokesperson as saying President Donald Trump supports the project, which is seen as key to boosting domestic lithium production. The mineral is an important component of rechargeable batteries, and U.S. officials have expressed concern about China being the major supplier.
Why This Matters to Investors
Predicting the Trump administration’s next moves regarding acquiring stakes in companies can be difficult. A deal involving Lithium Americas would mark the latest such move, following others with companies including Intel and MP Materials—and today’s move in the company’s stock illustrates how investors are looking to get ahead of official announcements if they can.
Thacker Pass, expected to open in 2028, is expected to be the largest supplier of lithium in the Western Hemisphere.
The Department of Energy approved a $2.26 billion loan to develop Thacker Pass at the end of the Biden administration. Reuters said Lithium Americas was scheduled to take the first tranche earlier this month, but Trump officials moved to renegotiate the agreement over fears the company wouldn’t be able to repay the money because of low lithium prices.
The administration has already invested in other companies it sees as critical to U.S. national security, notably Intel (INTC) and MP Materials (MP).
Lithium Americas is in discussions with the Department of Energy and General Motors “regarding first draw on the DOE Loan,” the company said in a statement.
Shares of Lithium Americas were up about 3% year-to-date ahead of Wednesday’s session.
