Quick Read
- Lithium Americas stock nearly doubled after reports of US government seeking up to a 10% equity stake.
- The Trump administration is negotiating for direct ownership as part of a $2.3 billion federal loan for Thacker Pass.
- Thacker Pass is projected to be the largest lithium source in the Western Hemisphere, with production set for 2028.
- GM holds a 38% stake in the project, securing long-term lithium supply rights.
- The US aims to reduce dependence on China, which refines over 75% of global lithium.
Trump Administration Eyes Direct Stake in Lithium Americas
On an otherwise ordinary trading day, Lithium Americas Corp. (NYSE: LAC) found itself at the heart of a seismic shift in US industrial strategy. Shares in the Canadian miner soared by nearly 100% after Reuters revealed that the Trump administration is negotiating for a 10% equity stake in the company’s flagship Thacker Pass lithium project in Nevada. This move, unprecedented in the US lithium sector, signals a decisive turn in Washington’s approach to securing critical minerals for the clean energy transition.
Thacker Pass: The Centerpiece of America’s Lithium Ambitions
Thacker Pass is not just another mine. Situated in Humboldt County, Nevada, it’s poised to become the largest source of lithium in the Western Hemisphere when it opens in 2028. The mine is designed to produce 40,000 tonnes of battery-grade lithium carbonate annually in its first phase—enough to power up to 800,000 electric vehicles each year. With the world’s largest measured lithium resource under its belt, the project is at the very core of America’s bid to build a homegrown EV battery supply chain and reduce reliance on overseas suppliers, especially China.
The project’s impact isn’t limited to raw numbers. Construction has already created 1,800 jobs, and 360 permanent positions will remain once the mine is operational. These are not just statistics—they represent new opportunities and economic lifelines for rural Nevada communities often left behind by broader economic trends, a point repeatedly emphasized by both the Biden and Trump administrations.
Strategic Stakes: Why the US Wants a Piece of Lithium Americas
The backdrop to this bold federal move is the US Department of Energy’s $2.3 billion loan to Lithium Americas, one of the largest federal investments ever made in domestic lithium production. The loan, approved in October 2024, reflects the government’s determination to catalyze a domestic lithium industry capable of supporting the nation’s electrification ambitions.
But with lithium prices slumping due to global oversupply—particularly from China—concerns have mounted in Washington about the company’s ability to repay its loan. The Trump administration’s answer? Insist on equity warrants that could grant the government 5-10% ownership in Lithium Americas, stronger guarantees from General Motors (GM)—which already holds a 38% stake and long-term supply rights—and more direct federal oversight of the project’s operations.
As one White House official put it to Reuters, “President Trump supports this project. He wants it to succeed and also be fair to taxpayers. But there’s no such thing as free money.”
Market Reaction: A Stock Rally and a Message to Investors
The market’s response was immediate and dramatic. Lithium Americas’ shares, which closed at $3.07, exploded in pre-market trading to $5.23—a 71% jump—before surging even higher to $6.30 intraday. The company’s market capitalization leapt to $1.39 billion, underscoring the transformative power of direct government involvement in a sector often viewed as risky and capital-intensive.
Other US lithium developers, including ioneer, Standard Lithium, and even energy giant Exxon Mobil, watched closely. If Washington pursues similar equity arrangements across the sector, the rules for project financing and ownership could change overnight. The era of passive government support may be giving way to one where the US claims a direct stake in the resources that underpin its technological and defense infrastructure.
Why Thacker Pass—and Why Now?
The timing of the Trump administration’s push for an equity stake is no accident. Currently, the US produces less than 1% of the world’s lithium, with nearly all battery-grade lithium processed in China. According to the US Geological Survey, American reserves are significant—about 1.8 million tonnes—but the infrastructure to extract and refine these resources has lagged far behind global leaders like Australia and Chile. With critical minerals now seen as the new oil, securing a domestic supply has become a matter of economic security and national defense.
China’s grip on lithium refining—handling more than 75% of global output—means that minerals mined on one continent often travel over 50,000 miles before ending up in a US-made battery. This not only exposes the US to geopolitical risk but also undermines efforts to lower the carbon footprint of electric vehicles.
GM, Government, and the Road Ahead
For GM, Thacker Pass is a strategic lifeline. The automaker’s $625 million investment last year secured access to all lithium from the project’s first phase and a portion from the second, for up to 20 years. But Trump officials now want GM to guarantee those purchases, even if market conditions worsen—a move designed to further de-risk the project and protect taxpayer funds.
Analysts such as Seth Goldstein from Morningstar note that government equity, coupled with long-term purchase agreements, could insulate Thacker Pass from volatile lithium prices. This model, already seen in the Department of Defense’s partnership with rare earths producer MP Materials, is gaining favor as a way to strengthen funding for strategic projects—even if it means diluting existing shareholders.
From Loan Guarantees to Resource Nationalism
The Trump administration’s approach is about more than loan guarantees. It’s about securing upside for taxpayers if lithium prices rebound, and ensuring the US has a seat at the table when it comes to controlling vital mineral resources. Clauses in the existing loan agreement already allow Washington to seize control of Thacker Pass if the project faces significant delays or overruns, highlighting how seriously the government views its role as a steward of strategic assets.
Jefferies analysts told Al Jazeera that equity stakes are often politically easier to justify than tax increases, and can deliver both financial and strategic returns. The shift toward direct government ownership, once unthinkable in the US mining sector, is now being tested in real time at Thacker Pass.
A Turning Point for America’s Clean Energy Future
As the dust settles, one thing is clear: The US is no longer content to sit on the sidelines of the global minerals race. By seeking a stake in Lithium Americas, the Trump administration is signaling a new era of resource nationalism—one that could redraw the map for how America finances and controls its most critical raw materials.
For investors, the message is equally stark. Government involvement can both unlock massive upside and introduce new layers of complexity, from political risk to potential shareholder dilution. But with global lithium prices hovering around $9,165 per tonne for battery-grade carbonate, and demand set to surge as EV adoption accelerates, the stakes have never been higher.
In the end, the federal government’s move to claim equity in Lithium Americas is more than a financial transaction—it’s a declaration of intent. The US is ready to compete for the minerals that will define the next industrial era, and Thacker Pass is ground zero for this high-stakes contest. Whether this model becomes the norm or remains an exception will depend on the balance between strategic security, market forces, and the public’s appetite for government intervention in the economy.