TLDR
- Department of Energy acquired 5% of Lithium Americas and 5% of the Thacker Pass joint venture with General Motors
- LAC stock surged 30% in premarket trading after finalizing $435 million draw from $2.26 billion government loan
- Deal includes over $100 million in new equity as government shifts from lending to ownership model
- Thacker Pass will produce 40,000 metric tons of lithium annually, enough for 800,000 electric vehicles
- Stock already up 91% over past month on speculation about government stake
Lithium Americas stock rocketed 30% higher Wednesday morning after revealing a restructured deal with the federal government. The Department of Energy now owns 5% of the company and 5% of its Thacker Pass joint venture.
The Vancouver-based miner confirmed it secured the first $435 million draw from a $2.26 billion government loan. This money will fund development of the Nevada lithium mine.
LAC shares were trading at $7.53 in premarket activity. The stock had already climbed 91% over the previous month as news of potential government involvement circulated.
New Government Investment Strategy
The Trump administration has been taking equity positions in companies it considers critical to national security. Recent deals include stakes in Intel and MP Materials.
The revised Lithium Americas agreement includes more than $100 million in new equity. Energy Department officials stated the changes protect taxpayer interests.
Washington initially wanted General Motors to guarantee lithium purchases regardless of market conditions. GM rejected that demand. The automaker invested $625 million last year for a 38% stake in Thacker Pass.
The GM Partnership
General Motors now has rights to buy all lithium from the first production phase. It can also purchase a portion from the second phase for 20 years.
The automaker will allow the project to sign additional sales agreements with other buyers. These contracts will cover volumes GM doesn’t purchase.
CEO Jonathan Evans said the partnership strengthens America’s supply chain. The company currently has no revenue since Thacker Pass isn’t producing yet.
Thacker Pass Production Plans
The Nevada mine is set to become the largest lithium source in the Western Hemisphere. First-phase production targets 40,000 metric tons of battery-quality lithium carbonate per year.
That volume can supply batteries for up to 800,000 electric vehicles annually. Both political parties have supported the project as key to reducing Chinese dependence.
China processes more than 75% of global lithium into battery-grade material. The country produces over 40,000 metric tons annually and dominates the refining sector.
The United States currently produces less than 5,000 metric tons yearly. Albemarle operates the only active U.S. lithium facility in Nevada.
Thacker Pass aims to dramatically increase domestic production capacity. Development continues with the newly released federal funding in place.
The government’s approach represents a strategy shift. Rather than simply collecting loan interest, Washington now seeks equity returns while supporting domestic mineral production.
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