TLDR
- Lithium Americas surges as U.S. secures stake in Thacker Pass lithium mine.
- DOE grabs 5% stake in Lithium Americas, fueling EV supply chain ambitions.
- Lithium Americas jumps 23% after U.S. invests in Thacker Pass project.
- Thacker Pass wins federal backing with DOE stake and $2.26B loan approval.
- Lithium Americas, GM, and U.S. unite to secure critical lithium supply.
Lithium Americas Corp. experienced a sharp stock rise of 23.29%, closing Wednesday at $7.04. This spike followed news that the U.S. Department of Energy acquired a 5% stake in the company and its Thacker Pass lithium joint venture. The after-hours session saw a minor dip, with shares settling at $6.95.
The equity acquisition was finalized through the issuance of penny-priced warrants, enabling the U.S. to obtain the shares at a minimal cost. This strategic move aligns with broader efforts to secure domestic supplies of critical minerals. It also reflects the government’s increasing involvement in resource sectors essential for energy independence and national security.
The Energy Department’s action complements ongoing federal investments, including a $2.26 billion loan to support development at the Nevada-based Thacker Pass mine. This mine is expected to be the largest lithium resource in the Western Hemisphere upon its operational commencement in 2028. The company confirmed the first $435 million loan draw is now approved.
Thacker Pass Secures Critical Federal Backing
The Thacker Pass project has gained momentum with both financial and political support. The federal loan, previously announced, now enables Lithium Americas to scale development at its Nevada facility. Moreover, bipartisan political backing underlines the mine’s strategic importance to the U.S. supply chain.
The project is a joint venture with General Motors, which holds a 38% stake and has rights to a significant portion of the future lithium output. GM committed $625 million last year, securing exclusive access to Phase 1 production and partial access to Phase 2 for a period of two decades. However, it declined a government request to guarantee purchases regardless of market conditions.
Despite the negotiation hurdles, the deal proceeded with GM’s approval, allowing lithium sales to other buyers. In parallel, Lithium Americas agreed to fund a $120 million loan reserve account within 12 months of the initial loan draw. These terms highlight the company’s alignment with long-term federal strategic goals.
Geopolitical Implications and Canada’s Review
Canadian authorities will review the deal under the Investment Canada Act. The government confirmed it will assess the acquisition to determine its benefit to the national economy. This is a standard process for foreign investments in critical minerals.
Canada emphasized that such reviews are conducted with the national interest in mind. While generally welcoming foreign investment, the country aims to protect and promote its strategic sectors. Lithium, being vital to clean energy technologies, is subject to added scrutiny.
U.S. officials have framed the deal as a move to reduce dependence on Chinese lithium. With China controlling much of global lithium refining, the Thacker Pass project plays a key role in diversifying U.S. supply chains. This initiative also supports North American electric vehicle manufacturing ambitions.
