Lithium Americas stock jumps 100% as US government mulls equity stake, loan for Thacker Pass

The stock of Lithium Americas hit an all-time session high of over 100 per cent on Wednesday, reported CNBC. The stock's doubling was noted a day after it was reported that the Donald Trump administration is seeking an equity stake in this Vancouver-based company.

Reuters first reported the Trump administration's proposal. It suggested that the White House is eyeing an equity stake in Lithium Americas, which is renegotiating terms of a $2.26 billion loan from the Department of Energy for the development of the Thacker Pass mine in Nevada.

An official of the Trump administration revealed to CNBC that the deal has not been finalized yet. However, the White House is positive about the discussions.

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Lithium Americas' stock doubles

Following this development, the stock doubled on Wednesday, reaching $6.23. On Tuesday, the market closed at $3.07 for the company, which has a market cap of about $1.5 billion.

Lithium Americas is a mining company based in Vancouver, British Columbia. The Canadian company trades on both the Toronto Stock Exchange and the NYSE, reported CNBC. It is working on the Thacker Pass in northern Nevada, which is expected to become one of the largest sources of lithium in North America.

The project will be taken over by Lithium Americas and General Motors in a shared partnership. The first phase of the project could start by late 2027. Lithium Americas controls a 62 per cent stake and operates the mine, while GM holds a 38 per cent stake and has agreed to buy offtake from the mine when it is operational.

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Why is the potential deal important?

Lithium is a critical material for electric vehicle batteries and an important mineral for EVs, which are gradually becoming a critical alternative to fuel-based vehicles, especially in the US.

The report also suggested that the Trump administration has been showing interest in taking direct ownership in the mineral supply chain, as it is critical to US interests. However, Lithium Americas would mark the White House’s first such investment in a Canadian company.

Earlier in July, the Department of Defense (now known as the Department of War) took a 15 per cent equity stake in rare earth miner MP Materials. Since the deal, shares of the Las Vegas-based company have more than doubled.

FAQs

1. Where is Lithium Americas based?

Lithium Americas is in Vancouver, British Columbia, in Canada.

2. Why is the Trump administration seeking interest in the equity stake of Lithium Americas?

The mining company produces lithium, which is a critical mineral for EV batteries.

3. Has the deal between the Trump administration and Lithium Americas been finalized?

The deal between the Trump administration and Lithium Americas has not been finalized yet. However, the US government is positive about the discussions.