The U.S. government has acquired a minority ownership stake in Lithium Americas, a company developing a major lithium mine in northern Nevada. The Department of Energy will hold a five per cent equity stake in the Vancouver-based mining company and in the Thacker Pass lithium mining project, a collaboration with General Motors. Following this news, Lithium Americas’ stock surged by over 33% before the market opened on Wednesday.
Energy Secretary Chris Wright highlighted that this partnership with Lithium Americas will enhance domestic supply chains, reduce reliance on foreign sources for critical minerals, and ensure prudent utilization of taxpayer funds. The Thacker Pass project plays a vital role in decreasing the U.S.’ dependence on China for lithium, a crucial element in the production of batteries for cellphones, electric vehicles, and renewable energy systems. Both political parties support the initiative, aiming to bridge the production gap as China currently dominates the global lithium processing industry.
Initial estimates project that the Thacker Pass project will yield 40,000 metric tons of high-quality lithium carbonate annually, sufficient to power approximately 800,000 electric vehicles. This strategic move by the U.S. government to secure an ownership stake in Lithium Americas is part of a broader trend of direct involvement with private enterprises, exemplified by recent actions such as acquiring stakes in Intel, MP Materials, and making revenue-sharing agreements with Nvidia and AMD.
Lithium Americas announced a preliminary agreement with the Department of Energy to access the first installment of a $435 million federal loan, with the government deferring $182 million of debt service over the loan’s initial five years. This agreement follows successful negotiations between the White House and Canada’s Lithium Americas, paving the way for the extraction of lithium from the Thacker Pass project, which has the capacity to support the production of one million electric vehicles annually. GM has committed over $900 million to support the development at Thacker Pass.
Industry analyst Dan Ives from Wedbush emphasized that the Thacker Pass project presents a significant opportunity for the U.S. to decrease its reliance on foreign sources, particularly China, for lithium. He noted that despite holding substantial lithium reserves, the U.S. currently contributes less than one per cent to the global lithium supply. This collaboration is expected to enhance domestic supply chains, reduce dependence on foreign adversaries for critical minerals, and ensure responsible management of American taxpayer funds as lithium production expands in the years ahead.