The Thacker Pass lithium mine is constructed near Orovada, Nev. Last year, the Biden administration agreed to provide a $2.26-billion conditional loan to Lithium Americas to help cover its construction costs.Rick Bowmer/The Associated Press
The U.S. government has been granted an equity stake in Lithium Americas Corp. LAC-T, and a share in its U.S. lithium mine, as part of a renegotiation of a financing package previously agreed upon with the Biden administration.
Vancouver-based Lithium Americas is building a massive new lithium mine in Nevada that over time should help wean the U.S. off of China for one of the key minerals used in low carbon energy. The Asian superpower is among the world’s biggest miners of lithium and it has a commanding share on the refining side of the business as well.
The Donald Trump administration in recent months has essentially become an activist investor akin to a private equity company in its negotiations with private enterprise. No longer content with advancing loans, the U.S. government is demanding equity stakes in companies in its negotiations. As part of that activist approach, the U.S. government has recently taken stakes in chip maker Intel Corp. INTC-Q and rare earth company MP Materials Corp. MP-N
Lithium Americas in late 2024 announced it had secured US$2.26-billion in loans from the Biden administration to build its Thacker Pass mine in Nevada. But in recent months, as the company was attempting to draw on that loan, the Trump administration took a second look and ultimately ended up obtaining both a 5-per-cent equity position in the company and a 5-per-cent stake in the mine itself.
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U.S. Energy Secretary Chris Wright in a release said that the government’s stake in Lithium Americas “helps reduce our dependence on foreign adversaries for critical minerals by strengthening domestic supply chains and ensures better stewardship of American taxpayer dollars.”
Currently, the U.S. produces less than 1 per cent of global lithium production, although it has sizable reserves that have not yet been tapped.
The first phase of Lithium America’s Thacker Pass project is projected to produce up to 40,000 tonnes a year of lithium carbonate, a level that would bump up U.S. output close to China’s and Chile’s, two of the biggest producers.
Lithium Americas in a release said that the deal with the Trump administration allows it to draw down an initial US$435-million on the government loan and it has obtained a deferral on US$182-million of debt service over the first five years of the loan.
The U.S. will be issued warrants that allow it to buy shares in Lithium Americas for $0.01 a share, a level that makes them essentially free. Before the deal was announced, Lithium America shares closed at US$5.71 a share on the Nasdaq.
Shares in the company rose by 20 per cent in early trading on the Nasdaq on Wednesday.