Lithium Americas (LAC) stock soared in premarket trading Wednesday morning, gaining more than 90% after news reports that the Trump administration is looking to take a stake in the operator of what is set to be the largest lithium mine in the country.
On Tuesday evening, Reuters reported that the administration is seeking a stake of up to 10% in Vancouver, British Columbia-based Lithium Americas as part of renegotiations for a $2.26 billion loan the company received from the Department of Energy for its Thacker Pass lithium mine.
The report sent shares in Lithium Americas rocketing upward Wednesday morning. Shares in General Motors (GM), which owns a 38% stake in the project, traded up a bit over 2% in morning trading on Wednesday.
Under the terms of the prospective Lithium Americas deal, the mining company has offered the administration no-cost warrants on up to 10% of the company’s common shares. The administration is also reported to be seeking purchase guarantees from General Motors, which has $625 million in the project.
The original loan includes terms that allow the administration to seize control of the project if it is delayed or faces major cost overruns, according to Reuters.
Read more about Lithium Americas’ stock moves and today’s market action
The proposed mining project in Nevada would be the largest lithium mining project in the Western Hemisphere, producing more than 40,000 metric tons of lithium carbonate in its first phase, set to begin in 2028 — enough of the metal byproduct to construct 800,000 electric vehicles, according to Reuters.
Albemarle’s (ALB) Silver Peak project in Nevada, the only operating lithium mine in the US right now, produces less than 5,000 metric tons of the metal per year.
The administration has consistently considered lithium production as a key area in building out domestic supply chains for valuable metals and other commodities like copper and uranium. China produces more than 40,000 metric tons per year of the metal, making it the world’s third-largest lithium producer, behind only Australia and Chile.
Lithium must be refined after the raw metal is removed from the ground to build products like EV batteries. China currently refines 65% or more of the world’s lithium, compared to the less than 3% share in the US.
The Trump administration’s interest in a stake in Lithium Americas mirrors similar moves for stakes in mining company MP Materials (MP) and chipmaking giant Intel (INTC), as the federal government looks to strengthen its position in both domestic production and global supply chains.
