Lithium Americas soars on report Trump administration seeking equity stake

U.S.-listed shares of Lithium Americas surged more than 70% before the bell on Wednesday after a report said the Trump administration is seeking up to a 10% stake in the miner, the latest sign of Washington's push into industries deemed critical to national security.

 

Reuters reported late on Tuesday, citing two people familiar with the discussions, that the administration was discussing taking the stake in the company as part of talks to renegotiate a $2.26 billion government loan for its Thacker Pass lithium mine.

Lithium Americas said on Wednesday it was in discussions with the U.S. Department of Energy and General Motors over the Thacker Pass loan. 

The move underscores President Donald Trump's increasing use of direct government ownership to steer strategic sectors and curb reliance on China, which dominates refining of many critical minerals. 

TD Cowen analysts said a government stake would lend credence to project completion and expansion to multiple phases with perhaps enhanced economics. 

The Trump administration recently moved to take a stake in chipmaker Intel following a deal that would make the Department of Defense the largest shareholder in rare earths MP Materials. 

Jefferies said that the administration's preference for equity stakes, viewed as lower political cost than tax increases, can support financing, corporate profits, and favorable returns on invested capital. 

GM, which invested $625 million in the mine last year for a 38% stake, has the right to buy all of the project's lithium from its first phase and a portion from the second phase for 20 years, although Trump officials are now seeking a guarantee that GM will buy the metal, according to the sources. 

Morningstar analyst Seth Goldstein said an equity stake could include offtake price guarantees, potentially making Thacker Pass profitable even if lithium prices remain lower for longer. 

The Thacker Pass project is expected to begin production in 2028 and serve as a cornerstone of U.S. efforts to secure a domestic supply chain for electric vehicle batteries. 

The news also lifted other lithium miners in premarket trading. Albemarle gained 4.1% while Sigma Lithium climbed 6.6%. U.S.-listed shares of SQM rose 2.5% in light volumes.