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Shares of Canadian mining company Lithium Americas Corp. doubled Wednesday following reports that the Trump administration is negotiating for an equity stake in the firm as part of a broader strategy to secure critical mineral supply chains.
The potential investment emerged during renegotiations of a $2.2 billion Department of Energy loan for Lithium Americas' Thacker Pass project in northern Nevada, according to a Trump administration official who spoke to CNBC. The facility is expected to become one of North America's largest lithium sources when its first phase begins operations in late 2027.
The proposed deal would mark the first time the U.S. government has sought an equity position in a Canadian mining corporation, underscoring the strategic importance of lithium in the global transition to electric vehicles and renewable energy storage.
Lithium Americas and partner General Motors failed to meet initial loan requirements, prompting discussions with the Energy Department about restructuring payment schedules. During these talks, the White House floated the equity stake proposal, the official said.
"The Trump administration is supportive of the project and negotiations are progressing well," the official noted, though no final agreement has been reached. Any investment would likely require approval from Canadian regulators given the company's jurisdiction.
The move follows a similar pattern established last July when the Department of Defense acquired a 15% stake in MP Materials, a Las Vegas-based rare earth mining company. MP Materials' stock has more than doubled since that transaction.
Interior Secretary Doug Burgum signaled this approach in April, revealing the administration was considering equity investments in mining companies to help them compete against Chinese state-backed rivals that dominate global mineral processing.
The Thacker Pass project represents a critical component of U.S. efforts to reduce dependence on Chinese-controlled lithium supply chains. China currently processes about 60% of the world's lithium despite holding only a fraction of global reserves.
For Lithium Americas, the government backing could provide crucial financial stability for the massive Nevada operation, which has faced permitting challenges and environmental opposition from local tribal groups. The stock surge reflects investor confidence that federal support will help advance the project through its development phase and into commercial production by the decade's end.
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