The U.S. Department of Energy has acquired equity interests with Canadian company Lithium Americas and its Nevada Mining joint venture, and General Motors, as part of a renegotiation of federal loans.
Under the new terms, the US government will have 5% ownership of stakes in Lithium America and 5% ownership in a joint venture of Lithium American GM. Stocks are acquired through a non-cost warrant, a financial instrument that grants the government the right to purchase shares at a set price. The new terms came from renegotiations with DOE’s loan program office over the $2.26 billion loan awarded to Lithium America under the Biden administration.
Lithium Americas shares surged 34% in after-hours trading.
The DOE said the stock interests serve as additional collateral for the loan and helps reduce taxpayers’ repayment risk. Lithium is an important chemical element used in electric vehicles and smartphone batteries.
“Even though we have some of the largest deposits, the US produces less than 1% of its global supply of lithium. Thanks to President Trump’s bold leadership, US lithium production will skyrocket.” “Today’s announcement will help reduce dependence on important minerals on foreign enemies and ensure better management of the US taxpayer dollars by strengthening the domestic supply chain. President Trump has committed to doing both and he is delivering.”
Tuesday’s announcement is the latest action by the Trump administration to gain ownership of the company. The Trump administration has announced plans to acquire a 10% stake in Intel and MP Materials, which operate rare earth mineral mines in the United States.
Lithium America is developing a soccer pass mine in Nevada. This is expected to produce enough lithium to make as many as 800,000 electric vehicles a year in the first phase. President Trump approved the project’s permission in January 2021 at the end of his first term.
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Last year, GM purchased a 38% stake in Lithium America for $625 million. This gave the car manufacturer the right to purchase the entire first stage of production, and in the second stage the right to purchase lithium from the mine for 20 years. In total, it will be 1.6 million eV of lithium over the next 20 years.
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