Lithium Miner Stock Doubles After U.S. Proposes Equity Stake

The clay mixture from which lithium will be extracted by Lithium Americas Corp. at the company’s facility in Nevada. (Carolyn Cole /Los Angeles Times / Getty Images)

Key Points

About This Summary

• Lithium Americas’ stock nearly doubled after news of potential U.S. government equity stake negotiations in a Nevada mine.
• The U.S. government proposed an equity stake to renegotiate a $2.3 billion Energy Department loan.
• Shares of Lithium Americas rose 98%.

The stock of miner Lithium Americas , which is developing a lithium deposit in Nevada to supply the critical mineral for batteries, nearly doubled Wednesday morning on news that the U.S. government is in negotiations to take a stake in the Canadian mining company.

The U.S. proposed an equity stake as a way to renegotiate a $2.3 billion Energy Department loan granted during the Biden administration. The proposal came after the miner said it would be unable to meet requirements to receive the first loan installment, a Trump administration official told Barron’s.

“This is a great critical minerals deal,” the official told Barron’s while declining to provide the exact share of the company that the government is seeking. “We all want the project to move forward. We just want to do so in a way that’s fair to taxpayers.”

Created with Highcharts 9.0.1Lithium AmericasStock ticker: LACSource: FactSetAs of Sept. 24

Created with Highcharts 9.0.12025Sept.2.22.42.62.83.03.23.4$3.6

Reuters reported that the U.S. government was considering a stake in the company of as much as 10%.

Lithium Americas said that it is “in active discussions with the DOE and our partner, GM.”

Shares of Lithium Americas rose as much as 98% to $6.09 around 10 a.m. Eastern Time on Wednesday. They have nearly doubled for the year and are up more than 140% over the past 52 weeks.

Lithium producer Albemarle also gained 3.3% to $82.78.

Lithium Americas announced in December that it had entered into a joint venture with General Motors in which the Canada-based company owns 62% of the project known as Thacker Pass in Humboldt County, Nevada, while GM owns the rest. The mine is expected to be operational by 2028.

GM shares rose 2.2% to $59.90 on Wednesday.

The U.S. has recently announced stakes in companies doing business in strategic industries. Those investments include 10% in Intel, which it secured by converting a grant issued during the Biden administration into an equity stake. In July, the U.S. invested $400 million in rare earth miner MP Materials .

The news comes as the Trump administration aims to boost manufacturing in the U.S. through increased investment both from domestic businesses and international companies.

That effort hit a speed bump earlier this month, when an electric vehicle battery factory being developed in Georgia by Hyundai and LG Energy Solution halted construction following an immigration raid. Hyundai said the raid will slow the plant’s opening by a few months.

Write to Anita Hamilton at anita.hamilton@barrons.com and Elsa Ohlen at elsa.ohlen@barrons.com