Shares of Lithium Miner Pop as 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

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• Lithium Americas’ stock nearly doubled after news of potential U.S. government equity stake negotiations in a Nevada mine.
• The U.S. government is negotiating an equity stake to renegotiate a $2.3 billion Energy Department loan.
• Shares of Lithium Americas rose 98.7% to $6.10 in after-hours trading.

The stock of miner Lithium Americas , which is developing a lithium deposit in Nevada to supply the critical mineral for batteries, rose sharply on news that the U.S. government is in negotiations to take a stake in the 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. “This is a great critical minerals deal,” a Trump administration official told Barron’s while declining to provide the exact share of the company that the government is seeking. “It’s a small stake,” the official said, adding that negotiations are ongoing.

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

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

Shares of Lithium Americas rose 67% to $5.13 in premarket trading Wednesday. Coming into the trading session, the stock had risen around 3% for the year and 25% over the past 52 weeks.

Lithium producer Albemarle also gained 5.3% to $84.34 in premarket trading.

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

GM shares rose 2.9% to $60.29 in premarket trading Wednesday.

The U.S. has recently announced stakes in companies, including 10% in Intel, which it secured by converting a grant issued during the Biden administration into an equity stake. In July, it 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 from both domestic and international companies.

The 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