Lithium Americas Shares Surge with U.S. Government 5 Percent Stake

The U.S. government is making a significant move to balance its lithium supply landscape by acquiring a 5% equity stake in Lithium Americas (NYSE: LAC), the Canadian mining company developing one of the largest lithium deposits in the United States. This action, announced yesterday, follows a broader strategic push by the current administration to reduce American dependence on Chinese lithium sources and secure critical supply chains for emerging technologies. 

Lithium is a key ingredient in batteries that power smartphones, electric vehicles (EVs), and renewable energy storage systems. China currently dominates the global lithium market, controlling roughly 75% of battery cell manufacturing capacity and a majority share of processing capabilities. This dominance has become a concern for U.S. policymakers, particularly because access to lithium is not only an economic matter but increasingly one of national security. The U.S. military requires specialized, high-quality batteries that are difficult to source if reliant on Chinese supply chains, which have been shaped in part by aggressive state subsidies and market interventions. 

The stake acquisition is focused not only on Lithium Americas but also on its flagship project, the Thacker Pass lithium mine in northern Nevada. The Department of Energy’s (DOE) 5% investment extends to this joint venture between Lithium Americas and General Motors, which holds a 38% interest and the rights to buy lithium produced in the initial project phase. The Thacker Pass site is expected to eventually produce about 40,000 metric tons of battery-grade lithium carbonate annually, enough to supply roughly 800,000 EVs. This scale positions Thacker Pass as central to the U.S. goal of establishing a reliable domestic lithium supply chain and closing the production gap with China. 

The financial terms of the deal were not fully disclosed, but Lithium Americas confirmed the DOE had agreed to start the first $435 million draw from a previously announced $2.26 billion federal loan supporting the mine’s development. The broader loan restructuring and equity investment signal heightened government involvement in the critical minerals sector, highlighting the strategic importance of lithium mining to American industrial and security interests. 

Investors responded sharply to the news. Shares of Lithium Americas surged more than 30% on the market open, building on a recent rally where the company’s stock nearly doubled after rumors emerged about government interest. This significant price move reflected growing confidence that Thacker Pass will become a linchpin for the electric vehicle supply chain and a tangible counterweight to Chinese market control. The company’s expanded partnership with the U.S. government also represents part of an unusual pattern under this administration, which recently acquired sizable stakes in other critical technology companies, including Intel and rare earths miner MP Materials, both considered vital to America’s industrial base and national security. 

The Biden administration’s energy secretary Chris Wright described the stake acquisition as a strategic contribution to reducing reliance on foreign adversaries for essential minerals while promoting responsible stewardship of American taxpayer resources. This move reflects lawmakers’ bipartisan understanding of the need to strengthen domestic mineral production without conceding critical supply chains to external geopolitical rivals. 

Lithium Americas, which is still early in revenue generation, has been focused on developing its projects rather than producing lithium at scale. The government’s investment will help accelerate Thacker Pass’s timeline, targeted to become operational by 2028, enabling North America to produce a significant portion of its lithium needs domestically. With the EV market expanding fast globally, and with lithium prices steady, securing supply through projects like Thacker Pass is increasingly vital for manufacturers and policymakers alike. 

While there are questions about the financial and operational risks still ahead for Lithium Americas, the government’s stake signals a strong vote of confidence in the company’s assets and alignment with national industrial interests. This partnership sets a precedent for public-private collaborations focused on critical minerals and may inspire further strategic investments aimed at boosting U.S. competitiveness against China’s state-backed mining and processing giants.