Lithium Americas shares double as US is said to seek stake

Lithium Americas Corp. shares soared to the highest price since April 2024 on Wednesday after reports the Trump administration is pursuing a stake in the company.

The White House proposed taking equity in the Canadian lithium company during a renegotiation of the terms of a $2.3 billion loan extended by the Energy Department, Bloomberg News reported Tuesday. That followed an earlier Reuters report that the administration was seeking a stake of as much as 10%.

Lithium Americas share price doubled in New York, hitting a high of $6.21 as of 10:38 a.m. in New York, marking its biggest intraday increase since mid-April 2024. Other lithium producers including Albemarle Corp. and Sigma Lithium Corp. also climbed. A 10% stake in the Vancouver-based company would be worth around $150 million, based on Wednesday’s share price.

Taking an equity stake in Lithium Americas would be the latest example of the Trump administration intervening in the U.S. economy in a bid to speed up development of local supply chains in critical minerals. The company is behind the Thacker Pass project in Nevada, which is touted to become a major lithium source in a domestic industry that produces only small amounts of the battery metal.

Responding to the media reports, Lithium Americas said in a statement that it’s in discussions with the Energy Department and joint-venture partner General Motors Holdings LLC over “potential further conditions” relating to the first drawdown of the loan.

The funding was extended during the Biden administration for development of Thacker Pass and the project may need to be mothballed if a deal to renegotiate the terms of the package isn’t secured.

“The incentive for taking equity stakes seems significantly higher than withdrawing funding,” Jefferies analyst Laurence Alexander said in an emailed note.