US government to take 5% stake in Lithium Americas and joint venture with GM, source says

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By Ernest Scheyder

(Reuters) -The U.S. Department of Energy will take a 5% stake in Lithium Americas and a separate 5% stake in the company’s Thacker Pass lithium mine joint venture with General Motors, a source familiar with negotiations said.

Shares of Vancouver-based Lithium Americas listed in New York rose 34% in after-hours trading on Wednesday after the stake negotiations were finalized.

It will be the latest private sector investment by President Donald Trump’s administration after recent stakes in Intel and MP Materials <MP.N>, seeking to boost industries seen as vital to U.S. national security.

Last week, Reuters reported that administration officials were in discussions with Lithium Americas about an equity stake as they renegotiated terms of a $2.26 billion government loan for the mine, slated to become the largest source of the battery metal lithium in the Western Hemisphere.

Representatives for Lithium Americas and GM were not immediately available to comment.

On Tuesday, U.S. Energy Secretary Chris Wright said on Bloomberg TV that Washington would take a stake in the company. Details of the stake’s percentage and the separate stake in the GM joint venture have not previously been reported.

The government, which will acquire the stakes via no-cost warrants, requested an unspecified amount of equity during discussions in recent months over the loan’s amortization schedule, Reuters previously reported.

In response to that request and in order to secure the first tranche of loan funding, Lithium Americas last week offered the government no-cost warrants that would equate to 5% to 10% of its common shares.

The investment terms were being finalized throughout last week and as recently as yesterday, according to the source.

GM, which invested $625 million in the mine last year for a 38% stake, has the right to buy all of the project’s lithium from its first phase and a portion from the second phase for 20 years.

Administration officials had initially sought a guarantee that GM would buy the metal regardless of market conditions, a request the automaker pushed back on and which led to the equity stake request, Reuters previously reported.

The Thacker Pass project has long been touted by both Republicans and Democrats as a key way to boost U.S. critical minerals production and cut reliance on China, the world’s largest lithium processor.

The U.S. produces less than 5,000 metric tons of lithium at a Nevada facility owned by Albemarle. Thacker Pass’s first phase is expected to produce 40,000 metric tons of battery-quality lithium carbonate per year, enough for up to 800,000 EVs.

China plays a dominant role in the global lithium supply chain, producing more than 40,000 metric tons each year, making it the third-largest producer after Australia and Chile. China’s influence is far greater in refining, where it processes over 75% of the world’s lithium into battery-grade material.

(Reporting by Ernest Scheyder; Editing by Chris Reese, Veronica Brown and David Gregorio)