The Trump administration now wants an initial 5-10% equity stake in Lithium Americas’ (TSX, NYSE: LAC) Thacker Pass project in Nevada as it seeks to renegotiate the terms of a Biden-era $2.2-billion loan, according to Reuters.
The 24-year facility carries Treasury-linked rates, but officials raised concerns about repayment amid slumping lithium prices driven by Chinese overproduction, according to people familiar with the talks, the news agency reported on Tuesday. The update followed reporting by Bloomberg News on Monday that the White House was re-considering the loan.
Shares of Lithium Americas jumped nearly 80% in aftermarket trading on Tuesday to $5.54 apiece following news of the negotiations. The company’s market capitalization was near $750 million.
Warrants
In return for easing the loan’s amortization schedule, the administration is seeking warrants representing 5% to 10% of the company’s stock and guarantees on offtake commitments from General Motors (NYSE: GM), which invested $625 million last year for a 38% stake and rights to Thacker Pass’s first-stage output.
The request marks the latest intervention by Washington in sectors deemed critical to national security, following government stakes in Intel, MP Materials (NYSE: MP) and other technology and mineral producers. Thacker Pass, under construction since last year with more than 600 contractors on site, is slated to open in 2028 as the Western Hemisphere’s largest lithium source.
Lithium Americas won approval for the $2.93-billion project at the end of Trump’s first term, with the loan finalized in 2023 under the Biden administration.
The company joins peers including Ioneer (ASX: INR), Exxon Mobil (NYSE: XOM) and Standard Lithium (TSXV: SLI) in advancing U.S. projects aimed at reducing reliance on China, which dominates refining and processes more than three-quarters of the world’s lithium into battery-grade material.
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