The US Department of Energy Secretary Chris Wright announced on Tuesday (September 30th) that the Trump administration will acquire a stake in the Canadian company “Lithium Americas,” which is developing one of the world’s largest lithium mines in northern Nevada, USA.
The Department of Energy will hold a 5% stake in “Lithium Americas.” Additionally, the department will also hold a 5% stake in the Thacker Pass lithium mine project in Nevada. General Motors also has partial ownership of the mine.
The stock price of “Lithium Americas” soared by 35% on Wednesday, October 1st. So far this year, the company’s stock price has increased by 92%, with much of the boost stemming from the government’s acquisition of its shares.
The “Thacker Pass” lithium mine project is crucial for reducing America’s dependence on Chinese lithium resources. Lithium is a key material used in the production of smartphones, electric vehicles, and renewable energy high-tech batteries.
With the global shift towards green energy, lithium has become increasingly important. It is projected that global demand for lithium will increase sixfold by 2030 compared to 2020. China is the largest producer of lithium globally and processes the majority of lithium. China accounts for about two-thirds of the world’s lithium chemical output.
Both parties in the US support the “Thacker Pass” project and aim to narrow the production capacity gap between the US and China.
According to the Associated Press, Wedbush Securities analyst Dan Ives stated that the “Thacker Pass” project provides a “huge opportunity” for America to reduce its reliance on lithium from China and other foreign competitors.
In a statement released on Wednesday, the Department of Energy stated that the US government’s investment in the project will “ensure the project’s advancement,” stimulate job creation in the manufacturing sector, and ensure that America can access the largest confirmed lithium mineral deposits in North America.
“While the US possesses some of the largest lithium deposits, its lithium production accounts for less than 1% of the global supply,” said US Energy Secretary Wright. He added that the government’s investment in lithium mining aims to reduce dependence on foreign competitors in critical minerals by strengthening the domestic supply chain and ensuring better management of American taxpayers’ funds.
On Wednesday, “Lithium Americas” announced that they have reached a non-binding agreement with the US Department of Energy to advance the disbursement of the first $435 million federal loan.
The CEO of the company, Jonathan Evans, welcomed the support from the Trump administration. “We are collectively driving the localization of large-scale lithium production in America, strengthening the US supply chain, creating excellent employment opportunities, and enhancing our long-term energy security and prosperity,” Evans said in a statement.
The first phase of the “Thacker Pass” project is expected to commence operations by the end of 2027. Once fully operational, it is projected to produce approximately 40,000 tons of battery-grade lithium carbonate annually for lithium-ion batteries, enough to power 800,000 electric vehicles. It also contributes to ensuring the Trump administration’s priority of reshoring the American supply chain.
This is the latest move by the Trump administration to invest in private enterprises. Prior to this, the administration announced acquiring a 10% stake in the chip giant Intel. The Pentagon also reached an agreement with the US rare earth mining company MP Materials, holding a 15% stake in the company, becoming MP Materials’ largest shareholder. The Pentagon stated that it will invest billions of dollars in this Las Vegas-based company and purchase its rare earth products.