The Trump administration is negotiating for up to a 10% equity stake in Lithium Americas Corp. as it reviews the terms of a $2.26 billion Department of Energy (DOE) loan linked to the company’s flagship Thacker Pass lithium project in Nevada. This move combines economic intervention with national security priorities. The proposal coincides with declining lithium prices throughout the world, repayment worries, and the administration’s overarching plan to put the federal government directly into sectors it believes are vital to the future of the United States.
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A New Industrial Policy in Action
This suggestion is not a unique instance. Asserting that taxpayer-backed loans and subsidies ought to include ownership rights, the Trump administration has recently pursued stock holdings in a number of businesses, including Intel, MP Materials, and other tech and mineral companies. There are two reasons for this:
- Make sure the government benefits when initiatives are successful in order to safeguard taxpayer dollars.
- Boost domestic control over vital supply chains to further national security objectives.
The latest effort with Lithium Americas demonstrates how Washington is aggressively influencing key industries like advanced manufacturing and sustainable energy through industrial policy, not merely by providing subsidies.
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Why Lithium Matters So Much
Modern energy storage is based on lithium. In order to produce batteries that power:
- Electric vehicles (EVs)
- Smartphones and laptops
- Renewable energy storage systems
Currently, Albemarle’s Silver Peak facility in Nevada provides the majority of the less than 5,000 metric tonnes of lithium produced annually in the United States. In contrast, China has over 75% of the capacity for battery-grade lithium refinement, while Australia and Chile hold the majority of mining.
After it is finished, the Thacker Pass mine has the potential to revolutionise American capacity and drastically cut down on dependency on foreign suppliers, especially China, whose refining dominance presents strategic threats.
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The Thacker Pass Project: An Overview
In northern Nevada, Thacker Pass is advertised as the largest lithium project in the Western Hemisphere and is located roughly 25 miles south of the Oregon border. Crucial aspects include:
- More than 600 contractors were on site when construction started in 2024.
- Up to 800,000 EVs might be powered by the first phase’s 40,000 metric tonnes of lithium carbonate produced annually.
- The project is worth $2.93 billion in total.
- Timeline: By 2028, full operations are anticipated.
The mine is already seen as a key component of American aspirations to create a domestic critical mineral supply chain.
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Trump Administration’s Equity Request
The administration wants to acquire between 5% and 10% of Lithium Americas as part of the renegotiated loan deal, according to persons with knowledge of the situation.
The conversations began because:
- Due to Chinese overproduction, lithium prices have dropped, which has raised questions about the company’s capacity to repay the 24-year DOE loan.
- Lithium Americas requested a change to the amortisation schedule that would postpone some principal payments without changing the total loan term or interest rates.
The government asked for equity in return for ongoing support. Since then, Lithium Americas has offered to pay restructuring fees and issue free warrants equal to 5–10% of its shares.
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GM’s Strategic Stake in the Mine
General Motors is already deeply invested in Thacker Pass:
- GM invested $625 million in the project in 2024, obtaining a 38% ownership stake.
- For the next 20 years, GM also owns the rights to all phase one lithium production as well as a portion of phase two output.
Trump administration officials want further assurances that GM will make a long-term commitment to buy the lithium. Additionally, they are looking for ways for GM to give Washington some degree of authority over the project.
The DOE loan is a “necessary part of the financing to commercialise this important national resource,” according to GM, which still supports the project.
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Market Reaction: Shares Surge
News of possible government equity involvement caused Lithium Americas’ stock price to soar. Shares rose from about $3 to $5.54, a roughly 80% increase in after-hours trading. Investors took the government’s interest as a sign that they believed the project would be financially viable and strategically significant.
National Security and Economic Independence
The U.S. lithium policy is based on geopolitical competition and goes beyond market economics. Important motivators include:
- Reducing reliance on China, which controls the majority of the world’s refining.
- Supporting the switch to electric vehicles, which is essential to industrial and climate policy.
- Strengthening local industries to create jobs and provide energy security.
According to a White House official, “President Trump is in favour of this project.” He wants it to be successful and equitable for taxpayers. Free money does not exist, however.
Loan Terms and Safeguards
The DOE loan has a 24-year term and interest rates that are based on those of the US Treasury. With built-in protections, Washington can:
- Assume command of the project in the event of significant setbacks or unexpected expenses.
- Detailed reporting and compliance requirements allow you to track progress.
The goal of the administration’s campaign for equity is to equalise financial incentives between taxpayers and private investors while strengthening the government’s position.
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Bipartisan Support, Lingering Challenges
Thacker Pass has bipartisan support in Washington despite stark party differences. The project is viewed by both Democrats and Republicans as a means of:
- Strengthen U.S. energy independence.
- Compete with China in the critical minerals race.
- Generate jobs in Nevada and across the EV supply chain.
Still, there are difficulties. Environmental organisations have expressed worries about the ecological effects of land use, while fluctuations in commodity prices present continuous financial hazards. Lithium Americas has a market valuation of about $750 million, which is likewise modest given the scope of its goals.
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The Bigger Picture: U.S. Lithium Expansion
U.S. lithium production is being advanced by more than just Lithium Americas. Additional ongoing initiatives include:
- ioneer Ltd. – building a Nevada lithium-boron project.
- Standard Lithium – developing Arkansas resources.
- ExxonMobil – recently pivoting into lithium extraction.
These projects collectively demonstrate Washington’s sustained commitment to building a domestic supply base for essential minerals.
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Conclusion:
Negotiations between the Trump administration and Lithium Americas represent a sea change in Washington’s approach to assisting vital sectors. By tying federal loans to equity holdings, the government is not just lending money but also assuming control and influence over national security-related businesses.
If successful, Thacker Pass could serve as a fulcrum for America’s lithium future, lessen its need for China, and serve as a paradigm for combining private investment, public protection, and industrial policy. However, the stakes are really high. The results of these talks will influence not just the destiny of a single Nevada mine but also the course of renewable energy and supply chain independence in the United States as a whole.