The U.S. government is reportedly exploring the possibility of acquiring up to a 10% ownership in the Canadian lithium mining firm.
Published On 24 Sep 2025
The Trump administration is reportedly weighing an investment that could grant the U.S. government up to a 10% ownership stake in Lithium Americas, a prominent lithium extraction company headquartered in Canada.
According to sources familiar with the discussions, as reported by Reuters on Tuesday, the White House is actively considering this equity position as part of a broader strategy.
This potential acquisition aligns with a $2.2 billion loan extended by the U.S. Department of Energy to support Lithium Americas’ Thacker Pass project in northern Nevada, which is poised to become the largest lithium mining operation in the Western Hemisphere.
The company, based in Vancouver, British Columbia, confirmed ongoing negotiations with both the Department of Energy and automotive giant General Motors concerning the financing of the Thacker Pass initiative.
Government Ownership Initiative
This prospective government investment highlights the Trump administration’s growing tendency to utilize direct equity participation as a means to influence critical industries and reduce dependency on China, which currently dominates the processing and refining of essential minerals.
While Australia and Chile lead global lithium production, China processes over 75% of the world’s lithium into battery-grade materials, despite ranking third in raw output with more than 40,000 metric tonnes annually.
The Thacker Pass project is considered a cornerstone in establishing a domestic lithium supply chain, supporting Washington’s long-term objective to increase U.S. production of lithium-a vital component in batteries for electric vehicles and various electronic devices.
Recently, the administration has pursued similar equity stakes, including a significant investment in semiconductor manufacturer Intel and a deal positioning the Department of Defense as the largest shareholder in rare earths company MP Materials.
Financial analysts at Jefferies note that government equity participation is often favored over tax hikes due to its lower political risk, while simultaneously bolstering project financing, corporate earnings, and returns on invested capital.
Shares of Lithium Americas, traded both in Canada and the U.S., surged approximately 90%, reaching 8.04 Canadian dollars ($5.78) and $5.80 respectively. The company’s market capitalization stood at $744.5 million on the New York Stock Exchange at the last close.
General Motors, which acquired a 38% stake in the mine last year through a $625 million investment, holds exclusive rights to purchase all lithium produced during the project’s initial phase and a portion from the subsequent phase for two decades. However, U.S. officials are reportedly seeking assurances that GM will fulfill its purchase commitments.
Mohamed Sidibe, an analyst at NBCFM Research, points to the MP Materials and Department of Defense partnership as a model demonstrating how government equity, long-term purchase agreements, and price supports can mitigate risks in strategic ventures.
Applying a similar framework to Lithium Americas could enhance financial stability and project resilience, though it may lead to dilution of current shareholders’ stakes, Sidibe added.
Production at the Thacker Pass site is anticipated to commence in 2028.
Seth Goldstein, an analyst at Morningstar, suggests that a government equity stake might include guaranteed purchase prices, potentially ensuring profitability for Thacker Pass even if lithium prices remain subdued over an extended period.
