U.S.-listed shares of Lithium Americas surged more than 70% in premarket trading on Wednesday after a report said the Trump administration was seeking an equity stake of up to 10% in the miner, the latest sign of involvement in industries the government sees as critical to national security.
Reuters reported late on Tuesday, citing two people familiar with the discussions, that the administration was discussing taking the stake in the company as part of talks to renegotiate a $2.26 billion government loan for its Thacker Pass lithium mine.
“Markets can view equity stakes as a leading indicator of favorable ROIC (return on invested capital)… the incentive for taking equity stakes seem significantly higher than withdrawing funding,” said analysts at Jefferies.
The loan from the U.S. Energy Department for the Thacker Pass project, a venture with General Motors, was approved by Trump at the end of his first term.
Shares of the automaker, which owns 38% of the mine, gained 2.9% before the bell.
When it opens in 2028, the project is expected to become the Western Hemisphere’s largest source of lithium and could far surpass larger peer Albemarle’s facility in the region.
The project has long been touted as a key way to boost U.S. critical minerals production and cut reliance on China, the world’s largest lithium processor.
The Trump administration has also moved to take a stake in chipmaker Intel and mining company MP Materials as part of efforts to improve domestic manufacturing activity and re-shore supply chains to the U.S.
Lithium Americas had split itself into two, separating its North American and Argentine businesses in November 2022 to boost focus on the Thacker Pass project.
The company’s net loss nearly doubled in the second quarter, from a year-earlier, its earnings report showed last month.
The stock was last up 67.1% at $5.13 before the bell, after falling nearly 7% in the previous session.
The news also lifted other lithium miners. Albermarle gained 5.2% while Sigma Lithium climbed 5.3%. U.S.-listed shares of SQM rose 2.7% in light volumes.
—Purvi Agarwal, Reuters