Small Cap Lithium Stock Soars on Rumored Trump Admin Equity Stake
Lithium Americas doubles as Washington eyes direct ownership in U.S. supply chain.
Shares of Lithium Americas Corp. (NYSE: LAC) (TSX: LAC) exploded higher on Wednesday after reports surfaced that the Trump administration is weighing an equity stake in the Vancouver-based miner. The company, which is developing the massive Thacker Pass lithium project in Nevada alongside General Motors (NYSE: GM), nearly doubled in market value as speculation of government involvement swept across Wall Street.
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Lithium Americas stock spiked as much as 105% intraday, closing with a 95% gain at $6.01 after hitting a session peak of $6.30. Trading volume surpassed 286 million shares, more than 30 times the average daily turnover. Over the past year, shares are up 144%.
Washington Eyes Direct Role in Lithium Supply
The move represents the latest in a series of steps by President Trump to secure critical minerals for U.S. supply chains. Thacker Pass is expected to become the largest lithium mine in the Western Hemisphere, producing 40,000 metric tons annually once Phase 1 operations begin in 2028. That output could supply lithium for nearly 800,000 electric vehicles a year.
A White House official confirmed the administration’s stance in comments to Reuters:
“President Trump supports this project. He wants it to succeed and also be fair to taxpayers. But there’s no such thing as free money.”
Reports indicate the administration is seeking as much as a 10% stake in Lithium Americas. The request comes as the company renegotiates terms on its $2.26 billion loan from the Department of Energy. Talks include extending repayment schedules while offering the government no-cost warrants on common shares.
GM, Loan Terms, and National Security Stakes
General Motors, which invested $625 million for a 38% interest in Thacker Pass, has already secured long-term supply agreements from the mine. A GM spokesperson told Reuters: “We’re confident in the project, which supports the administration’s goals.”
The administration’s equity approach mirrors its recent strategy in other critical sectors. In July, the Department of Defense acquired a 15% stake in MP Materials (NYSE: MP), the rare earths producer whose shares have since more than doubled. Similar moves have been made with Intel (NASDAQ: INTC) to secure semiconductor supply.
The White House has been vocal about its desire to counter China’s dominance in minerals refining, where Beijing processes over 75% of the world’s lithium into battery-grade material. Currently, the U.S. produces less than 5,000 metric tons annually from Albemarle’s (NYSE: ALB) Silver Peak mine in Nevada, underscoring the strategic importance of Thacker Pass.
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Broader Lithium Market Impact
The rumors of a federal stake sent ripples across the lithium sector. Shares of Standard Lithium (NYSE American: SLI) (TSXV: SLI), ioneer (NASDAQ: IONR), and Exxon Mobil (NYSE: XOM), all of which have lithium development projects in the U.S., moved higher on the news. Investors view the administration’s intervention as a potential template for future support.
Lithium prices, however, remain under pressure. Oversupply from Chinese producers has pushed lithium carbonate futures down more than 12% year-over-year. That dynamic partly explains Washington’s demand for warrants and stricter terms before releasing funds to Lithium Americas.
Despite price volatility, demand projections remain strong. With electric vehicle adoption accelerating, automakers and governments alike are jockeying to lock in resources. The U.S. government’s direct involvement in Lithium Americas marks the first time Washington has pursued a stake in a Canadian company, highlighting how national security concerns now blur traditional borders.
What It Means for Investors
Lithium Americas, with a market cap of roughly $750 million before Wednesday’s rally, now sits at the center of one of the most closely watched negotiations in the energy transition. While the outcome of talks remains uncertain, the administration has signaled its commitment to pushing the project forward.
For investors, the development underscores a broader theme: critical minerals are moving from speculative plays to geopolitical assets. If finalized, the government’s stake in Lithium Americas could signal a new era where Washington partners directly with private companies to accelerate domestic production.
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