US Government Gains Equity in Major Lithium Mining Project

The Trump administration has now secured a substantial interest in the controversial Thacker Pass lithium mining venture.

Strategic Investments

In an effort to bolster domestic supply chains, the Trump administration announced a 5 percent investment in the mining company Lithium Americas, plus an additional 5 percent in its joint venture with GM at Nevada's Thacker Pass. According to the Department of Energy, this initiative aims to make the site the foremost producer of lithium in the Western Hemisphere by the year 2028.

Lithium's importance cannot be overstated, as it is an essential element in the development of batteries for electric vehicles, renewable energy storage like wind and solar, and numerous rechargeable products. Both Trump and Biden administrations have recognized the need to reduce dependency on international lithium sources.

Production Ambitions and Challenges

Once operational, Thacker Pass is predicted to generate 40,000 metric tons of lithium carbonate each year for battery production. Currently, US lithium output is less than 5,000 metric tons. To provide context, China's production levels match Thacker Pass's future output and rank as the world's third-highest behind Australia and Chile.

Construction on the Thacker Pass mine began in 2023 amidst considerable opposition from Indigenous communities nearby. Human Rights Watch and the American Civil Liberties Union criticized the federal permitting process, claiming it violated Indigenous rights by not securing adequate consent from affected tribes. Environmentalists and ranchers have also raised concerns regarding potential adverse effects on local water supplies and at-risk wildlife.

Financial and Strategic Moves

In October 2024, Lithium Americas reached a $2.26 billion loan agreement with the Biden administration. The Department of Energy modified this agreement to include over $100 million in new equity during restructuring. The US's decision to acquire equity aims to sustain the mine's operations amid global declines in lithium prices, as explained by Energy Secretary Chris Wright.

Similar strategies have been employed with other corporations recently. In August, Trump administration acquired a 10 percent share in Intel. Moreover, MP Materials, the sole US-based producer of rare earth minerals, announced that the Department of Defense would become its largest shareholder, owning a 15% share.