Lithium Americas (TSX:LAC,NYSE:LAC) has reached an agreement with General Motors (NYSE:GM) and the US Department of Energy (DOE) to unlock the first $435 million installment of a landmark federal loan for its Thacker Pass lithium project in Nevada.
The company confirmed on Wednesday ( October 1) that the DOE will receive warrants giving it a 5 percent equity interest in Lithium Americas and a parallel 5 percent economic interest in the Thacker Pass joint venture with GM.
The arrangement is part of the terms for advancing the first tranche of a US$2.23 billion federal loan approved in 2024 to finance construction of the project, which is set to be the largest source of lithium in the western hemisphere.
The DOE also agreed to defer US$182 million of debt service over the first five years of the loan, while Lithium Americas will post an additional US$120 million into reserve accounts within a year of the funds being drawn.
Located about 25 miles south of the Oregon border, Thacker Pass has been cast as central to Washington’s push to cut reliance on Chinese-controlled processing and narrow the gap with global lithium producers in Australia and Chile.
Phase 1 of the project is designed to produce 40,000 metric tons of battery-grade lithium carbonate annually—enough to support roughly 800,000 electric vehicles.
At present, US domestic lithium output is negligible, limited to Albemarle’s (NYSE:ALB) Silver Peak operation in Nevada, which produces fewer than 5,000 metric tons a year.
By comparison, China processes more than three-quarters of the world’s raw lithium into battery-grade material.
Washington’s share finalized
The DOE stake comes after weeks of speculation over the size of Washington’s equity interest.
According to sources in late September, Trump officials had pressed for up to 10 percent, with Lithium Americas countering by offering no-cost warrants for 5 to 10 percent of its shares. The final agreement settled at the low end of that range.
The warrants issued to DOE will allow the department to appoint an observer to the joint venture’s board meetings for as long as it retains its economic stake.
If exercised in full, the ownership structure of the Thacker Pass joint venture will be 59 percent Lithium Americas, 36 percent GM, and 5 percent DOE.
Voting control, however, will remain split 62 percent to Lithium Americas and 38 percent to GM.
“We greatly appreciate the support of the Administration, General Motors and our partners in advancing this vital world-class project,” said Jonathan Evans, president and CEO of Lithium Americas.
“Together, we are onshoring large-scale US lithium production, strengthening America’s supply chain, creating exceptional jobs and enhancing our long-term energy security and prosperity”
For Washington, the agreement marks the latest in a series of moves by the Trump administration to take minority positions in companies deemed critical to US industrial and national security interests.
US Energy Secretary Chris Wright said in a statement that the Thacker Pass deal “helps reduce the country’s dependence on foreign adversaries for critical minerals by strengthening domestic supply chains.”
Shares of Lithium Americas surged more than 30 percent in pre-market trading Wednesday following the announcement, extending a rally that began last month when reports of a potential federal equity stake first surfaced.
The stock had spiked more than 90 percent in late September after Reuters reported the Trump administration’s push for ownership, jumping from about US$3 to over US$6.
Construction at Thacker Pass is already underway, with more than 600 contractors on site. The mine and processing plant are expected to reach full commercial output in 2028.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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