- Shares of Lithium Americas surged nearly 97% amid reports of Trump administration's stake interest
- The company's market value doubled from $667 million to about $1.32 billion after the rally
- Trump administration seeks up to a 10% stake in the Thacker Pass lithium project in Nevada
Shares of Lithium Americas nearly doubled in trade on Wednesday, registering gains of up to 97% on the back of news reports that the Donald Trump administration is seeking a stake in the mining company.
The stock closed at $6.01 on Wednesday, which accounts for a gain of more than 95%. The sharp rally meant that the company's market capitalisation doubled from $667 million to roughly $1.32 billion.
Forbes reports that the Trump administration had requested a stake in Lithium Americas as part of ongoing talks over its Thacker Pass lithium project in Nevada. The report adds that the stake could be as high as 10%.
The Thacker Pass project is currently one of the biggest planned lithium operations in the United States. The project was first issued by Trump himself during his first term. The project later secured financing from the Energy Department under President Joe Biden.
Once operational, the project is set to produce 40,000 metric tons of battery-quality lithium per annum, which can power about 8 lakh electric vehicles.
As per the report, the project is seen as a vital pivot for US as it looks to reduce dependence on China for critical battery materials.
General Motors invested $625 million for a 38% stake while committing to buying production from the mine.
The most recent development saw Lithium Americas and GM asking the Energy Department to revisit the terms of the loan deal that was originally agreed under the Biden administration.
The Energy Department agreed with "minor modifications to the loan to protect taxpayers". In a statement on Wednesday, Lithium Americas said, “ We continue to work with the [Energy Department] and GM regarding proposals for a mutually agreeable resolution.”
The prospect of direct government ownership in a critical minerals project, coupled with a strong demand for EVs, saw investors rushing to the stock.
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