WASHINGTON (AP) — The White House is moving forward with a deal that would allow the U.S. government to take a small equity stake in a Canadian company that is developing one of the world’s largest lithium mines in northern Nevada, an official said.
The Department of Energy and Lithium Americas, developer of the proposed Thacker Pass lithium mine and processing plant located about 200 miles north of Reno, have agreed on changes to a $2.3 billion federal loan that could allow the project to advance and extract the silver-white metal used in electric vehicle batteries. General Motors has pledged more than $900 million to help develop Thacker Pass, which holds enough lithium to build 1 million electric vehicles annually.
The proposed equity stake in Vancouver-based Lithium Americas is the latest instance of the current administration intervening directly in private companies. The government is acquiring a 10% stake in Intel through the conversion of billions in previously granted government funds and commitments. The administration spent $400 million of taxpayer money in July on MP Materials stock to establish the U.S. government as the largest owner of the Las Vegas rare earths miner. The government has also reached agreements with Nvidia and AMD for a 15% revenue cut on certain chip sales to China.
A White House official, remaining anonymous to discuss an unfinished deal, indicated that while the U.S. stake in Lithium Americas would be “very small” — less than 10% — it aims to serve as “a cash buffer” for the company. Lithium Americas sought to restructure the federal loan initially approved last year under the Biden administration.
“We support the project moving forward,’' said the anonymous official.
“Critical minerals like lithium are crucial” to invigorate the U.S. economy and restore domestic manufacturing,” they added, stating, “We don’t believe in free money.”
Though a spokesperson for Lithium Americas declined further comments, they confirmed ongoing discussions with the DOE and General Motors regarding the federal loan. Jim Cain, a GM spokesperson, conveyed confidence in the project but refrained from discussing ongoing negotiations.
The Thacker Pass site is considered vital for establishing a domestic supply chain for battery production for electric vehicles and other technologies. Notably, it demonstrates a rare consensus between Trump and Biden on the importance of increasing American critical mineral production and reducing dependency on China, the leading lithium processor in the world.
Thacker Pass is projected to produce 40,000 metric tons of battery-quality lithium carbonate annually in its first phase, sufficient to power around 800,000 electric vehicles.
Environmental advocates and tribal leaders have labeled the proposed mine as controversial due to its proximity to sacred sites associated with historical massacres of Native Americans.
The Biden administration has endorsed the project as a means to combat climate change by accelerating the transition from fossil fuels.
Conversely, Trump has openly criticized climate change initiatives, describing them as the greatest con job ever orchestrated during a recent United Nations speech.
Efforts to launch the lithium project follow a slowdown in U.S. electric vehicle sales, as potential buyers express worries about the availability of charging stations and overall costs. A new law, championed by Republican lawmakers and signed by Trump, risks undermining EV sales by phasing out federal tax incentives for EV purchases starting this month, which could deter consumer interest.
Without these tax credits, automobile manufacturers may find it increasingly difficult to maintain sales levels.
Besides its usage in electric vehicle batteries, lithium is important for manufacturing glass, chemicals, and pharmaceuticals. Lithium batteries are also crucial for storing renewable energy generated from wind and solar sources.