Lithium Americas (NYSE: LAC) jumped 23.3% overnight to $7.04 after confirming the US Department of Energy (DOE) had taken a 5% equity stake in both the company and the joint venture developing the Thacker Pass lithium project in Nevada alongside General Motors (GM).
The agreement unlocks the first $435 million drawdown from the DOE’s previously announced US$2.3 billion loan, while also permitting the JV to enter into new third-party offtake agreements for lithium not contracted to GM.
CEO Jonathan Evans highlighted the strategic nature of the deal:
“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.”
The DOE added that the revised structure includes over US$100m of new equity and offers additional protections for US taxpayers.
Washington’s New Playbook
As we flagged over a week ago (26 September), reports of government negotiations for a stake in Thacker Pass had already sparked speculation across the sector, with LAC nearly doubling in after-hours trade at that time.
This confirmation cements a broader trend: the US government is moving beyond loans and grants to direct equity co-investments in critical minerals and advanced manufacturing projects.
Recent examples include:
- MP Materials (NYSE: MP) — Defense Department equity participation to strengthen US rare earth supply.
- Intel (NASDAQ: INTC) — equity stake as part of US semiconductor policy.
The underlying philosophy is shifting: if Washington provides capital, it increasingly wants a seat at the table, both for financial return and to ensure supply chain security.
Why It Matters
- De-risking Thacker Pass: With DOE equity and funding secured, financing risk is materially reduced ahead of first production (target 2028).
- OEM Flexibility: The deal enables Lithium Americas and GM to bring in new strategic partners through offtake agreements.
- Valuation Support: The government’s direct involvement provides a “policy put,” reinforcing market confidence and helping support higher development-stage multiples.
- Sector Signal: For ASX-listed lithium developers with North American projects (e.g., Ioneer, Arizona Lithium, Sayona, Anson Resources), today’s confirmation validates expectations of blended financing packages , DOE loans, equity stakes, and OEM partnerships.
Bottom Line
Lithium Americas’ stock has gained 91% in the past month, fuelled by speculation we first highlighted on 26 September. With confirmation now in hand, the US government’s stake in Thacker Pass underscores a new era of policy-backed equity capital for critical minerals, one that lowers financing hurdles, accelerates timelines, and strengthens offtake confidence for developers across the US and Canada.
