U.S. Government Takes 5% Stake in Thacker Pass Lithium Project, Boosting Shares
The U.S. government has taken a significant lithiumstake in the Thacker Pass Lithium Project, located in northern Nevada. This move, which includes a 5% stake in Lithium Americas and a further 5% in the Thacker Pass lithium mine itself, is a departure from the Department of Energy's usual financing model. The government's involvement has boosted investor confidence, with Lithium Americas' shares surging 23.3%.
The equity agreement has unlocked the initial $435 million drawdown from the DOE's previously announced $2.3 billion funding package. This includes over $100 million in new equity capital beyond the loan component. The government's stake functions as a powerful de-risking mechanism, reducing execution uncertainty and creating a 'policy put' that supports higher valuation multiples for the company.
The project aims to produce 80,000 tonnes of battery-grade lithium carbonate annually at full capacity, with commercial production expected to commence by 2028. General Motors, with its substantial 38% joint venture stake, secures direct access to domestic lithium for its expanding EV battery production needs. The precedent set at Thacker Pass is likely to influence future mining industry projects, particularly those deemed essential to national security or economic competitiveness.
The government's equity participation in the Thacker Pass Lithium Project secures long-term federal support for Lithium Americas, reduces capital raising pressure, and provides political backing for permitting and regulatory processes. With the DOE's direct stake, the project's strategic importance is further emphasized, potentially shaping the future of mining industry projects in the U.S.
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