U.S. government takes stake in Canadian lithium miner and its Nevada mining project

The US Energy Department has taken equity bets in Canadian America and its Nevada mining joint venture with General Motors as part of the Renaissance of a federal loan.

Under the new terms, the US government will take 5% equality ownership in Lithium US and Lithium-GM joint venture. Equity steak will be acquired through no-cost warrant, which are financial equipment that gives the government the right to buy shares at a fixed price. New Terms came out of an Renaissance over a loan of $ 2.26 billion with the DOE’s loan program office, provided to Lithium America under the Biden administration.

Lithium US shares increased the hourly trading by 34%.

The DOE stated that equity stake would serve as additional collateral on loan, helping taxpayers reduce repayment risk. Lithium is a major chemical element used in the battery of electric vehicles and smartphones.

US Energy Secretary Chris Wright said in a press release, “Despite being some of the largest deposits, the United States produces less than 1% of the global supply of Lithium. Thanks to President Trump’s bold leadership, American Lithium production is skyrocketing.” “Today’s announcement helps reduce our dependence on foreign opponents for important minerals by strengthening domestic supply chains and the US taxpayer ensures better dollar leadership. President Trump promised and distributed to both.”

The announcement is the latest action on Tuesday by the Trump administration to take ownership bets in companies. The Trump administration has announced a plan to take a 10% stake in Intel and MP content, which operates a rare earth mineral mine in the United States.

Lithium America is developing a nearby pass mine in Nevada, which is expected to produce adequate lithium to make 800,000 electric vehicles per year in the first phase. President Trump approved the permit for the project in January 2021 at the end of his first term.

GM bought a 38% stake in $ 625 million in Lithium America last year, which empowered the automakers to buy the first phase of production, and lithium from the mine for 20 years during the second phase. Overall, it will be sufficient lithium for 1.6 million EVs over the next two decades.