On Tuesday evening last week, reports broke that Washington is negotiating for up to a 10% equity stake in Lithium Americas (LAC). By Wednesday, the stock had exploded – up more than 90% in a single session.
This is yet another sign of the “new US playbook”: taking direct ownership in companies that produce resources and components deemed vital to national security.
Think about the sequence:
• Rare earth magnets (MP Materials)
• Semiconductors (Intel)
• And now lithium (Lithium Americas)
Why lithium? Why now?
Because lithium is the backbone of the future economy. From EVs to grid storage to advanced military tech, it’s the metal that powers the energy transition.
And right now, China calls the shots:
Not only are they the world’s third-largest producer, but more importantly, they control 65%+ of refining capacity.
That dominance means the US is heavily dependent on foreign supply chains for the raw materials that power everything from Teslas to fighter jets.
Lithium Americas isn’t just another miner…
The company is building Thacker Pass in Nevada – a site set to become the largest lithium project in the Western Hemisphere.
In its first phase, expected in 2028, the mine will produce around 40,000 tons of lithium carbonate annually – enough to power 800,000 electric vehicles a year.
At full scale, output could rise to 160,000 tons per year, with a projected lifespan of 85 years. That’s why it isn’t just another mine; it’s a generational asset that could underpin US lithium independence for decades.
To finance construction, the company previously secured a $2.26 billion loan from the Department of Energy. The current talks are part of a renegotiation of that loan – and Washington is pushing for more than just repayment.
As part of the deal, Lithium Americas has offered no-cost warrants on up to 10% of its common shares. That means the US government could soon hold a direct equity stake in one of the most strategic lithium assets on the planet.
Meanwhile, General Motors (GM) has already put $625 million into the project and owns a 38% stake. The administration is now pressing GM to provide further purchase guarantees – effectively locking in a domestic supply chain for EV batteries.
This deal is all about control…
Control over the resources that will power the future.
Control over supply chains that Beijing has dominated for decades.
Control over a commodity that has shifted from an industrial input to a strategic asset.
China understood this long ago, buying up lithium projects across Argentina, Chile, and Australia – not for short-term profits, but for geopolitical leverage.
Now, at last, the West is waking up.
Is it too late? We’ll just have to see.
Put simply, lithium has outgrown its role as just another commodity – it’s now a matter of national security. With governments stepping in and taking direct stakes, we may be entering a new era of strategic resource investing. For investors, that’s a shift worth watching very closely. Make sure you’re in the loop by signing up to South African Investor.
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