Lithium Americas stock surged over 90% in premarket trading after reports that the Trump administration is seeking a stake in the company for the largest lithium mine in the US. The administration may acquire up to 10% of the project, leading to a rise in shares for both Lithium Americas and General Motors.

The proposed deal includes no-cost warrants for the administration on up to 10% of Lithium Americas’ common shares. General Motors, with a 38% stake, is also involved. The original loan terms allow the administration to take control if there are delays or cost overruns.

Lithium Americas aims to produce over 40,000 metric tons of lithium carbonate annually by 2028, enough for 800,000 electric vehicles. The US, currently producing less than 5,000 tons per year, seeks to increase domestic supply chains for lithium and other key metals.

China, the world’s third-largest lithium producer, refines over 65% of the metal globally, compared to less than 3% in the US. The Trump administration’s interest in stakes in mining companies like Lithium Americas and Intel aligns with efforts to boost domestic production and secure global supply chains.

Lithium Americas’ loan from the Department of Energy was approved during the first Trump administration. Renegotiation talks arose due to concerns about repaying the loan amid low lithium prices caused by Chinese oversupply. Lithium futures have declined significantly in the past year.

The Thacker Pass project in Nevada, under construction for nearly a year, aims to become the largest lithium mining project in the Western Hemisphere. The Trump administration’s push for stakes in key industries reflects a broader strategy to strengthen domestic production and global supply chains.

Read more at Yahoo Finance: Lithium Americas stock soars 90% on news of potential government stake