【By Guan察者网, Ruan Jiaqi】
After making a big move to take over a rare earth company, Trump has now set his sights on a lithium mining company in an effort to counter China's dominance in the key metal sector.
On September 23 local time, Reuters reported that according to informed sources, the Trump administration is considering renegotiating the terms of the Thacker Pass lithium mine project, which is a collaboration between Lithium Americas and General Motors.
The Thacker Pass lithium mine, located in Nevada, is one of the largest lithium mines in the United States. The project was approved for a $2.26 billion loan by the U.S. Department of Energy. According to two informed sources, the new contract would allow the Trump administration to acquire up to 10% equity in Lithium Americas.
A White House official told Reuters, "President Trump supports the project, and he wants it to succeed, as well as ensure the interests of taxpayers, but there's no such thing as free money."
The report stated that the proposed equity investment is the latest example of the Trump administration directly intervening in the U.S. economy. Previously, Trump has repeatedly cited so-called "national security" reasons to seek government equity in American tech giants like Intel, the only U.S. rare earth miner MP Materials, and has also asked semiconductor giants like NVIDIA and AMD to remit part of their revenue from exports to China.
Lithium, known as "white oil," is a key metal for the energy transition, widely used in manufacturing batteries for electric vehicles and other electronic products.
China holds a dominant position in the global lithium supply chain, with an annual lithium production of more than 40,000 tons, making it the third-largest lithium producer in the world after Australia and Chile; and in the lithium refining sector, China's influence is even more significant, with over 75% of global lithium needing to be processed into battery-grade materials in China.
To reduce reliance on China for strategic materials, the U.S. and Western countries have recently accelerated and adjusted their strategies, aiming to localize, diversify, and "de-Chinize" critical mineral supply chains.
Reuters pointed out that the Thacker Pass lithium mine has long been seen as a core component of the U.S. building a domestic lithium supply chain. Both parties in the U.S. regard this lithium mine plan by Lithium Americas and General Motors as an important way to increase the production of critical minerals and reduce dependence on China.
Currently, the U.S. domestic lithium production is less than 5,000 tons, relying solely on one plant operated by the U.S. lithium giant Albemarle in Nevada. The first phase of the Thacker Pass lithium mine is expected to produce 40,000 tons of battery-grade lithium carbonate annually, enough to provide raw materials for up to 800,000 electric vehicles.
The Silver Peak lithium mine in Nevada is the only lithium mine in the United States with production capabilities. NASA satellite photo
According to the report, the Thacker Pass lithium mine is scheduled to start production in 2028 and will become the largest lithium mine in the Western Hemisphere. The mine is located about 40 kilometers south of the border between Nevada and Oregon, and construction has already begun for nearly a year, with over 600 contractors working on-site.
The total investment in the Thacker Pass lithium mine project is $2.93 billion, initially approved by Trump at the end of his first term. The relevant loan provided by the Office of Loan Programs (LPO) of the U.S. Department of Energy was approved by Biden administration officials last year. This loan has a term of 24 years, with interest rates based on the U.S. Treasury rate at the time of each drawdown.
According to the original loan terms, the U.S. government had established multiple investment protection measures, including several "control clauses" allowing the government to take over the project if it is delayed or faces serious cost overruns.
However, according to the aforementioned informed sources, Lithium Americas had originally planned to withdraw the loan at the beginning of this month, but the Trump administration raised concerns about the company's ability to repay due to the current low lithium prices and proposed renegotiating the loan terms.
Additionallly, according to a report by the Washington Free Beacon, the background of the U.S. Department of Energy's review of the project financing is that LPO senior advisor Greg Beard warned that the project may struggle to attract customers due to competition from Chinese low-cost lithium products.
A industry insider revealed that the White House's equity requirements were raised during discussions on the loan amortization plan in recent months. At that time, Lithium Americas proposed adjusting the repayment schedule for part of the principal, but not changing the overall repayment period and the total interest that LPO should receive.
In response to the Trump administration's demands and to facilitate the loan, Lithium Americas proposed providing a 5% to 10% free warrant on its common stock this week, as well as bearing all costs resulting from the adjustment of the amortization plan.
Another source also mentioned that General Motors invested $625 million in the mine last year, acquiring a 38% stake, with the right to purchase all output from the first phase of the project and part of the output from the second phase over 20 years.
Meanwhile, Trump administration officials are seeking formal guarantees from General Motors for such purchases, requiring them to sign a legally binding mineral purchase agreement; they are also trying to push General Motors to give up control over certain parts of the project and transfer it to the U.S. government.
According to the report, General Motors relies on the Thacker Pass lithium mine to meet most of its lithium needs for its electrification strategy. The company referred to the government loan as a necessary financial part for commercializing this important national resource and emphasized that Trump had "strongly supported" the mine project during his first term.
General Motors declined to comment on the purchase agreement. A spokesperson told Reuters, "We are confident in the project, and it aligns with the goals of this administration."
After the news of the Trump administration's equity demands spread, Lithium Americas' stock rose about 80% in after-hours trading, from around $3 per share to $5.54, reaching the highest level since March 2024.
Lithium Americas declined to comment on the ongoing negotiations but stated that it respects the LPO's decision to restructure the loan, saying, "We are actively communicating with the Department of Energy and our partner General Motors, and we will release the latest developments at the appropriate time."
Bloomberg cited sources saying that Lithium Americas is waiting for a response from the Trump administration. If the two sides ultimately fail to reach an agreement, the lithium mine project could face delays.
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