Lithium Americas Stock Jumps on $2.26B Conditional Loan From US Department of Energy

Shares of Lithium Americas (LAC) rose close to 4% in intraday trading Thursday after the miner received a $2.26 billion conditional loan commitment from the Biden administration to construct its Thacker Pass lithium processing plant in Nevada.

The move is an attempt by the White House to try to boost demand for electric vehicles (EVs), which has slumped. Lithium is used to make EV batteries, and the Department of Energy (DOE) said the money is part of the administration’s “whole-of-government” approach aimed at “strengthening America’s critical materials supply chain, which is essential to building America’s clean transportation future and enhancing our national and energy security.”

Officials note that the plant in Humboldt County is to be built next to a mine that contains the largest proven lithium reserves in North America, and is anticipated to produce some 40,000 metric tons per year of battery-grade lithium carbonate for use in lithium-ion batteries.

The White House said that the project is also supported in part by a $650 million investment from General Motors (GM), which is expected to be a long-term customer for the factory’s lithium carbonate.

Lithium Americas CEO Jonathan Evans said the company has “completed all the early-works and infrastructure” needed for major building at Thacker Pass, and it anticipates issuing a full notice to proceed and beginning construction “shortly following the closing of the DOE loan.”

As with others in the sector, Lithium Americas has been hurt by plunging lithium prices. Shares were up 3.8% to $5.92 as of 3:30 p.m. ET Thursday but have lost about 30% of their value over the past year.