The Department of Energy on Tuesday announced plans to take a stake in Lithium Americas, framing the decision to invest in the private mining company as a move to reduce dependence on “foreign adversaries” for critical minerals. 

The deal provides the government with 5% equity ownership in Lithium Americas in addition to a 5% stake in the private company’s Thacker Pass lithium project joint venture with General Motors. Nevada‘s Thacker Pass mine contains one of the largest lithium deposits in the U.S., and is viewed by the Trump administration as a critical avenue to loosening China’s grip on the critical mineral, which is a key component of energy systems and batteries used for electric vehicles. 

Recommended Stories

• Electric vehicle sales surge as buyers try to get ahead of subsidy expiration Tuesday
• DOT deputy slams regulatory 'coercion' boosting electric vehicles as subsidies expire
• Trump administration boosts coal with 13.1 million federal acres for leasing

“Despite having some of the largest deposits, the United States produces less than 1% percent of the global supply of lithium. Thanks to President [Donald] Trump’s bold leadership, American lithium production is going to skyrocket,” Energy Secretary Chris Wright said in a statement. “Today’s announcement helps reduce our dependence on foreign adversaries for critical minerals by strengthening domestic supply chains and ensures better stewardship of American taxpayer dollars.”

Lithium Americas’ stock surged in response to the government’s announcement, rising by more than 35% in premarket trading.

Thacker Pass, which was approved under the first Trump administration, is expected to produce 40,000 metric tons of battery-quality lithium carbonate per year, enough for up to 800,000 EVs, in its first phase. 

The government’s move to take a stake in the Canadian-based company overseeing the development comes as the Trump administration has drawn some heat from free-market conservatives for getting involved in multiple other private-sector companies. 

Last month, Washington took an Intel stake by repurposing CHIPS Act funds. 

Sen. Rand Paul (R-KY) suggested the decision represented a move away from capitalism and toward socialism. He called it a “terrible idea.”

“If socialism is government owning the means of production, wouldn’t the government owning part of Intel be a step toward socialism?” the Kentucky lawmaker said in a post to social media.

TODD YOUNG SAYS TRUMP’S FEDERAL INTEL STAKE VIOLATES CHIPS ACT HE WROTE

Over the summer, the Pentagon moved to take a 15% stake in rare-earths miner MP Material, as well as setting a guaranteed price floor “to compete and reduce our vulnerability to China.”

In June, Washington attracted further criticism for a deal between Nippon Steel, U.S. Steel, and the U.S. government that included Nippon purchasing all U.S. Steel shares in exchange for a “golden share” for the federal government, giving the president the final say over major decisions, including plant closures and capital expenditures.