The U.S.’s creep towards state-owned companies is now encroaching on a Canadian firm.
Driving the news: The White House is reportedly seeking a stake of up to 10% in Canadian miner Lithium Americas as the company tries to renegotiate a US$2.3 billion loan from the U.S. Energy Department. The company’s Nevada-based project, Thacker Pass, promises to be one of the world’s biggest lithium mines.
- Last year, General Motors invested US$625 million for a 38% share in the mine and dibs to buy all of the lithium produced in the project’s first phase for its EV batteries.
Catch-up: Under the Trump II administration, the U.S. has increasingly pursued government ownership of private companies. The most high-profile example of this has been its 10% stake in Intel, but the critical minerals sector might be the area that sees the most action.
- The Department of Defense became the largest stakeholder in rare earth miner MP Materials in July, and the U.S. could try to ink more deals like this as it looks to bolster its mineral supply chain and loosen China’s control of the industry.
Why it matters: It’s the first time that a Canadian company has been the target of one of these deals, and it might not be the last. As of 2023, some $45.4 billion in Canadian mining assets were located in the U.S., the most of any foreign country. As Canada tries to fortify its economic sovereignty, this concentration of U.S. resources could complicate things.—QH