A Canadian miner is at the centre of America’s push to bring battery materials to Canada, but the Canadian government won’t say if it will look into a U.S. move to buy ownership stakes in Canadian minerals.
The silence makes a new, sensitive issue in cross-border industrial policy stand out at a time when both countries are trying to lock down important minerals.
This week, the U.S. Department of Energy said it changed a federal loan to Lithium Americas and got warrants for 5% of the company and another 5% of its Thacker Pass joint venture with General Motors.
Chris Wright, the Secretary of Energy, said that the new terms “help us rely less on foreign enemies for important minerals.”
Lithium Americas also said that Washington agreed to put off about $182 million of early debt service on the $2.26 billion loan and gave more information about the new warrants that come with the package.
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The changes, according to the company, make it possible for it to take out its first loan.
Once fully operational, Thacker Pass in northern Nevada will produce about 40,000 metric tonnes of battery-grade lithium carbonate each year. This will make it one of the most important parts of a domestic supply chain for electric vehicles and grid storage.
The loan was first approved in 2024, but it was then renegotiated because lithium prices were low and Washington was moving towards taking equity in important companies.
Since 2022, Ottawa has made it harder for foreign investors to buy critical minerals, even making state-owned companies sell their stakes.
The federal government, on the other hand, would not say if the U.S. government’s new stakes in a Canadian-listed miner would be reviewed under the Investment Canada Act. They said this was because of the law’s rules about privacy.
Legal experts told Canadian media that the Act lets people look into foreign government ownership, but that a small, non-controlling role in a U.S. project might be a hard test case.
The political situation is hard to ignore. The equity move comes after the Trump administration has been using federal power more and more to get things that are important to national security, like semiconductors and rare earths. Warrants, revenue-sharing, and direct equity in U.S. companies are some other ways that have been used.
After news that Washington would add equity to the reworked loan, Lithium Americas shares shot up. They went up again after the Department of Energy made the deal official.
Investors think that a clearer path to funding and a visible U.S. government backstop will lower the risk of the project.
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The Investment Canada Act lets the government look into any investment that involves critical minerals and is big enough to affect national security. In real life, the government can set conditions, ask for promises, or try to stop a deal.
Any action would probably take into account the small size of the U.S. stake, the precedent it sets, and the fact that trade and industrial policy are already causing problems between the two countries.
