What happened
Shares of lithium mining start-up Lithium Americas (LAC) have jumped 12.1% as of 12:15 p.m. ET Wednesday.
You can thank Joe Biden for that.
Image source: Getty Images.
So what
As Bloomberg reports this morning, the U.S. president may invoke the Defense Production Act (DPA) of 1950 "to encourage domestic production of critical minerals for electric-vehicle and other types of batteries" -- and in particular, the production of lithium -- as early as tomorrow.
Bloomberg notes that the DPA contains provisions permitting the government to utilize a $750 million "Title III Fund" to subsidize measures to increase domestic production of strategically important metals and minerals such as lithium (and nickel, graphite, cobalt, and manganese besides). Among other activities, the monies could be spent to "fund production at current operations, productivity and safety upgrades, and feasibility studies."
Oh, and all of this money would be on top of the $6 billion already allocated in the president's infrastructure bill to develop a domestic "U.S. battery supply chain" to lessen U.S. reliance on China to supply these strategic raw materials.
Now what
Bloomberg cautions that while invoking the DPA would "elevate battery metal projects, it does not speed up the permitting process to get mines approved" -- so no joy for Lithium Americas on that front, with respect to accelerating development of its Thacker Pass, Nevada, lithium project. Then again, Lithium Americas has already made a lot of progress there, and expects to begin construction later this year.
As the Associated Press notes, Lithium America's Thacker Pass project is the "new lithium mining project closest to development" in the continental U.S. It's logical to assume, therefore, that it would be the one receiving the most immediate benefit from the president invoking the DPA. Lithium Americas stock going up on this news today therefore makes a lot of sense.
