The Biden administration is considering major investments in battery supply chain.Lithium Americas stock has added another 1.5% to Wednesday's 11.9% spike and is now trading at $37.40 on Thursday morning. News emerged on Wednesday that the Biden administration is close to investing as much as $750 million to encourage the production of metals critical for the battery industry, especially lithium. The lithium miner has seen its share price rise 20% year to date and 157% over the past year.
Global demand for lithium currently clocks in at around 320,000 metric tonnes annually, and the US currently imports more than half of its total demand. Forecasts predict that this figure could balloon to 2 million metric tonnes as soon as 2030 however. China also contains much of the world's rare earth and other metals used in the newest batteries, so experts see this policy focus as part of the US's overall competitive strategy with regards to China.
The Defense Production Act gives the president the right to utilize $750 million to increase domestic production. This comes on top of $6 billion already allocated in President Biden's infrastructure bill to improve the country's domestic battery supply chain. Lithium America's Thacker Pass mine is slated to enter production later this year, so observers think the producer is most likely to receive funds to speed up development.
The US currently produces about 2% of the world's lithium, but that should greatly increase once Thacker Pass comes online. Thacker Pass has more than 1 million metric tonnes in economically feasible reserves. Back in January, Lithium Americas issued 13.2 million shares in order to acquire Millenial Lithium Corp., which owns the Pastos Grandes lithium brine project in Salta, Argentina. That project is expected to produce 24,000 tonnes of lithium carbonate annually. The current price of lithium averaged $76,700 per metric tonne in mid-March, according to Oilprice.com. The price has nearly doubled so far this year and traded at just $13,400 one year ago.