Canadian firm’s shares rally 90% on reports of potential US government stake

Canadian Lithium Americas stock exploded Wednesday's trading, following reports that the US administration was considering acquiring a stake in the mining company.

The company's Toronto-traded shares (LAC) surged 90.20% to 8.06 Canadian dollars ($5.81 US dollars) at 4:53 p.m. Makkah time, and the New York-traded shares also rose by a similar amount.

CNBC quoted a White House official as saying that the US administration is seeking a stake in the company as Lithium Americas renegotiates the terms of a $2.2 billion loan from the Department of Energy.

This is the latest move by the White House to directly acquire a vital mineral supply chain for the United States, but it would be the first such stake in a Canadian company.

The US Department of Defense acquired a 15% stake in MP Materials, a rare earth metals mining company, in July, and its stock has more than doubled since the deal.