The largest lithium mine in the United States is about to begin production, heralding a reshaping of the lithium supply chain.

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A clay-type lithium mine that has never been mined on a large scale is becoming a critical bet for the United States to reshape its domestic metal supply chain.

According to the latest report from The Information, the Thacker Pass mine in Nevada, developed by Lithium Americas, is the largest known lithium deposit in the United States. The first phase of production at the mine is expected to start by the end of next year, at which point the annual output will reach ten times the current lithium production in the U.S.

General Motors (GM) has already secured all the output from the first phase of the mine for 20 years in advance, corresponding to battery requirements for about 850,000 electric vehicles, or an equivalent amount for batteries used in AI data centers, drones, robots, and military equipment. At the same time, the U.S. government holds a 5% stake in Lithium Americas and a 5% independent interest in the Thacker Pass mine, and is providing $2.2 billion in low-interest loans through the Department of Energy, jointly funding the project with GM.

However, since peaking at about $10 last October, Lithium Americas' stock price has fallen 56%, and so far this year is down 8.3%. The market's concerns point to one issue: the lithium resource at this mine is embedded in clay layers, and this extraction process has never been proven at commercial scale.

U.S. Government Investment: Making Mining a National Strategy

The Trump administration defined metal demand from defense and AI data centers as a new strategic priority, and took a series of unusual steps—directly holding equity in metal companies.

In addition to Thacker Pass, the government also holds a 15% equity stake in MP Materials, a rare earth metal developer in Nevada. Lithium Americas CEO Jon Evans said this policy backdrop has fundamentally changed the market landscape: "From last summer to this summer, the whole situation is completely different. Now it's more balanced, because this isn't just about EVs; we've already become a part of energy security policy."

GM's investment is $625 million, in exchange for a 38% equity stake in the mine. Most of these funds are used to purchase equipment that will process the ore into lithium carbonate—lithium carbonate is a key material for LFP (lithium iron phosphate) batteries, widely used for energy storage in data centers and grid backup. Evans also equipped the plant with a steam turbine, which can provide about half of the site's electricity.

Clay Lithium Extraction: Core Technical Uncertainties

Currently, almost all global lithium mining comes from two sources: hard rock spodumene and salt lake brine. Thacker Pass's lithium is embedded in clay layers, which is a third method, but has never been validated on a commercial scale.

This is the biggest concern of investors. In comparison, Australian lithium miners Mineral Resources, PLS Group, and Liontown Resources have risen 25%, 36%, and 22% respectively so far this year, all being traditional spodumene miners. Lithium Americas' stock performance is quite the opposite.

Evans admits that this uncertainty will continue to suppress the company's valuation until actual production appears. He said bluntly: "As soon as I produce the first ton of lithium, the valuation will be repriced, because the market always has the question 'Can you really do it?'."

Chris Berry, president of metal research firm House Mountain Partners, shares a similar view: "The market is waiting to see whether there will be delays or initial teething problems."

Notably, Evans said that several independent due diligence experts, including those from the Department of Energy, have reviewed the company's mining plan and deemed the technical approach feasible.

Second Phase: Demand Already Queuing Up

Beyond the first phase of Thacker Pass, the second phase plans to extract and process another 40,000 tons of lithium in the next decade. GM has obtained the right of first refusal for 38% of production in this phase, and holds an option to buy the remaining output.

But GM is not the only buyer. Evans revealed that several companies have expressed interest in second-phase supply, with one even offering a $100 million prepayment.

Berry said: "Many people in Washington are closely watching Lithium Americas, and I believe the list of potential customers will be long."

In addition, Bloomberg New Energy Finance research points out that the continued decline in battery costs has made battery energy storage for the grid and AI data centers cheaper than gas turbines, now comparable to cheap coal-fired power generation. This trend further strengthens the strategic value of lithium resources.

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