The US government is set to acquire a stake in Lithium Americas (LAC), Secretary of Energy Chris Wright said Tuesday on Bloomberg TV, in a major support to the company's lithium project development in Nevada.

Shares in the company rose nearly 35% in recent after-market hours trading.

The deal comes amid a score of efforts by the Trump administration to strengthen the domestic supply chain against reliance on China for metals critical to defense, automaking and consumer electronics.

The US Defense Department in July had announced a $400 million equity investment in MP Materials (MP) to finance a new plant for rare-earth magnets, the report added.

Lithium Americas is working alongside General Motors (GM) in a joint venture to build the Thacker Pass project in Nevada, in a bid to make one of North America's largest sources of lithium chemicals.

Both companies have been in talks with the Energy Department regarding conditions for accessing a $2.3 billion federal loan, Bloomberg added.

Lithium Americas did not immediately respond to MT Newswires' request for comment.

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