Lithium Americas raises Thacker Pass cost estimate by 31% to $3.83bn

Detailed summary

Lithium Americas on Wednesday increased its cost estimate for its flagship Thacker Pass lithium project to $3.83 billion, an increase of 31 per cent, the company said, giving…

Lithium Americas on Wednesday increased its cost estimate for its flagship Thacker Pass lithium project to $3.83 billion, an increase of 31 per cent, the company said, giving higher labour, ⁠construction and logistics costs as reasons.

The company said the revised budget adds $895 million in capital costs and raises the Nevada-based project's funding requirements by about $995 million. It said it expects the additional funds to be met through company contributions and available loan reserves from the US Energy Department.

The company's shares plunged more 8 per cent during Wednesday trading.

Lithium Americas chief executive Jonathan Evans said Phase 1 construction on the project is planned for late 2027, increasing throughout 2028.

“Despite external and internal factors impacting the project’s capital cost estimate, the anticipated capital cost for Thacker Pass is expected to remain funded as we continue to deliver on our execution plan and bring the project safely into production,” Mr Evans said in a statement.

The Canada-based company said labour installation rates for piping, steel and equipment accounted for $245 million of the increase, with tariffs and logistics adding a further $100 million. Logistics costs have been heavily affected by rising fuel prices, challenges to global and national shipping conditions and reduction in the availability of US fabrication.

The Thacker Pass mine, a joint venture with General Motors, is one of the largest known lithium deposits in the US. Lithium Americas said it expects Thacker Pass to produce 40,000 tonnes a year of battery-quality lithium carbonate when at full capacity. Lithium carbonate is critical for electric vehicles.

Total global demand for rechargeable chemical batteries is expected to more than quadruple from 2023 levels by 2030, according to an analysis from the Centre for Strategic and International Studies.

The Silver Peak Lithium Mine is the only active, commercial-producing lithium mine in the US and generates…

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