KEY POINTS
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Thacker Pass Phase 1 cost rises 31% to $3.83bn.
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Higher labour, construction and logistics costs drive the increase.
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Commercial production is expected to begin ramping up in 2028.
Lithium Americas has increased the estimated cost of the first phase of its Thacker Pass lithium project in Nevada, United States, by 31% to $3.83 billion, citing rising labour, construction and logistics expenses.
The revised estimate represents an additional $895 million in capital expenditure compared with the previous projection. The company also said the increase would raise the project’s overall funding requirement by approximately $995 million.
The announcement was made on Wednesday, November 11, as the company faces higher costs associated with developing the lithium mine. Its shares fell 6.3% during morning trading following the announcement.
Higher construction and labour costs drive increase
Lithium Americas attributed much of the cost increase to higher installation rates for piping, steel and equipment, as well as increased logistics and tariff expenses.
Higher labour and installation costs accounted for approximately $245 million of the additional expenditure, while tariffs and logistics contributed about $100 million.
The company said these pressures had increased the amount required to complete the first phase of the project.
Lithium Americas now expects to spend between $1.7 billion and $2 billion on Phase 1 during 2026. This is higher than its previous estimate of between $1.3 billion and $1.6 billion for the year.
Company outlines funding plans
Despite the higher cost estimate, Lithium Americas said it expects to meet the additional funding requirement through contributions and available loan reserves from the US Department of Energy.
The company had approximately $1.3 billion in cash and restricted cash as of September 30. This included about $360 million held within the Thacker Pass joint venture.
The revised funding requirement comes as the company continues development of the project alongside General Motors, the US automobile manufacturer.
Production expected to begin in 2028
Thacker Pass is a joint venture between Lithium Americas and General Motors. The project is expected to begin ramping up to commercial production in 2028.
At full capacity, the first phase is designed to produce approximately 40,000 tonnes of lithium annually.
The deposit is considered a significant source of lithium for the electric vehicle industry, with the project holding enough resources to support the production of batteries for about one million electric vehicles annually.
The development is expected to support the supply of lithium for electric vehicle batteries as manufacturers seek reliable sources of the mineral.
However, the latest cost revision adds to the financial demands facing the project as it moves towards its planned production start.
