Lithium Americas (TSX:LAC) has increased the cost estimate for the first phase of its Thacker Pass project in Nevada, US, by more than 30%, citing rising labour, construction, and logistics costs.
In an update on Wednesday (11 November), the company said Thacker Pass Phase 1 is now expected to cost US$3.83 billion ($5.57 billion), up from its previous estimate of US$2.93 billion.
The increase of approximately 31% also reflects tariffs and an additional contingency allowance.
Lithium Americas estimates it will require an additional US$995 million in funding to cover the higher capital costs, as well as sustaining capital reserves, and other expenses.
The company expects to meet that requirement through its own contributions, reserves under its US Department of Energy (DOE) loan facility, and changes to reserve funding requirements.
CEO Jonathan Evans said the project’s anticipated capital costs are expected to remain funded despite a combination of “external and internal factors”.
Construction remains on track
Thacker Pass Phase 1 continues to progress towards peak construction activity by the end of 2026, according to Lithium Americas.
Mechanical completion is targeted for late 2027, with production expected to ramp up towards commercial levels in 2028, the company says.
Located in Humboldt County, Nevada, Thacker Pass is being developed as one of the largest domestic sources of battery-grade lithium carbonate in the US.
The project hosts what Lithium Americas describes as the world’s largest known measured and indicated lithium resource. Its expansion plan is based on an estimated 85-year mine life.
The Phase 1 processing plant is designed to produce 40,000 tonnes of lithium carbonate annually. Long-term plans call for expansion in multiple phases to a total capacity of 160,000 tonnes per year.
“Lithium is a strategic asset, and Thacker Pass is the nation’s clearest near-term path to a reliable domestic supply,” Evans says.
US government backing
Thacker Pass is backed by a US$2.23 billion DOE loan facility. The US Government also holds warrants to acquire equity in Lithium Americas and the project joint venture (JV).
The project is being held through a JV with General Motors (NYSE:GM), which currently has a 38% interest and offtake rights to part of its future lithium production.
Following the revised estimate, Lithium Americas is targeting capital expenditure of between US$1.7–2 billion for Thacker Pass Phase 1 during the 2026 financial year.
The company is also working with the DOE and General Motors regarding the implications of the increased project costs.
Write to Jackson Chen at Mining.com.au
Main Image: Lithium Americas
