Thacker Pass lithium project cost jumps 31% to $3.83B

Lithium Americas (TSX, NYSE: LAC) has raised the estimate for the first stage of its Thacker Pass lithium project in Nevada by 31% to $3.83 billion (C$5.43 billion), citing higher labour, construction and logistics expenses.

The revised budget adds $895 million in capital costs and increases the funding requirement by about $995 million, the company said Wednesday. Mechanical completion remains targeted for late 2027, with commercial production expected in 2028.

“Thacker Pass is on track to deliver America’s largest fully integrated source of domestic battery-quality lithium carbonate, and we are building it at pace,” CEO Jonathan Evans said in a statement. “Phase 0ne is advancing toward peak construction activity by year end 2026, with mechanical completion targeted for late 2027.”

The financing plan would increase Lithium Americas’ stake in its joint venture with General Motors (NYSE: GM), giving the developer a larger interest as it contributes more capital. The ownership changes are still being finalized with GM and the US Department of Energy (DOE), the company said.

Labour drives increase

Labour and staffing account for $645 million of the increase, including $245 million for installing piping, steel and equipment. Higher craft wages and incentives, additional engineering and construction staff, and increased contractor wage rates make up the balance.

Tariffs and logistics add $100 million, while additional contingency accounts for $150 million. Estimated tariff exposure alone has fallen to about $60 million from the previously forecast $80 million to $100 million, the company said.

Lithium Americas now expects to spend $1.7 billion to $2 billion on the first stage in 2026, up from its previous forecast of $1.3 billion to $1.6 billion.

Thacker Pass, about 100 km northwest of Winnemucca in northern Nevada, is designed to produce 40,000 tonnes of battery-grade lithium carbonate annually in its first stage. It is among the projects advancing to expand US lithium supply.

Funding plan

Lithium Americas expects to address the additional funding requirement through a $650-million contribution to the joint venture, $315 million available in DOE loan reserve accounts and a $30-million reduction in required sustaining-capital reserves under a loan amendment signed Nov. 10.

The company held about $1.3 billion in cash and restricted cash at Sept. 30, including about $360 million at the joint venture. Those figures are preliminary and unaudited.

Lithium Americas shares traded 8.2% weaker at C$2.47 in Toronto mid-Wednesday, valuing the company at about C$897 million. The shares have traded between C$2.43 and C$9.47 over the past 12 months.