Lithium Americas Raises Thacker Pass Phase 1 Capital Cost Estimate to $3.83 Billion

Lithium Americas Corp. (NYSE:LAC) has increased its estimated capital cost for Phase 1 of the Thacker Pass lithium project in Humboldt County, Nevada, to $3.83 billion, representing a $900 million increase from its previous estimate of $2.93 billion.

The revised estimate reflects higher labour costs, tariffs, logistics expenses, engineering and construction management requirements, and additional contingency provisions.

Despite the increase in projected expenditure, Lithium Americas continues to target mechanical completion of Phase 1 in late 2027, with commercial production ramp-up expected during 2028.

The project is designed to produce 40,000 tonnes of battery-quality lithium carbonate annually once it reaches full operating capacity.

Capital Cost Estimate Increases by Approximately 31%

Lithium Americas revised its Phase 1 capital expenditure estimate from $2.93 billion to $3.83 billion, an increase of approximately 30.7%.

The company attributed the higher estimate to several factors affecting construction and project execution.

Tariffs and logistics expenses are expected to contribute approximately $100 million to the increase, while inflation in craft labour wage rates accounts for approximately $150 million.

Higher labour installation rates for piping, structural steel and equipment are expected to add approximately $245 million.

Additional engineering, procurement and construction management staffing requirements are estimated at approximately $100 million, while contractor staff wage inflation is expected to contribute another $150 million.

The company has also included approximately $150 million in additional contingency provisions.

These individual cost adjustments total approximately $895 million, broadly corresponding to the $900 million increase in the overall capital estimate.

Thacker Pass Construction Schedule Remains Unchanged

Lithium Americas maintained its target for mechanical completion of the Thacker Pass Phase 1 project in late 2027.

The company expects the facility to progress through commissioning and production ramp-up during 2028.

At full capacity, Phase 1 is designed to produce approximately 40,000 tonnes of battery-quality lithium carbonate per year.

Lithium carbonate is used in the manufacture of lithium-ion batteries, including those used in electric vehicles and energy storage applications.

The Thacker Pass development is located in Humboldt County, Nevada, and is being advanced through a joint venture involving Lithium Americas and General Motors.

The company did not announce a change to its production capacity target or the anticipated timing of mechanical completion alongside the revised capital estimate.

Additional Funding Requirement Estimated at $995 Million

Lithium Americas estimates that approximately $995 million in incremental funding will be required to support the updated Phase 1 capital expenditure programme.

The company expects the additional funding requirement to be addressed through a combination of contributions to the Thacker Pass joint venture and available financing arrangements.

Approximately $650 million is expected to come from Lithium Americas through contributions to its joint venture with General Motors.

A further $315 million is expected to be available from reserve accounts associated with the project’s US Department of Energy loan.

The company also expects an amendment to the DOE financing arrangements to reduce certain reserve funding requirements by approximately $30 million.

Together, these amounts are expected to address the estimated incremental funding requirement.

The revised financing arrangements form part of Lithium Americas’ plans to fund the remaining construction and development activities at Thacker Pass.

Department of Energy Loan Amendment Signed

Lithium Americas announced that an amendment to its US Department of Energy loan was signed on November 10, 2026.

The amendment is expected to reduce the funding requirements associated with the Sustaining Capex Reserve Account by approximately $30 million.

The company also expects to use approximately $315 million from reserve accounts under the DOE loan as part of the funding arrangements for the revised project budget.

These changes are intended to provide additional funding flexibility during the construction phase.

The DOE loan remains an important component of the financing structure supporting the Thacker Pass development.

Lithium Americas did not provide further details in the supplied announcement regarding changes to the loan’s interest rate, maturity or repayment schedule.

2026 Capital Expenditure Guidance Increased

Lithium Americas also revised its capital expenditure guidance for 2026.

The company now expects annual capital expenditure of between $1.7 billion and $2.0 billion, compared with its previous forecast of $1.3 billion to $1.6 billion.

The revised guidance represents an increase of $400 million at both ends of the range.

At the midpoint, expected 2026 capital expenditure has increased from $1.45 billion to $1.85 billion.

The updated forecast reflects the company’s revised construction cost expectations and planned expenditure during the remainder of the financial year.

As of September 30, 2026, cumulative capital expenditure on the project totalled approximately $2.45 billion.

The reported cumulative expenditure represents approximately 64% of the revised $3.83 billion Phase 1 capital cost estimate.

The company’s annual guidance and cumulative expenditure figures provide separate measures of planned spending during 2026 and total project expenditure incurred to date.

Labour Inflation and Construction Costs Drive Revised Estimate

A substantial portion of the increase in estimated capital expenditure relates to labour and construction costs.

Higher craft labour wage rates are expected to contribute approximately $150 million, while increased installation rates for piping, steel and equipment account for approximately $245 million.

Contractor staff wage inflation adds another estimated $150 million.

Together, these three labour-related categories account for approximately $545 million of the revised cost estimate.

Additional engineering, procurement and construction management staffing costs are expected to contribute approximately $100 million.

The company also identified tariffs and logistics expenses as factors affecting the overall construction budget.

The inclusion of an additional $150 million in contingency provisions reflects the revised cost assumptions incorporated into the project estimate.

Phase 1 Development Continues Towards 2028 Production Ramp-Up

Lithium Americas continues to advance construction of Thacker Pass Phase 1 under its revised capital expenditure programme.

The company has maintained its planned late-2027 mechanical completion target and expects production ramp-up to take place during 2028.

The project is designed to produce 40,000 tonnes of battery-quality lithium carbonate annually at full capacity.

The updated capital estimate of $3.83 billion represents an increase of approximately 31% from the previous budget, with higher labour costs and construction-related expenses accounting for much of the adjustment.

Lithium Americas expects to address the estimated $995 million incremental funding requirement through contributions to the General Motors joint venture and financing arrangements associated with the DOE loan.

The company’s revised 2026 capital expenditure guidance of $1.7 billion to $2.0 billion reflects the updated construction budget.

Further project updates will provide information on expenditure, construction progress and the timetable for commissioning and commercial production.

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