Lithium Americas trims production target, budget for Nevada mine

NACCO Industries

25/09/2019 12:00

By Ernest Scheyder
    Sept 25 (Reuters) - Lithium Americas Corp  LAC.TO  has cut
its budget and production target for a proposed Nevada mine
amidst growing concern of a global supply glut for the white
metal, a key ingredient used to make electric vehicle batteries.
    The announcement on Wednesday from the British
Columbia-based company comes as lithium prices plummet in China,
the world's largest consumer of the metal, due to fears of
supply  exceeding demand, even as Rivian Automotive LLC,
Volkswagen AG  VOWG_p.DE  and other automakers launch ambitious
EV plans. urn:newsml:reuters.com:*:nL2N26A0WH
    Lithium Americas said it now plans to spend $400 million on
the first phase of its Thacker Pass project with output of
20,000 tonnes of lithium annually. The company had previously
forecast a $581 million budget for the first phase with annual
output of 30,000 tonnes. The mine is expected to open by 2023.
    "People are really preoccupied with pricing, but they're
just looking at spot pricing in China, which is only part of the
market," Chief Executive Jon Evans told Reuters. "The demand
picture remains strong." 
    A wave of new supply and Chinese EV subsidy cuts have sent  
lithium hydroxide prices  AM-LIOH0002-LHM , as assessed by
industry information provider Asian Metal, plummeting 36.8% this
year to 67,000 yuan ($9,418.31) a tonne. urn:newsml:reuters.com:*:nL2N23I0NQ
    Still, there is no global pricing standard, much to the
chagrin of miners who see China as only part of the global
demand picture. Japan's Panasonic Corp  6752.T , for instance,
is a large lithium consumer. The London Metal Exchange plans to
launch a lithium pricing contract in the near
future. urn:newsml:reuters.com:*:nL8N23H3DN
    Lithium Americas also said on Wednesday it has hired Nacco
Industries Inc  NC.N  to build and run Thacker Pass, where
lithium is found in clay rock. The company plans to use a
proprietary acid leaching process to extract the lithium.    
    Nacco will fund $50 million for mining equipment, funds that
will be repaid by Lithium Americas once the mine is operational.
    Lithium Americas, which is developing a brine lithium
project in Argentina with China's Ganfeng Lithium Co
 002460.SZ , has not yet secured financing for Thacker Pass, a
process expected to begin next year. 
    Lithium Americas plans to host U.S. Senator Catherine Cortez
Masto, a member of the Senate's Energy and Natural Resources
Committee, this Friday at the Nevada mine site. 
    The Democratic senator voiced her support last week for
pending federal legislation to streamline permitting for new
mines. urn:newsml:reuters.com:*:nL2N26A19N
    "If we don't start embracing this new technology, we are
going to be left behind," Cortez Masto said. urn:newsml:reuters.com:*:nL2N2680R8
($1 = 7.1138 Chinese yuan renminbi)

 (Reporting by Ernest Scheyder
Editing by Shri Navaratnam)
 ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder;
+1-713-210-8512; Reuters Messaging:
ernest.scheyder.thomsonreuters.com@reuters.net))