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Lithium Americas sees up to $120M tariff hit on Thacker Pass

Lithium Americas sees up to $120M tariff hit on Thacker Pass

Mining.comMining.com2026/05/15 14:15
By:Mining.com

Lithium Americas (TSX,NYSE: LAC) says US tariffs on steel, inflation linked to the conflict in Iran and shipping disruptions around the Strait of Hormuz, could add $80 million to $120 million to construction costs at its Thacker Pass lithium project in Nevada, with most of the impact expected this year.

The figures came amid its first-quarter results on Thursday as the company nears detailed engineering completion and procurement surpasses 70%. The project’s first stage forecast is still budgeted to cost $1.3 billion to $1.6 billion.

Lithium Americas flagged the fact that the original $2.93-billion capital estimate for Phase 1 did not include tariffs, fuel-price increases or inflation tied to the conflict in the Middle East. The company has now started work on a definitive capital estimate that will incorporate those pressures along with updated labour and procurement data, it said.

More than 75% of structural steel for the project, sourced from the United Arab Emirates, is either in transit or already at site after shipments were rerouted through Saudi Arabia’s Port of Jeddah to avoid regional disruptions. Major long-lead equipment including transformers, reactors and steam turbine components is also arriving.

Despite the higher-cost risks, Lithium Americas said construction continues to accelerate toward mechanical completion in late 2027. More than 1,300 workers are currently on site, with peak construction expected to exceed 2,000.

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The company also said it has begun work on a definitive capital estimate that will account for tariffs, inflation, fuel costs and disruptions linked to Middle East shipping routes.

“At a moment when resilient domestic supply chains are more critical than ever, lithium stands out as a strategic resource underpinning both national security and a reliable energy future,” CEO Jonathan Evans said in the release.

Supply-chain risks

Lithium Americas said more than 75% of structural steel for the project is either in transit or already at site after shipments were rerouted through Saudi Arabia’s Port of Jeddah to avoid disruptions tied to the Strait of Hormuz conflict. Major long-lead equipment including transformers, reactors and steam turbine components is also arriving.

The company estimates tariff exposure for Phase 1 construction at $80 million to $120 million, most of which is expected this year. Construction has also started on a transload terminal near Winnemucca that will support reagent deliveries once the mine enters production.

Strategic push

Thacker Pass’ scale and political backing highlight how aggressively the US is pushing to secure domestic supplies of battery metals as tensions with China intensify. 

Once complete, the mine is expected to produce 40,000 tonnes of lithium carbonate annually, enough for roughly 800,000 electric vehicles and well above output from Albemarle’s (NYSE: ALB) Silver Peak mine, currently the only operating lithium brine mine in the US.

The project has drawn strategic backing from General Motors (NYSE: GM), Orion Resource Partners and the US government, which last year took separate 5% stakes in both Lithium Americas and the Thacker Pass project itself. Lithium Americas ended the quarter with about $1.2 billion in cash and restricted cash, including $529 million at the Thacker Pass joint venture level, after receiving another $432-million advance from a Department of Energy loan facility.

Evans said lithium market conditions are improving ahead of the project’s expected startup in late 2027 and ramp-up through 2028.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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