Lithium Americas sees $100M Thacker Pass cost hike from tariffs, Iran war

Lithium Americas (TSX, NYSE: LAC) is estimating that U.S. steel tariffs and the Iran war will add $80 million to $120 million to this year’s construction expense for the Thacker Pass project in Nevada. 

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. The company’s total $2.93-billion capex estimate didn’t consider tariffs.

Lithium Americas “will incorporate recent unexpected developments including the implications of tariffs, the Middle East conflict impacts, fuel price increases and other inflationary increases,” it said in the release. “The majority of which [are] expected to be incurred during 2026.”

The company is keeping its targeted late-2027 completion of what is poised to become one the Western Hemisphere’s largest lithium sources. The project has drawn strategic backing from General Motors (NYSE: GM), Orion Resource Partners and the U.S. government, showing the Trump administration’s drive to erode China’s dominance in critical metals. 

New estimate 

The company 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.

Lithium Americas said more than three-quarters 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.

Thacker Pass is slated to produce enough lithium for 800,000 electric vehicles a year. More than 1,300 workers are now on site, with peak construction expected to exceed 2,000.

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

“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,” Evans said in the release.

Strategic push

Thacker Pass’ scale and political backing highlight how aggressively the U.S. is pushing to secure domestic supplies of battery metals as tensions with China intensify. The U.S. government last year took separate 5% stakes in both the company and project. 

Once complete, the mine is expected to produce 40,000 tonnes of lithium carbonate annually, well above output from Albemarle’s (NYSE: ALB) Silver Peak mine, currently the only operating lithium brine mine in the U.S.

Lithium Americas ended the quarter with about $1.2 billion in cash and restricted cash. That included $529 million at the Thacker Pass joint venture level after receiving another $432-million advance from a Department of Energy loan facility.