Lithium Americas, which is developing lithium projects in Argentina and the US, is contemplating a smaller Phase 1 operation at its Thacker Pass project, in Nevada, with its production plan slashed by one-third.

The Vancouver-based company said on Wednesday that it had started a definitive feasibility study (DFS) for a Phase 1 production capacity of 20 000 t/y of battery-quality lithium carbonate-equivalent (LCE).

This compares with the 2018 prefeasibility study’s planned Phase 1 production of 30 000 t/y at a capital cost of $581-million, as part of a larger 60 000 t/y operation that will cost $1.06-billion.

The DFS should be completed by mid-2020, the company said. A formal financing process, including a potential joint venture partner, would start next year.

The scaled back plan for Thacker Pass comes as lithium prices have crashed in recent months. Propelled by strong demand from the lithium-ion battery industry and uncertainty over future supply, prices exploded between 2016 and 2018, prompting widespread interest and investment in lithium projects.

Australia has opened six spodumene mines in only three years and is now the leading producer of mined lithium units. But, as the lower-price environment set in, several curtailments have been announced, including at mines owned by Pilbara Minerals, Albemarle and Alita Resources.

Analysts speaking at S&P Global Platts’ recent Battery Metals Conference, in San Francisco, said that at least 120 000 t of LCE production would need to be delayed to prevent oversupply persisting in the coming 12 months.

Meanwhile, Lithium Americas announced it had partnered with Sawtooth Mining, a subsidiary of NYSE-listed Nacco Industries, and The North American Coal Corporation, in a long-term mining contract to provide mine engineering, construction, operation and reclamation services, as well as certain equipment.