By Ernest Scheyder
Sept 25 (Reuters) - Lithium Americas Corp 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 and other automakers launch ambitious EV plans.
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.
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, for instance, is a large lithium consumer. The London Metal Exchange plans to launch a lithium pricing contract in the near future.
Lithium Americas also said on Wednesday it has hired Nacco Industries Inc 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 , 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.
"If we don't start embracing this new technology, we are going to be left behind," Cortez Masto said. ($1 = 7.1138 Chinese yuan renminbi) (Reporting by Ernest Scheyder Editing by Shri Navaratnam)