Costs at American Lithium's Peru project up to $700 million, CEO says

By Kylie Madry

(Reuters) - Costs of the first phase of construction at American Lithium's Falchani lithium mine in Peru likely have risen some 20% from an original estimate to $700 million, the chief executive of the firm said in an interview. "If you think about the post-COVID world and inflationary pressures, that bill (of $580 million) is probably more like $700 million today," CEO Simon Clarke said. Peru, the world's second-largest copper producer, is vying for a piece of the pie in the booming lithium market. Nearby Chile, Argentina and Bolivia form a so-called "lithium triangle," with massive deposits, but the Canadian-owned Falchani project is currently the only one under way in Peru, where deposits are estimated to be much smaller. The Peruvian government has made it clear "they want to attract other investment to drive the mining sector forward," Clarke said, mentioning drill permit approvals coming in since a government shake-up last year. If all goes according to plan, construction could begin at Falchani by late 2024 or late 2025, Clarke said, to begin production in late 2026 or early 2027. Before that, an environmental impact assessment, which could take another three to six months, and an updated economic assessment need to wrap up.

A new economic assessment will also be carried out to include byproducts potassium, cesium and rubidium, which were not analyzed in the original study, Clarke said.

Clarke said the firm was in talks for investment in the project, adding that it was doing drilling tests in a new area near Falchani after receiving approvals last month. "We're certainly very excited by what we saw on the surface," Clarke said. "We should start to get results from that over the next couple of months."

(Reporting by Kylie Madry; Additional reporting by Marco Aquino; Editing by Sandra Maler)