Rio Tinto's Nemaska lithium processing plant in Bécancour, Que.Christinne Muschi/The Canadian Press
Rio Tinto Group RIO-N is slowing the pace of construction of its Nemaska lithium processing plant in Bécancour, Que., this year as the company works to get a handle on cost overruns and put it back on course toward completion.
Adjustments are needed “to set the project on a stronger and more sustainable path,” the Anglo-Australian mining giant said in an update provided Friday.
Construction is expected to ramp-up again once that work is done and there shouldn’t be any major changes to a planned production start for the facility in 2028, the company said.
Rio Tinto took majority control of Nemaska Lithium Inc. last month as it presses ahead with an expansion of its critical-mineral holdings. It owns a roughly 54-per-cent stake while the Quebec government holds the rest.
The company said it remains committed to the lithium project, which also includes plans to source spodumene, a lithium-bearing hard rock, from one of two deposits in Quebec’s north. It has pledged to invest US$300-million in its Quebec lithium business this year.
Total capital costs for the Nemaska lithium development project were pegged at US$2.2-billion, according to a calculation based on Rio Tinto’s published financials for fiscal 2025. That figure will now likely be reviewed.
Executives with Rio Tinto are bullish on lithium as demand increases for stationary energy-storage units and electric vehicles, but they’re pulling back on the speed of development of that resource amid uncertainty over supply conditions. Last year, the company mothballed a US$2.3-billion lithium project in Serbia known as Jadar.
The Bécancour plant is more than 70-per-cent complete, and some 1,600 tradespeople were working on the facility’s construction before Friday’s announced reset. Contractor work-force levels will be temporarily reduced over the coming weeks, Rio Tinto said in the update.
Lithium is a key raw material in electric-vehicle batteries.