Elevra’s Revised NAL Expansion Raises Unit Costs but Keeps Strong Returns

Accelerated Expansion Strategy

Elevra Lithium Limited has announced a significant refinement to its North American Lithium (NAL) mine expansion program, introducing a staged approach designed to fast-track production increases and reduce operating costs. The company aims to ramp up spodumene concentrate output to 315,000 tonnes per annum (ktpa) by early 2029, advancing the timeline by approximately two years compared to previous plans.

This accelerated pathway leverages new permitting information alongside existing approvals, enabling Elevra to sidestep previous regulatory bottlenecks that constrained the project’s critical path. By adopting a series of incremental debottlenecking steps, Elevra plans to increase production capacity in manageable phases, spreading capital expenditure and lowering upfront investment requirements.

Phased Production Increases

The expansion will unfold in three key stages. First, an initial 15-20% production increase is expected to commence by mid-2027, operating within current milling permit limits. This phase will deliver an early reduction in unit operating costs. The second stage, targeted for early 2028, involves expanding milling, flotation, and filtration capacity to 6,500 tonnes per day, supported by a temporary mobile crushing circuit. Finally, by early 2029, a new crushing and ore sorting circuit will replace existing infrastructure, optimising feed processing and further reducing costs to meet the life-of-mine production target.

Cost Revisions and Economic Outlook

During the review process, Elevra identified a reallocation of site general and administrative costs, which increased the forecast C1 unit cash costs to US$630 per tonne from the previously reported US$562. Despite this adjustment, all-in sustaining costs remain steady at US$680 per tonne. Importantly, key economic indicators such as a net present value (NPV) of approximately US$950 million and an internal rate of return (IRR) of 26.4% remain robust, underscoring the project’s strong financial fundamentals.

The company plans to release an updated scoping study in early Q2 2026, which will provide detailed operating and capital cost breakdowns for the staged expansion phases. Concurrently, Elevra will advance into detailed engineering to expedite the debottlenecking steps, signalling a confident move towards value creation.

Strategic Implications

Elevra’s disciplined and pragmatic approach reflects a broader industry trend towards modular, low-risk expansions that balance growth ambitions with capital discipline. By accelerating incremental production and deferring some capital outlays, Elevra positions itself to better respond to evolving lithium market dynamics and demand forecasts. The brownfield nature of the expansion further reduces execution risk, providing investors with greater confidence in delivery timelines and cost control.