Lithium Americas Corp. [LAC-TSX, NYSE] on Friday Mar 20 said construction activities at its Cauchari-Olaroz lithium project in Jujuy, Argentina has been temporarily suspended. The company said the decision was taken in accordance with government mandated restrictions in response to COVID-19.
“On March 19, 2020, the government of Argentina enacted the Urgency Decree (DNU) No. 297/20 ordering, among other provisions, a national mandatory quarantine effective from March 20, 2020, until March 31, 2020,” Lithium Americas said in a press release.
“Accordingly, development work at Cauchari-Olaroz will be suspended immediately and the project will be placed on care and maintenance,” it said. “COVID-19 medical safety procedures have been implemented at site and at the Jujuy office, and no employees are currently identified as infected with the COVID-19 virus.”
The share price declined on the news, falling 9.4% or 34 cents to $3.24. The shares are currently trading in a 52-week range of $2.91 and $8.
Lithium Americas and Chinese partner Ganfeng Lithium Co. Ltd. have been working to advance the Cauchari-Olaroz Project with target production of 40,000 tonnes per annum of battery-quality carbonate development plan. The Cauchari-Olaroz Project is located in the heart of the Puna Plateau, an area where over 80% of the world’s lithium brine reserves are located. This area is also known as the “Lithium Triangle.”
“Construction is approximately 36% complete, as of the end of February, 2020, and continues to advance on budget,” the company said recently
“The development plan contemplates that construction will be substantially mechanically complete by the end of 2020,” the company said.
However, Lithium Americas recently said it is aware that there will be delays of up to 90 days in the delivery time for some of these items as a result of the recent Covid-19 outbreak. On Friday the company said it has decided to put the emphasis on safety in support of government measures. “Our focus is on the safety and health of our employees, contractors and local communities,” said Lithium Americas President and CEO Jon Evans.
“We are in the process of safely demobilizing the over 1,000-person construction work force in support of the government of Argentina’s measures to control the spread of COVID-19.
Lithium Americas said it expects to be able to resume construction whenever the suspension is lifted. Meanwhile, the suspension of construction may impact the company’s previous estimate for completion by early 2021, it said.