Neometals Ltd. delayed the feasibility study for its proposed 10,000-tonne-per-year lithium hydroxide processing plant in Kalgoorlie, Western Australia, due to higher-than-expected capital costs and weak market conditions.

The company said March 18 it is delaying the study because the "capital intensity" of the project will be higher than what early studies had shown and due to fears of oversupply in the global lithium market pushing down prices.

City of Kalgoorlie CEO John Walker said he was not worried about the future of the project as this appears to be nothing more than a slight delay, according to The West Australian.

The company will continue to advance engineering and approval processes for longer-term strategic outcomes.

Neometals recently sold its 13.8% interest in the Mount Marion lithium mine in Western Australia's Goldfields region, with Mineral Resources Ltd. increasing its equity stake to 50% from 43.1% by paying A$51.9 million. The remaining interest is held by Ganfeng Lithium Co. Ltd.