Australia’s next big lithium mine will cost 45 per cent more than previously expected because of inflationary pressures in the resources sector, but the proponent Liontown Resources said the $473 million spend would deliver a bigger project that was producing sooner to take advantage of an earlier lithium shortage.

An option to build a $1.5 billion refinery to make battery-grade lithium at the same Western Australian site will also cost 37 per cent more than was expected last year, and concerns over how the pre-revenue company would fund its $2 billion plans triggered a 12 per cent share price slump on Thursday.