(Adds details on project, background)
Jan 23 (Reuters) - Australia's Wesfarmers Ltd WES.AX has delayed its final investment decision on the Mt Holland lithium project by a year to the first quarter of 2021, it said on Thursday, as it focuses on cost-cutting amid weakening prices of the metal.
The decision follows a review in November of a feasibility study run by Covalent Lithium, a joint venture between Wesfarmers and Sociedad Quimica y Minera de Chile SA SQMA.SN , one of the world's largest producers of lithium products.
Wesfarmers Managing Director Rob Scott in a statement that the deferral would help to optimise project design, leading to a clearer decision-making process next year.
"Once completed, the project is expected to play an important role in the global lithium hydroxide market, with a long-term outlook that remains attractive," he said.
Australian lithium miners faced severe pressure last year from plummeting prices of the metal, as demand from Chinese customers fell after a cut in the country's electric vehicle subsidies amid Sino-U.S. global trade tensions.
In May last year retail conglomerate Wesfarmers acquired the now de-listed Kidman Resources, deepening its exposure to high-tech minerals, and bought a 50% stake in the Mt Holland project as a part of the acquisition. in the day, another Australia-based lithium miner Galaxy Resources GXY.AX said it would scale back operations by about 60% at its flagship Mt Cattlin mine in 2020, focusing on cost reduction.