ASX-listed Infinity Lithium Corporation has taken a significant step in its ambition to develop a major Spanish lithium project with a preliminary agreement to supply a world leading battery manufacturer.
Infinity has signed a non-binding memorandum of understanding with LG Energy Solution for supply of lithium hydroxide from its proposed San Jose lithium project for five years, with potential to extend supply for a further five years.
Infinity is a 75 per cent owner of the San Jose project in Spain’s Extremadura region where it is proposing to build a significant new fully-integrated battery-grade lithium hydroxide operation able to supply about 15,000 tonnes per annum of lithium hydroxide for 20 years or more. San Jose hosts the second largest JORC compliant hard rock lithium deposit in the European Union with an estimated 1.6 million tonnes of lithium carbonate equivalent in the ground.
The project is seen as an important component in the EU’s progress towards a vertically integrated lithium-ion battery supply chain. The production of battery-grade lithium hydroxide is essential to ensuring long-term production of lithium-ion batteries to meet forecast escalating demand for electric vehicles.
Infinity Chief Executive Officer and Managing Director Ryan Parkin said the company welcomed the opportunity to support a leading lithium-ion battery producer in securing essential facets of the supply chain.
LG Energy Solution is a major South Korean manufacturer of lithium-ion batteries with 30 years of experience in advanced battery technology.
The agreement gives LG Energy Solution first right to 10,000 tonnes per annum of product, with additional volumes subject to negotiation. The purchase price will be based on the market price for lithium hydroxide, subject to agreement by both parties and will be finalised under the terms of a binding offtake agreement.
The parties have agreed to consult in good faith towards finalising the binding offtake agreement within the next 12 months. Any formal agreement is likely to be subject to standard conditions for an agreement of this type, including Infinity successfully beginning commercial production and recovering lithium hydroxide that meets the buyer’s requirements.
Formal agreement is also subject to Infinity resolving matters around the cancellation in May of a research or investigation permit pertaining to a section of the San Jose tenure which is required to advance the project. Infinity strongly disputes the decision by the Extremadura regional government to cancel the permit and has lodged an appeal.
It meanwhile recently signed a consultancy agreement with Spain’s Promotora de Minas de Carbon under which the 45-year-old firm has agreed to provide mining advisory services to Infinity as the ASX company tries to resolve issues surrounding cancellation of the key research or investigation permit “Valdeflorez” by the Extremadura regional government.
It said the status of the investigation permit Ampliacion Valdeflorez covering a much larger area around the Valdeflorez application segment, granted last year, had not changed. Madrid-based Promotora de Minas de Carbon will work with Infinity to ensure the Ampliacion Valdeflorez remains in force.
The brownfields San Jose lithium project tenure encompasses both permit areas.
Infinity’s proposed beneficiation plant and downstream lithium chemical conversion facilities have been earmarked for the Ampliacion Valdeflorez area. It aims to produce battery-grade lithium hydroxide from lithium mica ore feedstock sourced from the smaller Valdeflorez application area.
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By Matt Birney
