Infinity Lithium is now better positioned to attract investment for its integrated San Jose mine and lithium hydroxide refining project in western Spain after increasing its ownership to 75% by paying AUD$1.6m to JV partner Valoriza Mineria over 14 months. Valoriza will retain its contractor rights to develop the project, ensuring that the partners remain aligned on their goals and focus on moving the venture forward.
Infinity Lithium has shored up its position in the flagship San Jose lithium project in western Spain from 50% to 75% after refining the original JV agreement with in-country partner Valoriza Mineria.
The company’s strategic move from lithium carbonate to a lithium hydroxide pathway last year was the key driver, which positively aligned the integrated mine and refinery project with its JV partner’s position.
Infinity will make an immediate payment of about AUD$400,000 on execution of the amended JV agreement and a further AUD$1.2m in staged payments over 14 months, or by no later than 13th May 2020.
This will offset Valoriza’s pro-rata payments into the original 50/50 JV agreement between the companies, which dates from June 2016.
Valoriza will also retain preferred contractor rights to develop the San Jose project, which will ensure alignment of goals and the focus on moving the venture forward.
Infinity now believes its project is now well-positioned to attract strategic investment, based on the budding supply shortages for domestic European lithium-ion battery, or “LIB”, materials, to underpin that continent’s push towards a sustainable electric vehicle, or “EV”, industry.
CEO and Managing Director Ryan Parkin said: “Infinity is delighted to announce the progression of project ownership to 75% as we enter a period of increasing engagement of potential strategic partners and move towards the delivery of the San Jose lithium project pre-feasibility study.”
“European lithium-ion battery supply chain developments have recently accelerated. The ability to continue to align our goals to work collaboratively with our JV partners in progressing commercial discussions with key European and other industry participants provides immediate value to the project.”
“The resulting acceleration in project ownership reflects the alignment of the project towards lithium hydroxide opportunities and the relevance of that product in one of the world’s largest electric vehicle markets”.
The San Jose project is ideally placed geographically to satisfy the increasing European demand for battery-grade lithium hydroxide to support local manufacture of LIB batteries for the EV sector and potential domestic energy storage considerations down the track.
A recent European Battery Association conference in Brussels noted the gap in the availability of lithium chemicals and the continent’s aspirations to lower its carbon emissions by moving away from its dependence on fossil fuels.
VP of the European Commission Maros Sefcovic recently noted that the EC: “has … identified a gap linked to Europe’s refining capabilities for lithium. We have to cover this gap… because the demand for processed, refined lithium will be quite big in Europe, so it makes sense to have lithium refining capacities here…. It’s only logical that we should have the whole value chain (within) Europe”.
Mr Sefcovic added that the EC will continue to progress addressing this key component essential for the European EV industry and the importance to consider both regularity and financial assistance, saying: “We are ready to discuss not only the regulatory aspects of course but also financial assistance – be it under the Important Projects of Common European Interest or Public Private Partnerships with the European Investment Bank.”
This external EC support for the European EV sector goes a long to justifying Infinity’s belief in the burgeoning industry and its decision this week to take greater control over the San Jose project.
The clear aim for the company is to take advantage of the varied European Government and private sector operators that are seeking to develop a LIB manufacturing hub in this increasingly EV obsessed part of the world.
The outstanding results from last year’s scoping study gave Infinity and its JV partner great momentum in Spain and their timing looks pretty spot on to take full advantage of the lucrative opportunity offered by the San Jose lithium project and thereby extract maximum value from the assets.