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Infinity Lithium on course for low cost lithium hydroxide production

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Infinity Lithium on course for low cost lithium hydroxide production

London — As the race to secure Europe's battery supply chain continues, Infinity Lithium said Thursday it had completed a bullish assay on its proposed San Jose mine in Spain, indicating the possibility of producing 15,000 mt/year of lithium hydroxide at less than $5,500/mt.

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A production cost at around that level would put the developer at the bottom end of the cash curve, it said. Lithium is a key ingredient in electric-vehicle battery packs.

Vincent Ledoux Pedailles, an executive director at Infinity Lithium, recently told S&P Global Platts that, as Europe continued to position itself in the global EV market, it needed to become more independent and develop a fully integrated domestic supply chain.

The EU is keen to develop a domestic manufacturing base for lithium-ion and other batteries, as its battery marketcould be worth up to Eur250 billion ($280 billion) by 2025.

Infinity Lithium is an Australian-listed minerals company seeking to develop the San Jose lithium project in the western region of Extremadura.

Still, Pedailles was slightly bearish on the outlook for the global lithium business over the coming year, which is widely echoed across the market.

Platts assessed battery-grade lithium carbonate down Yuan 500/mt August 16 to Yuan 64,000/mt, and lithium hydroxide Yuan 2,000/mt lower at Yuan 73,000/mt. Both assessments were on a delivered, duty-paid China basis.

Market participants were mainly downbeat, with some expecting lithium carbonate prices to continue to drop as there were no obvious signs of demand growing fast enough to keep up with burgeoning new supply.

A wave of new lithium projects ramping up production will continue to depress prices, SQM, one of the world's biggest producers of the mineral said late Wednesday.

Producers, particularly in Australia, have rapidly increased lithium production over the last two years to meet booming demand from the electric vehicles industry, but this has sent prices plummeting from highs seen last year.

Regarding Infinity's assay, Ryan Parkin, managing director, said that the San Jose project is "a long life, low cost project that is essential to meet the European Commission's goal to secure critical lithium chemicals that are imperative for the economic survival of their auto industry."

On the subject of autos, Infinity's Pedailles said the company is in talks with four organisations for potential offtake of production.

Pedailles told Platts Thursday: "We are already on the radar of several OEMs in Europe and advancing negotiations with a number of them. At the moment our four most advance negotiations are with two automakers, one battery maker and one cathode manufacturer. Usually OEMs are asking for 100% offtake volume but in some instances we could have two 'offtakers' taking a 50/50 deal."

During Wednesday trade another lithium developer, IronRidge, focused on African production, said it had hosted "well-received" talks with one of the world's largest carmakers, Volkswagen.

"Volkswagen has signed a Memorandum of Understanding (MoU) with the government of the Republic of Ghana for the manufacture and assembly of vehicles. It is on this basis and Volkswagen's broader electric vehicle and battery manufacturing aspirations, that IronRidge sees synergies between the two companies," it said.

-- Ben Kilbey, ben.kilbey@spglobal.com

-- Edited by Jonathan Loades-Carter, jonathan.loades-carter@spglobal.com