Australian exploration company Infinity Lithium is something
of an outlier in the lithium world.
Eschewing "hot" lithium jurisdictions such as Chile,
Argentina and Australia, the company has opted to develop a
zinnwaldite resource at Extremadura, in western Spain.
Strategically located within the EU, Infinity’s
San Jose Project will be a fully integrated operation producing
battery-grade lithium hydroxide onsite.
According to Infinity’s chief executive officer,
Ryan Parkin, this will give the company a major advantage
over most other lithium producers and juniors, which only
sell lithium concentrate.
"Compared to non-integrated producers, San Jose does not
incur costs for the transportation of a lithium concentrate
offshore," Parkin said. "This sets us apart from spodumene
concentrate producers, which have to move large volumes of
material to China for conversion to battery-grade lithium
chemicals. Our material is moved just a couple of kilometres to
our onsite hydroxide conversion facility."
Once the San Jose concentrate has been converted, there will
be no export duties payable on the products that Infinity
will ship, because they will be consumed within the EU. The
users will mostly be yet-to-constructed battery production
facilities, regarded as necessary to supply
Europe’s rapidly expanding electric vehicle (EV)
In addition to the benefit of its proximity to large
end-markets, Parkin noted that Extremadura holds other
important advantages for Infinity.
San Jose is close to gas and water supplies, and to roads,
all of which are key infrastructure for the project, and which
Infinity would otherwise have to build.
Unlike other jurisdictions (including Chile and Argentina,
both major lithium suppliers), Spain does not extract mining
royalties and the country is demonstrably supportive of its
"The San Jose net direct cash [C1] cost is at the lower end
of the cost curve for hydroxide due to these factors," Parkin
"The environmental profile is also important for EU
end-users, and we are lucky that all the reagents we need are
available domestically. This means that we don’t
need to import soda ash from North America, like in Chile or
Argentina, or caustic soda from China, like in Australia," he
|Drone footage of Infinity’s San
Jose lithium project in Extremadura.
Unmoved by market movements
Infinity is undeterred by the pullback in lithium prices
this year – a development which, after a three-year
bull market, has prompted some lithium companies to shelve
"The lithium market has seen increased supply - for example,
from various spodumene concentrate producers - and prices have
felt the effects of Chinese converter stockpiles and increased
output from mining operations," Parkin said.
"We view this as a relatively short-term position in respect
of supply/demand imbalance," he added. "By the time San Jose
enters production and we start producing battery-grade
chemicals, this oversupply situation will have dissipated."
Parkin admitted that the share prices of lithium exploration
companies have been "affected by the general market sentiment
toward lithium," which has cut off some investment capital.
But he believed that this will reinforce market fundamentals
for projects such as San Jose in the future.
"The negative market sentiment is reducing or delaying
investment in new lithium capacity," he said. "In the long
term, demand is projected to surpass production, so cuts to
investment now will trigger much higher price increases when
the market becomes tight."
Recognizing lithium’s importance in
The European Commission (EC) has indicated its concern about
the EU’s exposure to Chinese lithium supply, with
the bloc’s demand for lithium chemicals growing,
driven by the rapid expansion in EV uptake.
According to Vincent Ledoux Pedailles, executive director at
Infinity Lithium and a nominated expert adviser on lithium to
the EC, "the commission readily acknowledges the strategic
imperative to establish a self-sufficient lithium-ion battery
market within Europe. This includes securing access to the five
essential battery raw materials: lithium, nickel, cobalt,
manganese and graphite."
The EU’s Horizon Europe programme includes a
dedicated budget of €100 billion ($112 billion*) to
support research and innovation, some of which is earmarked for
battery materials and supply chain development.
The EC is also working with the European Investment Bank
(EIB) to address identified gaps in the battery value
Maroš Šefčovič, the
EC’s vice president in charge of its Energy Union
initiative, is a "strong advocate" for a fully integrated
lithium-ion battery supply chain in Europe, Pedailles said.
On June 12, 2019, Šefčovič led a meeting
between the EC and the EIB in which he called for the
prioritisation of sectors that are strategic for Europe, and
specifically for battery raw materials projects that focus on
lithium extraction and conversion to chemicals.
He noted that the threat of trade wars and increasing
competition from China, in areas such as the automotive sector,
warrant affirmative action by EU policymakers and funding
bodies, and called for wider and more definitive engagement in
In addition, the EU’s Critical Raw Materials
list is being revised this year by the EC. "Lithium is not
currently listed as critical by the EU," Pedailles noted,
"unlike cobalt, which is used in cathodes for lithium-ion
But the Commission will consider the merits of including
lithium in an updated list for 2020, a move which should
generate greater support for lithium projects like San Jose
*Conversions made August 2019