viewInfinity Lithium Corporation Ltd

Infinity Lithium sees significant opportunity in European domestic lithium supply chain

The company has the largest open-pit based lithium resource in Europe.

Pre-feasibility study due next month

Infinity Lithium Corporation Ltd (ASX:INF) is witnessing an increasing focus in Europe on developing an integrated lithium supply chain within the continent.

The company’s San Jose Lithium Project in Spain is in a unique position to supply the European lithium-ion battery and electric vehicle (EV) industries.

Infinity is on track to complete the San Jose pre-feasibility study (PFS) next month.

READ: Infinity Lithium's positive test results support PFS at San Jose Lithium Project

Speaking to S&P Global Platts on Tuesday, Vincent Ledoux Pedailles, an executive director at Infinity Lithium, said it would be "very difficult, or even impossible, for Europe to catch up with China" and, instead, it must focus on its own strengths and develop domestically.

He said European countries understood it was critical to de-risk the strategic supply for EVs, which starts with battery metals such as lithium.

Pedailles added: “Today, a large majority of lithium chemicals are shipped from China as nothing is being produced in Europe.

"A lot of money has already been allocated to EV development, a lot of investment is going in building large lithium-ion battery factories.

“But now the focus of Europe and the European Commission is to develop lithium production on the continent."

READ: Infinity Lithium Corporation sees increasing support for lithium projects in EU

Last week European battery producer Northvolt secured $1 billion to finance construction of Europe's first home-grown lithium-ion gigafactory, to be located in Sweden and backed by German automakers BMW and Volkswagen, in an attempt to compete in the growing global electric-vehicle revolution.

In the wake of the so-called "diesel-gate" scandal that broke in 2015, VW has been pushing hard to electrify its fleet.

It has said it can only do so much to help Germany's EV plans, and that the country's government needed to step up its efforts.

Recently, VW said it was aiming to install 36,000 electric vehicle charging points by 2025 across Europe, 11,000 of them developed by the VW brand directly.

By the early 2020s, buying an EV may be cheaper than a traditional vehicle

Europe may be investing more in the battery manufacturing industry, but questions remain as to how quickly adoption of EVs will actually take place.

Pedailles said: "I think one of the biggest hurdles has been the cost of the battery which used to represent such a large cost component of an EV.

“Ten years ago, a typical 40 kWh battery pack in an EV would have cost $40,000. Today you are lower than $8,000 and in a few years it is expected that it will be down to $4,000.

“Most experts predict that the cost of ownership of an EV today is already lower than a traditional internal combustion engine. By the early 2020s, buying an EV may be cheaper than a traditional internal combustion engine platform.”

Lithium production in Europe could be cheaper than other countries

Pedailles added: "China relies on Australia for its lithium feedstock and needs to pay transport and import duties to bring it over. We have lithium feedstock in Europe, no need for imports and therefore no taxes.

“Royalties is also an important component. In Chile, the second-largest lithium producer in the world, you have to pay up to pay up to 40% royalties on lithium. In Europe and in Spain for example, where large lithium resources are available there are no royalties.

San Jose is right next to its end market

"We have a uniquely fully integrated model where our conversion plant is right next to our mine. We have almost no transport, no import duties, and we don’t have to rely on a third party converter.

“We also have all the infrastructure we need on site including a gas pipeline adjacent to the plant, a highway, electricity, water, etc."

“The company is located right next to our end market, an end market that can rely on us to supply battery quality lithium hydroxide in the long term as we have the largest open pit based lithium resource in Europe.”

Quick facts: Infinity Lithium Corporation Ltd

Price: 0.065 AUD

Market: ASX
Market Cap: $15.52 m

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