Infinity Lithium Corporation (ASX: INF) has been told its 75%-owned San Jose project in Spain is the first such lithium project to receiving financing from the European Union.
San Jose, the second largest hard rock lithium deposit in the European Union, will receive backing from the EIT InnoEnergy initiative, a public-private partnership supported by the European Commission and which has been mandated to lead the industrial stream of the European Battery Alliance (EBA).
The plan will incorporate several stages that could see Infinity expand its finances in three stages, the largest one being €300 million (A$492 million).
EIT InnoEnergy funding includes up to €800,000 to finance phase one of the pilot plant at San Jose.
The European agency will then support fundraising activities up to €2.4 million for phase two of the pilot plant.
As a third stage, funding is accompanied by an assistance agreement to support raising up to €300 million in debt and equity to finance the larger project.
There will also be assistance with negotiations to get offtake agreements from members of the EBA.
Infinity to access Europe’s lithium supply chain
Moreover, Infinity will be supported in obtaining necessary environmental approvals and “societal acceptance” for the project because of the Perth-based company’s “strategic role in the European lithium-ion battery value chain”.
Managing director Ryan Parkin said this multi-level support will see the San Jose project benefit from access to a vast European network as the European Union focuses of securing lithium chemicals and developing an integrated battery chain.
“With an impressive track record of success in driving innovative and strategically important lithium-ion battery value chain projects to fruition, EIT InnoEnergy represents an ideal project partner for Infinity,” he added.
The EBA was created in 2017 and includes the European Commission, the European Investment Bank along with automakers, battery and cathode producers.
EIT InnoEnergy has so far invested €700 million and helped raise another €1.7 billion.
China controls more than half world’s lithium chemical supply chain
Europe is now 100%-dependent on imports for its lithium and the automakers there are seeking to de-risk their supply chain, especially after the interruptions caused by the coronavirus pandemic.
The European Union is set to become the second largest lithium chemical consumer in the world — but no lithium plants have yet been built within its borders
China controls 55% of the global lithium chemical supply chain, Chile 27% and Argentina 10%.
The San Jose lithium mine and processing project are located near the Spanish town of Caceres, 280 south-west of Madrid.
It has a JORC resource of 111.2 million tonnes. The project is expected to operate for 30 years, including 19 years of mining. It is planned to produce around 15,000 tonnes per annum of lithium hydroxide, enough to power 10 million fully electric vehicles over the life of the project.