Infinity Lithium has unveiled an integrated underground mine and hydroxide scoping study for the European Union’s second-largest hard rock lithium project.
Infinity’s (ASX:INF) 75%-owned San Jose lithium project in central-western Spain has a JORC resource of 111.2 million tonnes for more than 1.6 million tonnes lithium carbonate equivalent – the second largest in a region where the battery revolution is in full swing.
The project was initially planned as an open pit operation in a prefeasibility study completed 2019, but on the back of permitting challenges has been taken underground in the latest study in a move which would both reduce surface tailings and leave no material visible impact from mining operations.
It would be a case of back to the future – San Jose was previously an underground tin mine in the 1960s.
The project is fully integrated for chemical production, having successfully produced lithium hydroxide monohydrate and lithium carbonate at bench-scale. INF even has a non-binding memorandum of understanding for lithium hydroxide offtake with LG Energy Solution.
Impressive stuff.
Today’s scoping study outlines a project producing a steady-state average of 19,500 tonnes per annum of battery grade lithium hydroxide over a life of 26 years.
The project has a pre-tax net present value of $US811 million, and a pre-tax internal rate of return of 25.6% giving it a payback of just 3.2 years. Total life-of-mine revenues come in at $US7.9 billion.
The study has been completed at an assumed average price of $US17,000 per tonne with C1 cash costs of $US6,399/t including 20% contingency for underground mining operational expenditure.
The tailings production footprint for the project has been significantly reduced against Infinity’s 2019 prefeasibility study, with 55% of tailing which previously would have sat at surface now planned for paste infill underground. The reduction in the surface impact is all the more impressive due to the fact that output from San Jose increases more than 25% in the new scoping study measured against the 2019 PFS. The study outlines an average run-of-mine of 2 million tonnes per annum.
The company has mapped a timeline to production with a final investment decision scheduled for 2022/23.
Critical time for transition
Today’s study comes at a critical time for lithium and the battery industry in Europe, where there is significant drive toward an electric future and away from fossil fuels.
Lithium is a key component of the lithium-ion battery commonly used to store energy for electric vehicles and homes.
As a result, demand for the commodity looks set to skyrocket.
Based on projected EV penetration Canaccord expects more than 1000-gigawatt hours’ worth of lithium-ion battery gigafactory capacity to come online by 2030 in the EU, and the International Energy Agency predicts global demand for 2030 to rise above 2.5 million tonnes of lithium carbonate equivalent.
It currently stands at 500,000t which by chance is Benchmark Mineral Intelligence’s forecast supply shortfall in the EU in 2030.
Sharing the benefit
Mining underground would also increase direct and indirect employment opportunities in the Extremadura region, where unemployment was reported at 22.22% in the first quarter of 2021.
The project would create some direct jobs, with further indirect employment of 1,660 people, and Infinity is committed to generating long-term skilled labour in the area.
The region gives back too, with huge potential to align with Extremadura’s vast renewable energy potential.
Extremadura is the region with the highest installed photovoltaic power capacity in Spain – accounting for 22% of all capacity – and 100% renewable electricity is available by green energy certificates or direct from the photovoltaic source.
Infinity is also in discussions to blend hydrogen with natural gas to power its kiln and has identified hydrogen as a potential alternative power source.
This article was developed in collaboration with Infinity Lithium, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.