The Spanish government has awarded Infinity Lithium a €18.8-million grant to advance the San José project, the Australia-listed company reported on Monday.

The Ministry of Industry, Trade and Tourism finalised the allocation of funds in a new batch of definitive aid for industrial projects for the delivery of electric vehicles (EVs), their essential components and the production or recovery of the essential raw materials required.

The final assessment of projects under PERTE VEC II authorised the definitive commitment totalling €190.4-million in addition to other grant funding previously announced, bringing a total of €528.7-million across 26 projects for the advancement of a national EV battery chain.

The funds committed to San José under PERTE VEC II were the sixth-largest under the programme and are the first PERTE funds allocated to the processing of critical raw materials.

“These first funding commitments for the processing of critical raw materials in Spain place the company at the forefront of future funding pathways at both the national and European level,” stated Infinity MD and CEO Ryan Parkin.

The Ministry is already working on a third call for PERTE VEC (III) which will commence the process for submissions at the beginning of 2024 with more than €1.2-billion in grant funding available. The availability and cost of electricity has been highlighted as a major benefit for projects in Spain.

“Spain is extremely competitive at an energy level, with a wide deployment of renewable energies that makes the price of electricity very attractive to international companies. We are convinced that, thanks to the contact and intense public-private collaboration, PERTE VEC III will be as successful as the second one,” commented acting Industry, Trade and Tourism Minister Héctor Gómez.

Infinity last week published an updated scoping study for San José, highlighting the project’s positive financial outcomes and environmental characteristics, complemented by increased production profiles.

The study estimates a pre-tax net present value (NPV) of about $4.12-billion, a pre-tax internal rate of return (IRR) of 25.8% and a post-tax NPV of about $2.87-billlion and a post-tax IRR of 21.3%.

It estimates steady state C1 costs (post ramp-up) of $5 723/t lithium hydroxide monohydrate (LHM) after by-product credits.

The LHM price forecast is $27 000/t over the life of the project.

The increased production is posited to be strategically important for Europe.

The study shows an about 33 000 t/y LHM production (average steady state) and 26-year production life (including ramp-up).

It indicates a considerable volume upside and long-life supply of battery-grade LHM.