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Highlights
- Mining License Application Progress: Infinity Lithium is awaiting feedback on its Mining Licence Application for the San José lithium project, amid challenging market conditions.
- Market Turbulence Impacts Lithium Industry: Lithium prices have plummeted by over 80% since 2022, leading to delays and suspensions in global lithium projects, including major European and Australian operations.
- Grant Extension Denied: The company’s request for an extension on a grant for capital development was denied, adding pressure to its timeline amidst a weakening European automotive sector.
Infinity Lithium Corporation (ASX:INF) has encountered a series of hurdles as it navigates the challenging lithium market, leading to a nearly 20% drop in its share price as of 11 December 2024. The company, through its subsidiary Extremadura New Energies, is still waiting on feedback from the Spanish Regional Government regarding its Direct Exploitation Concession Application for the San José lithium project.
Lithium Market Struggles
Infinity has expressed concerns over the ongoing difficulties in the lithium market, which has seen a dramatic decline in prices. Over the last 18 months, lithium prices have fallen by more than 80% from their 2022 peak. The decline is largely attributed to a slowdown in the adoption of electric vehicles (EVs) in Western markets, leading to a decrease in demand for lithium chemicals. As a result, several lithium projects worldwide, including in Europe, Australia, and Africa, have been suspended or put on care and maintenance.
The downturn in the market has also affected companies like Northvolt, a key European battery manufacturer that recently filed for bankruptcy protection. The situation has led to delays in downstream battery and cathode projects, further dampening investor sentiment in the sector.
PERTE VEC IIb Grant and Extension Denial
Infinity had received a grant of 18.8 million euros under the PERTE VEC IIb program, which supports the development of strategic energy projects in Spain. However, the company’s request for an extension to the deadline for utilizing the grant was recently denied. The grant stipulates that capital equipment must be purchased and construction must commence by November 2028. Despite this, the company is still moving forward with its plans, although the uncertain market conditions pose a risk to meeting the original timeline for the San José project.
