Infinity Lithium inks offtake MoU with LG Energy Solution for San José lithium hydroxide

Infinity Lithium Corporation Ltd (ASX:INF) (FRA:3PM) has inked a key non-binding Memorandum of Understanding (MoU) relating to a potential offtake agreement with major South Korean lithium-ion battery producer LG Energy Solution (LGES). Under the proposed deal, the ASX-listed minerals company will provide LG with lithium oxide from the second-largest JORC-compliant hard rock lithium deposit in the European Union: the San José Lithium Project in Spain. Currently, the agreement is a non-binding MoU, meaning both parties have agreed to work towards finalising a binding offtake agreement over the next 12 months. Infinity CEO and managing director Ryan Parkin said: “We are delighted to announce the commencement of a long-term commercial partnership with tier one partner LG Energy Solution, welcoming the potential to support a global leading lithium-ion battery producer to secure essential facets of the supply chain.” The agreement This MoU stipulates Infinity will supply lithium hydroxide from the San José minerals play to LG over an initial five-year period. The agreement also leaves room for the partnership to continue for a further five years, subject to both parties’ consent. Under that offer, LG Energy Solution gains priority access to 10,000 tonnes of product from San José every year. The battery producer also has the option to offtake additional volumes, as long as it negotiates with the ASX lister. Ultimately, any lithium hydroxide supplied from the Spanish project will be costed according to market pricing — a stipulation that will be finalised in a binding agreement. Of course, any formal agreement is likely to be subject to standard conditions precedent for an offtake agreement of this nature, including Infinity successfully entering commercial production and creating lithium hydroxide that meets LG’s specification requirements. In addition, a formal agreement relies on Infinity resolving permitting hurdles at San José, where a permit was cancelled by a governing body last month. San José Lithium Project Infinity’s San José Lithium Project is a fully integrated materials asset, prised to leverage off the European Union’s rapid adoption of electric vehicles. The company owns 75% of the lithium play through its wholly-owned subsidiary, focused on turning San José into a sustainable producer with a low carbon footprint. Overall, Europe is poised to become the second-largest market for battery-grade lithium after China, meaning prospective producers like San José have the potential to play a critical role in the continent’s lithium supply.