Indo Global Exchanges Pte Ltd (IGEX)

[Carter]

"Spain is Now Firmly on the Lithium Market Radar"
Colin Sandell-Hay, Contributor - 6 September, 2021

Spain in now firmly on the radar of lithium producers from across the globe after the Spanish government revealed plans to invest billions in establishing the nation as electric vehicle (EV) development hub.

This summer, Spain’s president Pedro Sánchez, presented the “Strategic Project for the Recovery and Economic Transformation” (PERTE) of Electric and Connected Vehicles as a key plank in the government’s planning.

He told a small audience recently that the project will be based on public-private partnership and focused on strengthening the value chains of the Spanish automotive industry, which the government considers as a strategic sector.

“Our priority is economic, social and territorial recovery. And to achieve a vigorous recovery we cannot be satisfied with returning to the point prior to COVID, but we must transform our economy,” he said.

He noted that the Spanish economy must be more productive and create more jobs, as well as being more digital – and green.

The development of the PERTE foresees a total investment of more than €24 billion in the period 2021-2023, with a public sector contribution of €4.3 billion and a private investment of €19.7 billion.

“With this investment to boost electric vehicles, we believe that the sector can increase its weight in GDP by up to 15% by 2030,” Mr Sánchez said.

The president said the aim is to create the necessary ecosystem in Spain to develop and manufacture electric and grid-connected vehicles, and turn the country into the European hub for electromobility.

“The PERTE is aimed at one of the strategic sectors of the Spanish economy, with a tractor effect due to its weight in the national GDP and direct and indirect employment and its contribution to the trade balance.”

‘Consolidation of quality jobs’
Spain is already the second largest vehicle manufacturer in Europe and the ninth largest in the world. It represents 11% of total industrial turnover. The automotive sector is the fourth largest export sector and represents 15% of total Spanish exports.

To boost and promote the PERTE, the president has announced the creation of an Alliance for Electric and Connected Vehicles, which will involve all relevant stakeholders and ensure permanent dialogue. The ministries involved will be represented in this Alliance, as well as the automotive round table where the representative associations of the automotive sector, trade unions and regional governments are present.

Mr Sánchez said he expects that PERTE in relation to electric vehicles will contribute to the creation and consolidation of quality jobs, as all projects approved will contain a training component to ensure the qualification and requalification of workers.

“In this area I would like to point out that Spain is the first country in which an Academy for Batteries is to be set up. This initiative will enable the training of some 150,000 people in the coming years in the different areas related to the development and manufacture of batteries for electric cars,” he said.

Other expected impacts would be to reach 250,000 registered EVs and between 80,000 and 110,000 charging points deployed by 2023.

“It is important for Spain to react and to anticipate this transformation in Europe’s automotive sector,” the president said.

Building on its European EV position
Spain produced 2.2 million cars and trucks in 2020 and the government is aiming to ensure it doesn’t get left behind in the European EV race, currently dominated by Germany.

“What we are doing is accelerating a change that is already taking place,” the nation’s junior industry minister, Raul Blanco, said recently.

“This is a unique opportunity. The automakers are on board, and there are resources to carry out the investments.”

Spain currently has 96,000 EVs officially registered is reportedly aiming to add another 250,000 more.

The nation recently agreed to a public-private partnership for battery manufacturing in the region of Catalonia.

“The project will allow the development of a set of actions to guarantee that Spain has the necessary infrastructure, installations and mechanisms to autonomously and competitively manufacture a connected electric vehicle,” the country’s minister of industry, trade and tourism, María Reyes Maroto Illera, said.

The partnership will initially include Spanish Volkswagen subsidiary Seat, Spanish utility Iberdrola, finance group CaixaBank and telecommunications company Telefónica.

From the ground up
The good news for lithium producers is the Spanish government is basing its strategy on the whole production chain from lithium mining to the manufacture of rechargeable batteries and electric vehicles.

The government’s bullish announcement had an instant effect on ASX-listed Infinity Lithium (ASX: INF) which saw its share price leap 17% in July.

Infinity Lithium is at the forefront of potential lithium extraction in the nation with its San José Lithium Project. San José is a fully integrated industrial project focused on the production of battery grade lithium chemicals from a mica feedstock that represents the EU’s second-largest JORC-compliant hard rock lithium deposit.

The company’s CEO and managing director, Ryan Parkin, said the project has the potential to provide an essential component in the EU’s development of a vertically integrated lithium-ion battery supply chain.

“The availability of critical raw materials and the production of battery grade lithium hydroxide in the EU is essential to ensure the long-term production of lithium ion batteries for eMobility and the transition of the burgeoning automotive industry to electric vehicles,” he said.

Infinity recently signed an MoU with global leading lithium-ion battery producer LG Energy Solutions for the potential long-term supply of battery grade lithium hydroxide. Both parties are working towards the completion of a binding offtake agreement within the next 12 months.

The key terms of the MOU with LG includes:

A potential supply of LiOH for an initial five-year period with the potential to continue for a further five years
First right to 10,000tpa of Product with additional volumes under the MOU subject to negotiations and agreement between Infinity and LGES
The deal is subject to Infinity resolving permitting matters, which now seems a lot closer following the Spanish government announcement.
https://www.theassay.com/articles/feature-story/spain-is-now-firmly-on-the-lithium-market-radar/