Infinity Lithium Withdraws from Spanish Grant, Returning Nearly €20 Million
Infinity Lithium Corporation has withdrawn from Spain’s PERTE VEC IIa capital funding program, opting to return nearly €20 million due to prolonged permitting and regulatory hurdles.
- Withdrawal from Spanish PERTE VEC IIa grant program
- Returning approximately €19.7 million including interest
- Delays in permitting and regulatory approvals cited
- Grant funds earmarked for capital equipment purchases
- Project timeline impacted, with lithium production delayed beyond 2028
Background on the PERTE VEC IIa Grant
In November 2023, Infinity Lithium Corporation’s Spanish subsidiary, Tecnologia Extremeña Del Lito S.L., secured a significant capital funding grant under the Spanish government’s PERTE VEC IIa program. This grant, valued at approximately €18.82 million, was designated exclusively for capital equipment purchases to support the development of lithium chemical production facilities in Spain.
Challenges Leading to Withdrawal
Despite the initial optimism, Infinity Lithium has faced persistent delays in obtaining the necessary permits and navigating the regulatory framework. These challenges have extended the project timeline beyond the grant’s stipulated usage period, which required completion of permitting, funding, construction, and commencement of lithium production before the fourth quarter of 2028.
Attempts to secure an extension for the grant utilization were unsuccessful, leaving the company with funds held in escrow that would continue to accrue interest if unused. Given these constraints and external factors beyond the company’s control, Infinity Lithium made the difficult decision to withdraw from the PERTE program.
Financial and Strategic Implications
Following the withdrawal, Infinity Lithium has initiated the process of returning the grant funds along with the accrued interest, totaling approximately €19.7 million, back to the Spanish government. This move reflects a prudent approach to managing financial obligations and regulatory compliance, but it also signals a setback in the company’s project development timeline.
While the return of funds may temporarily impact the company’s capital structure, it underscores the broader challenges mining and resource companies face when operating within complex regulatory environments. The delays and withdrawal highlight the risks inherent in large-scale industrial projects dependent on government funding and approvals.
Looking Ahead
Infinity Lithium’s Executive Chairman, Adrian Byass, authorised the announcement, emphasizing the company’s commitment to transparency and regulatory adherence. Investors and industry watchers will be keen to see how Infinity Lithium adjusts its strategy moving forward, whether through alternative funding avenues or revised project timelines.
Bottom Line?
Infinity Lithium’s grant withdrawal marks a pivotal moment, underscoring regulatory risks that could reshape its Spanish lithium ambitions.
Questions in the middle?
- What alternative funding strategies will Infinity Lithium pursue following the grant return?
- How will ongoing regulatory challenges in Spain affect the broader lithium sector?
- What is the updated timeline for Infinity Lithium’s project development post-withdrawal?
