June 28 (Reuters) - Australia's Infinity Lithium INF.AX said on Monday it will supply battery-grade lithium hydroxide to South Korean battery producer LG Energy Solution (LGES) for at least five years from its Spain-based San Jose project.
Lithium, an essential component of electric vehicles (EVs), is becoming an increasingly important metal with EV demand surging globally as countries race to meet emission targets and move towards cleaner modes of transportation.
Under non-binding agreement, the purchase price will be based on market prices for lithium hydroxide, and there is a potential for the arrangement to continue for a further five years, the Australian company said.
Infinity also expects the San Jose project to contribute to the European Union's development of a vertically integrated lithium-ion battery supply.
The permit for San Jose project was canceled by Spanish authorities in last month, Infinity said, adding that any formal agreement is contingent on it getting the permit back.
The company previously said it strongly disputes the validity of the decision to cancel the permit application.
(Reporting by Arundhati Dutta in Bengaluru, Editing by Sherry Jacob-Phillips)
((Arundhati.Dutta@thomsonreuters.com;))
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