"Contact of the Ministry for Environment and Climate Action with Northvolt happened, naturally, and by the hand of AICEP, which promoted that meeting" with Galp Energia, the Ministry confirmed.
The Ministry for Environment and Climate Action, together with AICEP, attended a meeting in November 2020 between Galp Energia and the Swedish battery producing giants Northvolt. This meeting was aimed at future negotiations for the purchase of lithium that will be refined in Portugal.
“The contact of the Ministry for Environment and Climate Action with Northvolt happened, naturally, and by the hand of AICEP, which promoted that meeting,” confirmed an official source from Matos Fernandes’ Ministry, without specifying whether there have been more meetings or contacts between the three parties since November. Before that, ECO knows, in the first half of 2020, the president of AICEP had already gone to Stockholm to meet with Northvolt officials.
Without confirming the meeting or the negotiations, in late December 2020 Galp guaranteed that there was still no agreement with the Swedish company for the sale of lithium refined in Portugal. Less than a month later, in mid-January, the oil company announced it had reached an agreement with Savannah Resources: it will pay about €5.3 million to buy 10% of the Barroso mine and in the future will keep half of the lithium extracted there – about 100,000 tonnes per year.
For its part, Northvolt’s official source also told ECO in late 2020 that Portugal has all the advantages: short supply chains, renewable energy sources and exploration of national lithium deposits.
“Europe can undoubtedly play a much greater role in supplying the raw materials that the electric battery industry needs. Short value chains, renewable energy sources and exploitation of domestic deposits are in our interest. Portugal meets many of these requirements. However, at this time we are not in a position to advance any further details,” said last year an official source from the Swedish company.
Founded in 2015, Sweden’s Northvolt has already been funded by the European Investment Bank (EIB) to the tune of €350m and has plans to build Europe’s largest lithium battery factories for electric cars and energy storage, which are expected to reach full capacity by 2023.
Northvolt wants to rival North American Tesla and is actively looking for nickel, cobalt and lithium suppliers. In Portugal, it had also already reached talks in early 2020 with Lusorecursos to buy the lithium that this company wants to extract and refine at the Montalegre mine, in the country’s north.
ECO knows that the CEO of Lusorecursos, Ricardo Pinheiro, met in Sweden with Paolo Cerruti, co-founder and COO of Northvolt, to whom he then sent emails to report the concern that the Swedish company may be in talks with Savannah Resources to build a refinery in Portugal, which would turn it into a rival.
In response, also by email (to which ECO had access) Cerruti assured the Portuguese businessman that Northvolt “has no intention of competing in the lithium market, but rather to secure access to the raw material for battery manufacturing,” adding that “technical and legal reasons prevent the company from moving towards a deeper involvement” with Lusorecursos.
At the moment, the mining company is even at risk of losing its mining licence, according to Minister Matos Fernandes. The project is now stalled at the Portuguese Environment Agency (APA), waiting for further clarification from the company on environmental mitigation measures.
The Montalegre mine provides international funding of around 500 million euros to build a lithium refinery right close to the mine.
Galp also approached Lusorecursos to obtain the raw material needed to refine in the Montalegre mine, but the Portuguese company for mining exploration in northern and central Portugal eventually refused the deal because it considered that it was not a profitable business to extract the lithium from the mine and then transport it to be refined several kilometres away. As will now happen with the lithium extracted by Savannah in Boticas, which Galp will refine in a place yet to be revealed.