Galp and Savannah prepare project to build lithium refinery in Portugal

There will be a lithium refinery in Portugal, the government already knows the project and it has just been submitted to the Mobilising Agendas/Alliances for Business Innovation and for Green Reindustrialisation that were opened under the Recovery and Resilience Programme, the Minister for Environment and Climate Action, João Pedro Matos Fernandes, said in an interview with ECO.

The minister also announced that the tender for lithium prospecting in areas already selected and submitted for environmental assessment will be launched “early next year.”

The minister did not say much more about the refinery project (location, investment, funding to be received from the PRR) but ECO knows that the two major companies behind this project are Galp and British company Savannah Resources. Contacted, the two companies did not want to confirm the project’s application to build a lithium refinery in Portugal or provide any statements.

“There will certainly be a lithium refinery in Portugal. There isn’t one in Europe yet but we know – it’s not my place to divulge it – but a project was presented to me by companies and we know that a project for the construction of a lithium refinery in Portugal has been added to the mobilising agenda for industry,” said the minister.

ECO also knows that the work between various companies to enter into contracts and partnerships has been very intense so that the project of a lithium refinery on national soil does, in fact, go ahead.

Galp and Savannah have already been working together in the lithium value chain for some time. Although the original agreement signed between the two in January 2021 expired in June (it gave Galp a 10% stake in Savannah’s Portuguese subsidiary that holds the Barroso Mine concession, for $6.4 million), the two have maintained “commercial discussions” regarding lithium exploration at the mine.

In June, Galp’s CEO, Andy Brown, left no room for doubt. He announced on Capital Markets Day 2021 that the company is already in negotiations with a major European manufacturer of lithium batteries [Swedish Northvolt] to create the first processing unit of this mineral in the whole of Europe.

The CEO believes that this is a project – the birth of the first lithium refinery on European territory, with “a capacity of at least 25 kilotonnes” – that can accelerate rapidly until the end of the decade. By 2025, over 10% of Galp’s investment (€800 million to €1 billion per year) will be directed towards green hydrogen and lithium.

“Portugal is very well positioned for this scenario. It has some of the best lithium reserves on the continent and Galp is already in discussions for a contract to buy the raw material from a mine [do Barroso, in Boticas] here in Portugal,” explained Andy Brown, without ruling out the possibility of importing lithium as well.

Government launches lithium tender in early 2022

Coincidence or not, one of the first occasions that Minister Matos Fernandes pronounced the words: “There’s one thing I know, Portugal will have a lithium refinery”, was precisely on January 21, 2020, the date Galp announced to the country the closure of the Matosinhos Refinery.

Now, the governor says with the same certainty: “We’ll certainly have lithium exploration, and done fairly”. It won’t be as soon as desired, he said. “We really want to launch the exploration tender, but it won’t be this year, because the public consultation ends on December 10. It will be early next year.”