Galp takes stake in Portugal lithium project

Portugal's integrated Galp will acquire a stake in UK miner Savannah Resources' lithium mine project in the country, taking its planned energy transition in a new direction.

Galp will pay $6.4mn for 10pc of the Mina de Barroso project in return for up to 100,000 t/yr of lithium concentrate, which is 50pc of anticipated output.

Savannah's project, which is undergoing an environmental impact assessment, is one of around 40 requests lodged with the Portuguese government for licences to develop the country's lithium reserves over the past few years. Portugal has 60,000t of confirmed lithium reserves, and has large areas containing the raw material spodumene yet to be explored. The country is Europe's largest producer of the metal, and its output of 1,200t in 2019 supplies the domestic ceramics industry.

This is Galp's first deal since it said last month that it will close the smaller of its two oil refineries, the 110,000 b/d Porto plant, to focus on developing its low-carbon business. Galp has earmarked 40pc of its planned 2019-22 capital expenditure (capex) for this sector. Last year it became the largest photovoltaic (PV) solar plant developer in Spain and Portugal, and is leading the H2Sines project to build a green hydrogen plant with upwards of 1GW of installed electrolysis capacity.

Galp declined to comment on local media reports that it is planning to use land made available by the decommissioning of the Porto complex to build a lithium refinery and has discussed a refined-lithium supply agreement with Swedish battery producer Northvolt.

Portugal's energy minister Joao Pedro Matos Fernandes has said that his government is supportive of any attempts to build a lithium refinery, and municipalities close to the sites of reserves of the metal have offered locations for a plant but none of them are the Matosinhos municipality where the Porto refinery is located.

By Jonathan Gleave