Portuguese energy company Galp is not in a hurry to make a final investment decision (FID) regarding the construction of a battery-grade lithium refinery in Portugal, CEO Filipe Silva announced.
Galp’s 50-50 joint venture with Swedish battery maker Northvolt, named Aurora and established in November 2021, had initially aimed to finalize the FID by the end of 2024. However, the refinery project is now facing delays due to its complexity and uncertainty surrounding grant funding. Additionally, low lithium prices resulting from oversupply from China have added to the challenges.
“The market is very challenging as we speak. So, we are in no rush to take an FID until we see an appropriate return for the project. We don’t seem to be there,” Silva stated during an analysts call.
He expressed concerns that the project could become “orphaned” if lithium mining does not develop in Portugal. Currently, Portugal is the largest producer of lithium in Europe, with around 60,000 tonnes of known reserves, primarily mined for ceramics.
The newly elected center-right government of Portugal is finalizing a strategic plan to explore for critical raw materials essential for the green transition, with copper potentially becoming more significant than lithium.
The previous government had planned to auction licenses for lithium prospecting in six northern and central regions of the country, but environmental and social impact concerns have delayed the auction, which was initially scheduled for 2018.
The refinery, which requires an estimated investment of over 1 billion euros ($1.1 billion), aims to achieve an initial annual production capacity of up to 35,000 metric tons of lithium hydroxide, a vital component for lithium-ion batteries.
