Regional focus
A poster against lithium extraction by the banks of the Ancora river near Caminha, Portugal.
Complicating matters, however, is a recently launched corruption probe – at the behest of the Public Prosecution Service of Portugal (DCIAP) – into lithium, ‘green’ hydrogen and data centre deals, including the mining concessions awarded to Lusorecursos and Savannah Resources. Already, this probe has claimed the political scalp of Prime Minister Antonio Costa, who tendered his resignation in early November after prosecutors announced that he was under investigation and police searched dozens of addresses, including his official residence and the environment and infrastructure ministries.
Meanwhile, Afonso Salema, CEO of the Start Campus data centre project, was initially detained and then released by the same investigation – the project was previously described as one of the largest foreign direct investments in Portugal in recent decades. Salema denies any wrongdoing.
In response to all of this, Savannah issued a statement to the London Stock Exchange on 7 November, noting: “As part of these actions Savannah confirms that investigating officials attended certain business locations in Portugal today.” It added that it had cooperated fully with the investigating officials and it would continue to do so. “Neither Savannah nor any of its directors or employees are targets of the investigation – termed as ‘arguidos’ in Portuguese,” the statement added.
The company also confirmed that its work at the Barroso Lithium Project is continuing unencumbered while the DCIAP’s investigation is ongoing. “The project’s mining lease, issued in 2006, remains in good standing and Savannah has, and always will, conduct its business in a fully lawful and transparent manner,” it further noted.
Required changes require resubmission It has been a long process for Savannah, according to Gorman. Barroso received preliminary approval in 2021
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for an open pit mine, but with the APA subsequently asking for amendments to be made to the proposal. “That proposal was resubmitted with changes and approved late with a host of new measures aimed at limiting damage – no water taken from a nearby river, limited removal of vegetation, restoration of the site to exactly as it was found,” she explains. “That being said, there are still crucial elements of the licensing process that need to be approved, including a social impact assessment – and a compensation package for the municipality – as well as […] offtake agreements, financing [and so on] before they break ground.” Meanwhile, if the global Covid-19 pandemic and subsequent war between Russia and Ukraine has taught us anything, it’s that the old ways of doing business – when it comes to supply chain security – no longer suffice. As a result, ‘de-risking’ has led to a growing clamour for ‘near-shoring’ that should, in theory, give a boost to the domestic mining industry, both in Portugal and elsewhere in Europe. Yet, the larger question, in many ways – given rapidly rising demand for EVs and battery electric vehicles (BEVs) – is whether lithium extraction in Europe will make much of a difference.
For Gorman, the answer is no – at least in the short term. “Research house Fastmarkets has done a lot of work on this, taking into account the nature of lithium occurrences – many in Europe are unconventional [or] early stage and therefore could be projects that are uneconomic – and lengthy permitting processes,” she says. “As they say, the risk is firmly to the downside. Fastmarkets forecasts European mine supply to reach 135kt lithium carbonate equivalent (LCE) by 2030, but expects EV demand to reach 380kt LCE in the same year – a shortfall of approximately 245kt LCE.”
A long way to go However, there has been a sea change in attitudes on the part of European governments, with lawmakers increasingly inclined to not only do more to promote the industry but also to allow for proposals to be expedited more quickly. This is no small thing, given the ongoing threat to supply from China – with that country’s recent export restrictions on germanium and gallium, and its upcoming curb on graphite products, serving as a potential warning of things to come. Gorman remains cautious, however. “There’s still a long way to go in terms of promoting the industry,” she says, adding that “because of the nature of news, those not involved with the industry only see the mines that go wrong, not the successful ones – and until that’s sorted out, we’re only going to see increased resistance from community stakeholders.” The CRMA isn’t a magic bullet, of course, and the reality is that relatively resource-poor Europe will continue to be dependent on China and other potentially hostile non-EU actors. It does represent an encouraging start, however. ●
World Mining Frontiers /
www.nsenergybusiness.com
GeorgeVieiraSilva/
Shutterstock.com
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