Galp and Northvolt will build Europe’s largest lithium power plant
The largest in Europe
The plant will be located in Portugal, where the largest lithium deposit is located in Western Europe, with a target annual output of 35,000 tons of battery-grade lithium hydroxide, which can power approximately 700,000 electric vehicles.
The Portuguese oil and gas company Galp is working with the Swedish battery start-up Northvolt to develop Europe’s largest lithium processing plant, which is one of the measures to get rid of fossil fuels.
The half-holding joint venture is called Aurora, and the goal is to produce 35,000 tons of battery-grade lithium hydroxide a year, enough to meet the battery capacity of 50 GWh, which can power about 700,000 electric vehicles.
The two companies said that the factory will be located in Portugal, where the largest lithium deposit in Western Europe is located, “based on similar projects”, with a total investment of up to 700 million euros and creating up to 1,500 jobs.
The joint venture hopes to obtain lithium for the project from the Iberian Peninsula and plans to use renewable energy to power the refinery. Once a final investment decision is made, the refinery will begin commercial operations in 2026.
Galp CEO Andy Brown said: “This is a once-in-a-lifetime opportunity to reposition Europe as a leader in an industry that is critical to reducing global carbon dioxide emissions.”
Lithium demand
Galp is already one of the largest solar power companies in Spain and Portugal. The company is seeking to cut investment in fossil fuels in favor of cleaner energy.
The International Energy Agency predicts that by 2040, lithium demand will grow by as much as 400%. Lithium is a key material for manufacturing electric vehicle batteries. A typical electric car battery pack contains approximately 8 kilograms of lithium.
China’s lithium refining
China’s lithium refining capacity accounts for 60% of the world’s total, and the price of lithium has soared this year due to the difficulty of supply to keep up with the growing demand. The price index of lithium carbonate and lithium hydroxide compiled by Benchmark Mineral Intelligence has risen 240% this year.
Northvolt is one of the most advanced in a series of battery start-ups in Europe. It will open its first factory in northern Sweden this month and establish a partnership with German automaker Volkswagen. It has agreed to buy half of the joint venture’s output for use in its battery manufacturing.
Portugal hopes to use its mineral deposits to establish an “end-to-end lithium industry chain” to supply the electric vehicle industry in Europe. At present, almost all battery-grade lithium in Europe is imported from outside the EU.
Galp has been negotiating a potential investment in Savannah Resources Mining Company’s business in Portugal, which owns the Barroso lithium mine in northern Portugal.
In January of this year, Savannah’s stock price rose after Galp signed a preliminary agreement to purchase a 10% stake in the lithium mine. According to Savannah, the mine may become Europe’s first large-scale lithium producer.
The Galp-Northvolt joint venture is the second lithium refinery in Portugal announced this week. Savannah CEO David Archer said these announcements show Portugal’s “strong lead” in European lithium production. He said: “It is only a matter of time before Europe takes the lead in the production of electric vehicle batteries.
