Portugal investment & mining news – Portugal’s lithium mining controversy - Does the end justify the means?
In a global context where a lithium shortage is expected by 2025, the lithium market is registering an exponential growth in the electric vehicles (EV) market that depends on lithium mining.
A Green and sustainable future is the buzzword that has led to the EU Green Deal and European Critical Raw Materials Act. Under this new EU law, lithium is defined as a critical raw material in order to produce batteries for electric vehicles (EVs).
According to Fitch Solutions research unit BMI, there will be a global deficit of around 50,000 tons of lithium by the end of 2025. While the world produced 540,000 metric tons of lithium in 2021, the World Economic Forum projects that global demand will reach over 3 million metric tons by 2030.
Meanwhile, in Portugal there is a white gold rush since Portugal’s lithium reserves are 60,000 tons and Portugal ranks 9th in the Top 10 countries with the largest lithium reserves. With each ton of lithium paid for by the weight of gold, there is an increasing global demand for Portuguese white gold reserves.
Mining companies are investing in Portugal’s white gold, lithium. The Government of Portugal, that has already received investment proposals amounting to 9 billion Euros, will soon be launching an international tender to evaluate lithium mining prospects in six new areas.
Mining company Savannah Resources aims at building Western Europe’s largest lithium mine in Portugal, Barroso mine, and has just announced plans to invest more than double its projected initial investment to reach 260 million Euros just for the infrastructure. Savannah Resources intends to mine 28 megatons of lithium concentrate in Boticas that is located in northern Portugal.
This very lucrative mining business, that seizes the opportunity of the EUs single-minded goal to replace Europe’s vehicle fleet with lithium batteries, means mining companies are expecting to strike gold with Portugal’s new lithium mining policy.
Mining company Savannah Resources has stated that they expect their initial investment to be repaid within just a year and a half, since they estimate total revenues to reach 3.9 billion Euros, at an average of around 300 million Euros per year, with a cash flow of 1.6 billion Euros during the project life that is expected to last 14 years. Savannah Resources intends to start producing around 200,000 kilotons of spodumene concentrate per year in 2026, that would be enough lithium to supply batteries for half a million electric vehicles.
Meanwhile, Portuguese mining company Lusorecursos, has obtained the green light to go forward with lithium mining at the Romano mine, in Montalegre that is located in northern Portugal,with an initial investment of 650 million Euros, in addition to operating costs of around 200 million Euros per year. Lusorecursos plans to mine 1.5 million tons per year which, once refined, will produce 18,000 tons of lithium hydroxide. The mining company has stated that it has already sold all the lithium before the start of mining operations.
Is Portugal’s new lithium white gold rush the calm before the storm? This is the question raised in an article that was published by ScienceDirect in September 2023.
The ScienceDirect paper on Portugal’s mining controversy states: “We share concerns articulated by many political ecologists on the legitimacy of such claims of “green”, “renewable”, and “energy transition”. The paper adds: “whether extracted lithium reserves will contribute to energy storage is a significantly reductive approach, compared to broader debates on socio-environmental justice”. The ScienceDirect research states that lithium demand is driven by strong lobbies such as electric automobility at a pace and scale that does not match sustainability policies.
There is increasing pressure on automakers and consumers to go 100% electric and local communities are silenced in order to achieve a common goal, a Green new future, that leaves a trail of environmental destruction.
With the price of lithium on world markets expected to soar and mining companies investing to obtain Portugal’s white gold manna, Europe’s clean-energy demands supersede environmental demands.
The EU Green Deal is synonymous with zero-emission electric vehicles, however, does this end justify the means? Mining lithium for EV batteries produces long-term environmental damage and destroys the livelihood of local communities.
While the end-goal of lithium mining in Portugal is environmentally friendly cars, the means, lithium mining, is environmentally destructive. The question that is raised is, does the end justify the means or is the end game mostly due to economic factors? This is a question that can only be answered by defining what a Green New Deal would mean for future generations.
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#SavannahResources #Barrosomine #Lusorecursos #ScienceDirect
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