(From article by Monash University, Australia)
Portuguese energy company Galp has decided not to proceed with its 1.1 billion-euro lithium-conversion project in Setúbal after it failed to identify new international partners to replace Northvolt, a Swedish lithium-battery manufacturer, according to the multinational energy corporation.
"Despite significant efforts, which included assembling a qualified team, conducting engineering studies, preparing licensing processes, and seeking incentives and funding, the current context and the inability to count on an international partner makes it impossible to continue with the project," said Galp, in a press release of November 26.
Days before Galp's announcement and after Northvolt's talks with investors and creditors, such as Volkswagen and Goldman Sachs, failed, reported Reuters (November 27), Northvolt filed for Chapter 11 bankruptcy protection in the United States. Its Chief Executive Officer, Peter Carlsson, who had worked directly with Elon Musk as Chief Product Officer at Tesla, stepped down as head of the company he had founded in 2016, reported Sifted, which is backed by the Financial Times (November 28).
Originally, the proposed definition of the project, called Aurora Lithium, had been an equal stakes venture between the two companies, open to public comment until September 13, 2022. The resultant Environmental Impact Assessment, open to public comment until October 24 of this year, showed Galp with 70 percent and Northvolt with 30 percent.
Galp already had funneled about 40 million euros, 13 million of which was this year, into the proposed Aurora Lithium project, reported Expresso (November 26).
According to Expresso (November 26):
"From what we have been able to ascertain, Aurora Lithium will remain in operation in the short-term, continuing some ongoing work, including environmental licensing, in the event that its shareholders find investors interested in the Setúbal project."
The lithium-conversion project, which was scheduled to start operation in 2026, had been facing delays due to the complexity of the project and uncertainty about funding, reported Reuters (November 27).
Also, low lithium prices following oversupply from China made the project less attractive, according to Reuters.
Maria da Graça Carvalho, Minister of the Environment and Energy, commented on Galp's decision, which she said did not surprise her, in Expresso (November 27):
"This is yet another investment that is not coming to the country, which is worrying and sad. However, it is worrying essentially at a European level because this is not an isolated case. It denotes a certain cooling of the market in relation to the area, to lithium, to batteries. And it means a great strength of Southeast Asia, namely China, and a great European difficulty in competing with China."
There is a need to reflect on how Europe positions itself in relationship to what is happening on a global level in the areas of lithium, the automotive sector, hydrogen and energy, said Minister Carvalho.
The mining of lithium, a key element in electric cars, telephones and computers, has been a fraught issue in Portugal, Europe, and North and South America. Some, mostly companies and governments, argue that mining lithium is an environmentally green way forward and others, mostly residents, plead to save their environment, livelihoods and patrimony. Living in the foothills of the Serra da Estrela, which until two years ago had been considered for lithium mining, I side with the latter.
The majority of the world’s lithium is mined in Australia and South America, and more than 97 percent of it is refined in China, reported Inside Climate News (November 7, 2021).
Due to its purported large lithium deposits, Portugal is being touted as a key player in the European Union’s transition to green energy. Currently, the EU is wholly dependent on imported battery-grade lithium in an increasingly competitive global market.
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