London-listed Savannah Resources (LON: SAVS) said on Friday it had been awarded a €110-million ($128 million) grant by the Portuguese government for its northern Portugal lithium mine, showing official backing for a highly contested project.
The company said around €82 million of the non-reimbursable grant would fund the initial capital expenditures of the project in Portugal’s Barroso region, while the remainder will be linked to operational performance milestones.
The estimated reserves of the Barroso deposit of spodumene -one of lithium-bearing minerals – stand at more than 39 million metric tons, making it the largest such deposit in Europe, the company said.
The success of projects like Savannah’s in Portugal is seen as a key test of Europe’s ability to reduce its dependence on imports from China and other countries for lithium and other materials essential to the transition to clean energy.
However, Savannah has faced strong opposition from local residents and environmentalists because Barroso has been a World Heritage site for agriculture since 2018.
Chief Executive Emanuel Proença said the grant represented another “highly important milestone” for Savannah and “underlines the Portuguese state’s significant support for the project’s delivery,” mirroring moves by other governments to support strategic projects across Europe.
“The scale of the financial commitment being made by the Portuguese state will provide a significant contribution towards the project’s capex as we target production from 2028,” he said in a statement.
According to Portugal’s official gazette, the grant was approved on January 7 by Secretary of State for the Economy Joao Ferreira, qualifying as an incentive “for large investments in carbon-neutral and strategic net-zero transition sectors.”
($1 = 0.8588 euros)
(Reporting by Sergio Goncalves;Editing by Tomasz Janowski)
