Galp will acquire a 10% stake in Savannah’s Portuguese subsidiaries, which own lithium project
The Mina do Barroso mine is a high-grade, low-iron lithium project. (Credit: 2427999 from Pixabay)
Portuguese energy group Galp Energia has signed a heads of agreement (HoA) with Savannah to acquire a stake in the Mina do Barroso Lithium Project in northern Portugal.
Under the terms of the agreement, Galp will acquire a 10% stake in Savannah’s Portuguese subsidiaries, which own lithium project, for $6.4m cash.
The Mina do Barroso mine is a high-grade, low-iron lithium project.
The investment made by Galp will be used by Savannah to further progress towards its definitive feasibility study (DFS), which is subject to due diligence and completion of definitive agreements relating to the partnership.
Galp expects its strategic presence and experience operating in Portugal to help drive the project to production.
Savannah CEO David Archer said the company believes that the low carbon footprint lithium concentrate from the Mina do Barroso to provide a key foundation for Europe’s energy transition to electric mobility.
“The prospect of having Galp as a partner in Portugal is even more enticing given their outstanding ESG credentials, having been named by the Climate Disclosure Project as one of the energy companies that most effectively enacts climate change-related best practices.
“This record is a result of Galp aligning its portfolio with low-emission business models, products and services and we are pleased that they have recognised Savannah as a partner with similar objectives.”
Savannah, Galp to evaluate offtake agreement for the lithium project
Additionally, Savannah and Galp will assess exclusive terms for an offtake agreement for up to 100,000 tonnes per annum of lithium concentrate from Mina do Barroso project. This represents about 50% of the project’s planned yearly production.
Savannah noted that the agreement would be an important factor in securing financing for construction of the project.
“In particular the Project will provide a catalyst for the development in Portugal of potential new industries in the midstream and upstream part of Europe’s lithium-ion battery ecosystem,” Archer added.