Energy company Galp has collaborated with battery cells and systems supplier Northvolt to create a joint venture (JV) company called Aurora to build a lithium conversion facility in Portugal.

Aurora, which is a 50/50 JV between both firms, will involve in the development of a sustainable lithium conversion plant with an estimated investment of around €700m.

Slated to commence commercial operations in 2026, the facility is expected to have an initial annual production capacity of around 35,000 tonnes of battery-grade lithium hydroxide.

Lithium oxide is a key material used by the lithium-ion battery manufacturing industry.

Northvolt co-founder and COO Paolo Cerruti said: “This joint venture represents a major investment into this area, and will position Europe with not only a path to domestic supply of key materials required in the manufacturing of batteries, but the opportunity to set a new standard for sustainability in raw materials sourcing.”

At present, the joint venture is carrying out technical and economic studies and also evaluating various possible site locations.

Expected to create over 1,500 direct and indirect jobs, the new facility will hold the capacity to deliver lithium hydroxide sufficient for 50GWh of battery production per annum.

Under the deal, Northvolt will receive an offtake for around 50% of the facility’s capacity for use in its battery manufacturing.

According to the company, the new facility is in line with the Portuguese and European industrialisation efforts related to the energy transition.

The new facility will use a proven conversion process, which is powered by green energy to minimise the use of natural gas.

Galp CEO Andy Brown said: “This is a once-in-a-generation opportunity to reposition Europe as a leader in an industry that will be vital to bringing down global CO2 emissions, in line with European and Portuguese climate-change priorities.”