London-listed Savannah Resources Plc is raising funds for its lithium mine project in Barroso, northern Portugal, which is expected to become Europe's largest domestic source of lithium resources, marking a critical phase in Europe's strategy to secure battery metal supplies.
The company has completed the feasibility study for the Barroso project and begun planning construction financing. An investment of €300-350 million is required over the next two and a half years. Earlier this year, the EU designated it as a strategic project, with Savannah anticipating this will secure funding to cover part of the costs. The CEO noted that since obtaining the concession in 2017, the company has self-funded €50 million, but stressed that EU support—whether repayable or non-repayable—is essential to accelerate development during the construction phase.
The project's advancement coincides with global lithium industry challenges: major producers in Australia, Chile, and China face significant losses due to the rapid decline in lithium prices earlier. Although recent price rebounds offer hope for recovery, fundraising remains difficult, making government support crucial for early-stage projects. The EU has faced criticism for slow action, remaining entirely dependent on imports of critical minerals like lithium, with most strategic projects lagging behind schedule.
The CEO stated the Barroso project achieves break-even at lithium ore prices of $600/mt, aiming to compete with large producers in Europe through cost advantages. Savannah plans to target niche markets leveraging supply chain security and short-haul transportation benefits. The commissioning time has been delayed from 2027 to 2028, with the project potentially valued at €1 billion. Although Portugal has mined lithium for ceramics for decades, it has yet to achieve large-scale battery-grade material production.
Currently, Portugal is establishing itself as a European battery supply chain hub: CALB began construction this year on a €2.3 billion lithium battery plant near the deep-water port of Sines on the southwest coast; Estarreja, 50 km from Porto, is a preferred site for lithium refining projects; Stellantis' Viseu plant started mass-producing pure electric light commercial vehicles last year; Volkswagen's Palmela factory plans to produce new EV models, expected to launch in 2027.
The Barroso project also faces controversy: during a 2023 public consultation, the company sought feedback on potential risks to water quality, biodiversity, and agricultural heritage; exploration was briefly suspended this year due to land ownership disputes; on September 3, a UN committee ruled that Portugal violated international treaties by restricting information disclosure during the environmental permitting process for the Barroso mine. Savannah's CEO emphasized enhanced community engagement, converting an information center into a community hub, and stated, "This will be a high-quality project for both local stakeholders and shareholders."
