Northvolt Venture Plans €700 Million Lithium-Conversion Plant in Portugal
(Bloomberg) -- Swedish battery startup Northvolt AB and energy firm Galp Energia SGPS SA plan to develop a lithium-conversion plant in Portugal to supply the region’s growing electric-vehicle industry.
The companies said Tuesday they’ll set up a joint venture with the goal to build a facility with an annual production capacity of 35,000 metric tons of lithium hydroxide -- enough to supply around 700,000 EVs. Northvolt would get half of that for its battery production.
The factory, which they say would be Europe’s largest of its kind, may cost around 700 million euros ($790 million) and create 1,500 direct and indirect jobs based on similar projects, according to a statement.
The venture “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,” said Paolo Cerruti, co-founder of Northvolt.
READ MORE: Thiel-Backed Lithium Miner to Build Smelter Near Tesla Plant
While the firms haven’t yet made final decisions on an exact location and the overall investment, they aim to have a site up and running in 2026. The venture, called Aurora, will also continue to explore other opportunities along the value chain, the companies said.
Portugal’s port city of Sines is a “serious and credible” location, but there are “multiple locations we are looking at, including in the north,” Andy Brown, chief executive officer of Galp, said at a press conference in Lisbon.
Lisbon-based Galp said in June it’s looking at opportunities in lithium processing and in January signed an agreement with Savannah Resources Plc to explore a lithium field in northern Portugal. The preliminary agreement with Savannah has now expired, even though both companies remain in contact, said Brown.
“We are keeping our options open on where we want to source our raw materials,” said Brown. “Portugal has significant lithium resources but there are resources in other parts of the world as well.”
Northvolt was co-founded in 2016 by former Tesla Inc. executives and has since forged multi-billion-dollar supply deals with Volkswagen AG and BMW AG.
©2021 Bloomberg L.P.