Savannah resumes lithium prospecting as Portugal overturns injunction

LISBON (Reuters) - Savannah Resources said on Friday it would immediately resume prospecting works at its lithium project in northern Portugal after the government helped it overturn a precautionary injunction filed by landowners.

London-based Savannah sees the Barroso project's deposit of spodumene, a lithium-bearing mineral, as the most significant in Europe, with the latest prospecting results pointing to a larger deposit than the previously estimated 28 million metric tons of high-grade lithium for batteries.

The project, which faces opposition from local residents and environmentalists, could be key to the European Union's ambition to reduce dependence on countries such as China for strategic raw materials.

The injunction sought to reverse the government's authorisation for the company to access land belonging to others and forced Savannah to suspend prospecting on some land plots at Barroso two weeks ago.

Savannah said in a statement the government had filed a "reasoned resolution" citing wider public interest, and that the court had ended up overturning the injunction.

The government argued that any postponement of the works "is more costly and seriously detrimental to the public interest", according to Savannah's statement.

The company expected to make up for the delay over the remainder of the programme, it added.

Barroso is Savannah's only venture. It plans to start commercial output there in 2027 and is working to complete the project's definitive feasibility study and final environmental licensing process in the second half of this year.

(Reporting by Sergio Goncalves; Editing by Aidan Lewis)