Business
Galp drops plans to build Aurora lithium refinery in Portugal
Global Banking & Finance Review®
Company
(Reuters) – Portuguese energy company Galp said late on Tuesday it has dropped its plan to build the Aurora lithium refinery after it failed to find a new partner to replace Northvolt, a Swedish maker of batteries for electric vehicles.
Galp was left alone in early 2024, when Northvolt said it would not invest in the 50-50 joint venture set up in November 2021 to build a lithium processing plant in Setubal, on Portugal’s coast.
The project’s investment was estimated at more than 1 billion euros ($1.05 billion).
The refinery, which was scheduled to start commercial operations in early 2026, was facing delays due to the complexity of the project and uncertainty about funding.
Low lithium prices following oversupply from China also made the project less attractive.
Northvolt, Europe’s biggest hope for an electric vehicle battery champion, last week filed for U.S. Chapter 11 bankruptcy protection after talks with investors and creditors including Volkswagen and Goldman Sachs for funding failed.
($1 = 0.9544 euros)
(Reporting by Joanna Jonczyk-Gwizdala, Editing by Inti Landauro and Louise Heavens)
A lithium refinery is a facility that processes lithium ore into usable lithium products, which are essential for manufacturing batteries, especially for electric vehicles.
A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific project while maintaining their individual identities.
Bankruptcy protection is a legal status for individuals or businesses that cannot repay their debts, allowing them to reorganize or liquidate their assets under court supervision.
Electric vehicle batteries are rechargeable batteries used to power electric vehicles, providing the energy needed for propulsion and other electrical systems.
Lithium is a chemical element used primarily in rechargeable batteries for mobile phones, laptops, and electric vehicles, known for its lightweight and high electrochemical potential.
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