Savannah Resources courts partners for Barroso lithium project in Portugal

London-based Savannah Resources (LSE-AIM: SAV) says it has received proposals from several companies to partner on its Barroso lithium project in northern Portugal. 

Interest in the project has picked up since Savannah received a favourable environmental impact statement from the Portuguese Environment Agency in May, the company said on Monday. In July, it began looking for partners and hired British bank Barclays and financial consultant Barrenjoey to oversee the process.

“We have received attractive draft proposals from players situated at a number of different points along the lithium battery value chain, and from groups looking to gain exposure to this critical new industry,” CEO Emanuel Proença said in a statement.

The next step is to evaluate the proposals to identify those willing to help Savannah secure financing and offer additional benefits as part of a long-term commercial relationship, the CEO said. He didn’t name the contenders. 

Savannah, which acquired three-quarters of Barroso in 2017, said it needs $236 million to start developing what is slated to be western Europe’s largest spodumene lithium mine. It will also yield a feldspar and quartz co-product that will be sold to ceramics industry customers locally and in neighbouring Spain.

Over the estimated 14-year mine life, Barroso is forecast to reach a throughput of about 1.5 million tonnes a year based on a resource of 20.5 million tonnes grading 1.05% lithium oxide. 

Potential production is estimated at 191,000 tonnes a year of 5.5% spodumene concentrate. The company says that’s enough to supply a “material proportion” of Europe’s lithium demand over the coming decades.

Savannah says it wants to cut the project’s direct emissions (known as Scope 1) to zero. Indirect emissions (or Scope 2), which are those tied to inputs of miner purchases, could be lowered by 54% from the original 2019 forecast thanks to a potential reduction in the plant’s power requirement, it said. 

Portugal, already Europe’s top lithium producer, accounts for about 11% of the global market. But its output is entirely used to make ceramics and glassware, which is why Europe relies on lithium imports from Latin America’s Lithium Triangle, as well from Australia and China.