Aurora, the new joint venture to develop a lithium conversion plant

Galp and Northvolt have created a joint venture, under the name Aurora, which seeks to become the starting point for development of an integrated lithium battery value chain, aligned with the Portuguese and European objectives.

The main objective of this agreement is to establish the largest and most sustainable integrated lithium conversion plant in Europe. For this, a plant will be developed with an initial capacity of annual production of up to 35,000 tons of lithium hydroxide for batteries, an essential material for the industrial manufacture of lithium-ion batteries, which is estimated to grow more than tenfold by the end of the decade.

The plant will use a proven conversion process, using the latest advancements and existing technologies to increase sustainability and efficiency. In addition, it seeks to feed the conversion process through the use of green energy, thus minimizing and avoiding the dependence on natural gas that the conventional approach entails.

Currently, the new company is carrying out various technical and economic studies, and evaluating possible locations. Although a final investment decision has not yet been made, operations are expected to begin in late 2025 and commercial activities in 2026. The plant, based on similar projects, could represent an estimated investment of around 700 million euros and create up to 1,500 direct and indirect jobs. In addition, financing options related to the energy transition are also being explored to reinforce the development of the project.

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The proven track record of Galp and Northvolt, as well as their complementary expertise and experience, is expected to be strengthened by establishing relationships throughout the value chain, and specifically to ensure the supply of High quality spodumene concentrate from key suppliers.

The plant will be able to supply lithium hydroxide to produce 50 GWh of battery production per year (enough for approximately 700,000 electric vehicles). NorthVolt, as part of the agreement, will guarantee consumption of up to 50% of the unit’s capacity for use in its own battery manufacturing.

Sustainability standards

Aurora’s partners are committed to standing firm in the application of the highest standards of sustainability, especially in the extraction and concentration of spodumene, in the processing of lithium hydroxide, as well as in all related processes. The partners trust that the Iberian Peninsula has resources that can be extracted with a low greenhouse gas footprint, using the highest standards of environmental protection and human rights, as well as in compliance with best industry practices and environmental policies; thus ensuring long-term sustainable value for all stakeholders.

Galp’s participation in this joint venture responds to the company’s strategy to develop new businesses aligned with the energy transition, taking advantage of its industrial skills and its regional presence as an integrated energy operator and its positioning as one of the largest solar power generation operators in the Iberian Peninsula. The projects must comply with the decarbonization plan adopted by the energy company, as well as its capital allocation guidelines, as announced in the last Capital Markets Day.

Paolo Cerruti, Co-founder and COO of Northvolt, commented: “The development of a European battery manufacturing industry offers a huge economic and social opportunity for the region. The expansion of the new European value chain to the upstream, to include raw materials, is of vital importance. This joint venture represents a significant investment in this area and will provide Europe not only with a national supply channel for key materials to manufacture batteries, but also with the opportunity to establish a new standard of sustainability in the supply of raw materials. This initiative complements a global procurement strategy based on high sustainability standards, diversified sources and less exposure to geopolitical risks. “.

«This is a unique opportunity to reposition Europe as a leader in a sector that will be vital to reducing global CO2 emissions in line with European and Portuguese priorities on climate change ”, Galp CEO Andy Brown said. «To be successful in this push, we must all work together – industry and decision makers – with a sense of urgency, because if we don’t take on this role today, others will. ‘

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