Lisbon, Oct. 28, 2024 (Lusa) - The CEO of Portuguese energy company Galp said on Monday that the company will not rush into a final investment decision on the construction of a lithium refinery in Portugal until it has guarantees of an "adequate return" for the project.
"We are in the final stages of engineering details and discussing incentives. A lot of work has been done and is still ongoing. But I have to say that the market is currently very challenging and we're in no hurry to make a final investment decision until we see an adequate return for the project, and we don't think we're at that point right now," said the CEO.
Filipe Silva was speaking during a conference call with analysts about the oil company's results for the first nine months of the year, when Galp recorded a profit of €890 million, 24% more than in the same period in 2023, and an EBITDA (earnings before taxes, interest, amortisation and depreciation) of €2.609 billion, down 8%.
When asked by analysts about the Aurora Lithium project, a joint venture between Galp and the Swedes from Northvolt to build a lithium refinery in Setúbal, Filipe Silva said he was ‘concerned’ that the project could "be orphaned if there is no lithium mining in Portugal", as this process "also seems to be delayed".
"We're not going to run the risk of making a final investment decision on a conversion unit until we see mining [underway] and Portuguese lithium spodumene as part of the equation," he emphasised.
About a month ago, an official Galp source confirmed to Jornal de Negócios newspaper that the refinery would be delayed by two years, from 2026 to 2028, but assured that the company remains committed to the project, whose budget has almost doubled, from 700 to €1.3 billion, between 2022 and this year.
Also holding back the project's progress has been the issue of funding, after the Portuguese oil company abandoned the mobilising agenda under the Recovery and Resilience Plan (PRR) to create a lithium battery value chain in Portugal, due to the "incompatibility of the execution schedule with the required deadlines".
As for the green hydrogen production project underway in Sines, whose final investment decision was taken in 2023, Galp says it is ‘making good progress’ and expects commercial operations to begin in 2026.
At 1.30pm in Lisbon, Galp shares were quoted at €15.80, down 4.9% on Friday's close (€16.60) and 994,025 shares had changed hands, worth a total of €15.971 million, according to data from Euronext Lisbon.
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