UPDATE 1-Portugal plans to open lithium licensing auction in May - minister

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LISBON, April 10 (Reuters) - Portugal hopes to launch an international auction of lithium exploration licences next month, with bidders expected to commit to building a local lithium refinery, the environment and energy transition minister said.

Joao Matos Fernandes told parliament on Wednesday that eight regions had already been selected for the auction, with another one being studied.

“We really want to launch this auction in May,” he said. “The...contracts will make it very clear that a concession contract will only be awarded to those who build a lithium refinery or associate themselves with an existing (refinery) project,” he said.

The auction, initially planned for last year, is part of a plan to make Portugal Europe’s top supplier of lithium for electric car batteries and meet an expected surge in global demand for the metal.

Officials have said various international groups have expressed interest in exploring for lithium in Portugal, which is the world’s sixth-largest producer and Europe’s biggest.

Its miners sell almost exclusively to the ceramics industry and are only now gearing up to produce the higher-grade lithium that is used in electric cars and electronics.

A government study last year put the potential investment in five of the most attractive lithium-bearing areas at 3.3 billion euros. (Reporting By Sergio Goncalves, writing Andrei Khalip, editing by Axel Bugge and Kirsten Donovan)