August 29, 2019 / 1:16 PM / 25 days ago

Portugal vows to hold delayed lithium tender by year-end

LISBON, Aug 29 (Reuters) - Portugal is finalising plans for an international licensing tender for lithium exploration to take place this year, part of a government push to make the country Europe’s top supplier of the metal for electric car batteries.

The tender, which had been expected to take place by the end of 2018 and was then slated for June, will happen before the end of this year, the Environment and Energy Transition Ministry said on Thursday.

Portugal is already Europe’s biggest lithium producer, but its miners sell almost exclusively to the ceramics industry and are only now gearing up to produce higher-grade metal for batteries.

Hotly anticipated by investors but opposed by environmental groups, the offering is planned to meet an expected surge in global demand.

“The tender will be launched in 2019 in a guaranteed fashion,” a ministry spokesman said.

Preparations such as a final decision on the areas to be offered are yet to be concluded, he added. The ministry is also updating regulations on “green mining” to mitigate any environmental impact from lithium exploration.

The spokesman would not specify when this year the tender was likely to happen, nor whether it had any chance of going ahead before a parliamentary election on Oct. 6.

Some analysts expect the ruling Socialists to hold off on the auction until after the election so as not to risk voter backlash over environmental risks amid growing concerns about climate change and the environment in general.

Officials have said various international groups have expressed interest in exploring for lithium in Portugal.

A government study has put the potential investment in five of the most attractive lithium-bearing areas at 3.3 billion euros ($3.68 billion).

Officials want to make the granting of future concessions conditional on the construction of a lithium refinery in Portugal, either by the bidder alone or in partnership with another party.

It has selected eight regions for the tender after crossing out another four due to environmental issues.

Environmental groups such as Quercus oppose any large-scale lithium exploration, warning that it would put Portugal’s carbon neutrality goals in jeopardy. ($1 = 0.8973 euros) (Writing by Andrei Khalip; Editing by Jan Harvey)

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