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Savannah Lithium Suffers Blow in Portugal and London

Updated: Aug 27


Location of the proposed Mina do Barroso (Savannah Resources)

 

Savannah Resources sustained a setback when the Portuguese Environment Agency delayed its decision on a proposed lithium mine at Barroso in the district of Vila Real and ordered the mining company to adjust its environmental assessment plan, according to a press release, reported Observador (July 6).


At the same time, the Chief Executive Officer, David Archer, stepped down after nine years at the helm. Dale Ferguson, the company’s technical director, will assume the role on an interim basis while Savannah searches for a permanent replacement, reported Proactive Investors (July 6).


The British firm’s share price immediately plunged 30 percent to 2.33 pence in London on July 6, reported Morningstar (July 6).


“Savannah has up to six months to work with the Portuguese Environment Agency (APA) on certain aspects of the project’s design and associated environment, ecology and socio-economic considerations, based partly on feedback from stakeholders. It would then resubmit them for consideration,” reported mining.com (July 6).


Ferguson said: “Savannah’s team will make its best endeavor to submit any revised plans to APA as soon as practicable, but under the legislation, a DIA (Environmental Impact Declaration) would be reached no later than March 2023.”


According to the company, the six months of work is intended “to further optimize certain physical aspects of the project and associated environmental, ecological and socio-economic considerations, and submit them for consideration, reported Observador.


Aspects under consideration include adjustments to infrastructure such as access roads and waste storage areas. They also address the improvement of the proposed mine’s impact on local businesses and better access to Savannah’s resources and technical expertise. It also includes an in-depth project for the local community.


Mining.com wrote: “While technical issues are usually easy to address, analysts note that opening the project’s EIA (Environmental Impact Assessment) to comment from local stakeholders will be a problem.”


According to Asktraders.com: “There is considerable opposition to this mine in Portugal. The more local the consultations, the more likely it is that a spanner will get thrown in the works,” said Tim Worstall, a financial markets writer.


“Socio-economic considerations include the impact of the project on other local businesses, which is anywhere between not a worry and a very large worry,” said Worstall.


The company statement said, according to Observador: “Assuming a positive decision from DIA is received (by March 2023) or earlier, we believe that project development will still be on track to be able to supply concentrate for Europe’s first-generation lithium conversion plants when they come on stream in the middle of the year” adding that it has “a healthy cash-flow situation, which will comfortably help us in this licensing process and in the next phase of the definitive feasibility study.”


The anticipated increased demand for electric cars has propelled lithium into the category of “white gold” as mining companies compete for extraction contracts around the world. The light metal is used in batteries for phones, laptops as well as electric cars.


Due to its large lithium deposits, Portugal is being touted as the key player in the European Union’s transition to green energy. Currently, the EU is wholly dependent on imported battery-grade lithium in an increasingly competitive global market.


Meanwhile, there has been continued opposition to lithium mining at all proposed sites from citizen and environmental groups and municipal presidents, who argue that their livelihoods and heritage would be destroyed by this activity. The opposition also cites a lack of transparency and communication.


I live in the foothills of the Serra da Estrela, and I oppose lithium mining in Portugal.


Savannah has the most advanced lithium extraction project in Portugal, and it claims that the proposed mine has the “most significant resource of hard rock spodumene lithium” in Europe. (Rio Tinto, whose contracts with Serbia have been revoked due to environmental concerns, has said the same about Serbia, reported Reuters (January 20).


Savannah submitted its Environmental Impact Assessment (EIA) to the Portuguese Environment Agency (APA) in May 2020, receiving a preliminary stamp of approval one year later, reported Reuters (June 8). The environmental agency then opened public consultation on the project between April 2021 and July 2021.


Ahead of its annual general meeting, Savannah’s chairman, Matthew King, said: “The finalization of the EIA is a political process over which Savannah has little control. This time last year, we had expectations that the decision would have been received by now.”


The proposed mine is located in the parishes of Dornelas and Covas do Barroso in a World Agricultural Heritage Site since 2018, reported Publico (May 22, 2021). The planned concession area has been expanded from 120 to 593 hectares.


The parish council of Covas do Barroso in the municipality of Boticas filed a lawsuit against the State over the exploitation of lithium in the Barroso mine in Tras-os-Montes, reported Lusa news agency in Jornal de Negocios (February 11).


After “years of struggle and realizing that something was not right in the authorization process” regarding the Barroso mine, the parish council of the district of Vila Real decided to take legal action, according to Jornal de Negocios.


The lawsuit was filed in the Administrative and Tax Court against the Portuguese State and the Ministry of Economy.


With the legal case, the parish council of Covas don Barroso intends to annul administrative actions, such as the addition of lithium to the mineral deposits to be explored in that territory and the expansion of the planned area, which were carried out through an addendum to the pre-existing contract, reported Jornal de Negocios.


The company, Savannah Resources, said that it constituted itself as a counter-interest in the process through its subsidiary in Portugal, Savannah Lithium.


In 2006, the parish council explained that the State and Saibrais – Areias e Caulinos, S.A. signed a concession contract for the exploration of mineral deposits of feldspar and quartz for an area of 120 hectares under the name Mina do Barroso, having been “only approved” by the Environmental Impact Statement for those two minerals, according to Jornal de Negocios.


In 2016, the parish council said, an amendment to the 2006 concession contract was signed by the company and the State “maintaining the legal obligation inherent to the concessionaire and the obligation to carry out the exploration works in accordance with the Environmental Impact Statement” issued previously.


“Since prospecting and exploitation of the lithium mineral had not been approved in the contract dated May 12, 2006, the amendment to the contract could not include the allocation of any minerals other than feldspar and quartz,” explained the parish, stressing that it “could never have been awarded the concession of lithium mineral exploration”, reported Jornal de Negocios.


Like its population, the parish council had never heard about prospecting for lithium. It pointed to the destruction of an ecosystem “perpetuated over centuries” and of a “priceless natural wealth” that has been recognized as a World Agricultural Heritage site, according to Jornal de Negocios.


Furthermore, the parish council said that “there could not have been any change in the cadastre registration CC-DM-032 to C-100, nor have the planned area of 120 hectares been changed to an area that exceeds 500 hectares.


Savannah Resources had signed a partnership agreement in May 2017 for prospecting and research in Barroso but became full owner of the mine in June 2019.


The company announced a decarbonisation plan to implement in Barroso in the second quarter of 2022, reported Observador (March 7).


The decarbonisation plan is in partnership with the Portuguese consultancy, Ecoprogresso, of Grupo Quadrante, accustomed to dealing with multiple aspects of environmental management, such as carbon management and strategies for mitigating and adapting to climate change.


“By initiating a decarbonisation strategy at the Barroso lithium project in northern Portugal, Savannah Resources is taking another step to ensure that lithium supplied to the European value chain results in the production of zero-carbon lithium-ion batteries,” said Savannah Resources in a statement sent to the media.

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