Northvolt & Galp to build lithium plant in Portugal

The Swedish battery cell manufacturer Northvolt is setting up a 50:50 joint venture with Portugal’s energy company Galp. Under the direction of the joint venture Aurora, a lithium conversion plant will be built in Portugal. The future location of the plant is still under discussion.

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However, it is already clear that the plant will have an annual production capacity of up to 35,000 tonnes of battery-grade lithium hydroxide and will begin commercial operation in 2026. Northvolt insists that the Portuguese plant will be “the largest and most sustainable integrated lithium conversion plant in Europe” and “a milestone in the development of a European battery value chain”.

According to the parent companies, the newly launched joint venture is currently conducting technical and economic studies and examining several possible locations. A final investment decision is still pending, they say. Northvolt estimates that the investment volume would amount to about 700 million euros, and that it will seek subsidies to support the project. In return, up to 1,500 direct and indirect jobs would be created.

The plant will be able to produce 35,000 tonnes of lithium hydroxide per year. According to Northvolt, this quantity allows for battery production in the order of 50 GWh or the construction of 700,000 electric vehicles per year. As part of the agreement with Galp, Northvolt is committing to purchase up to 50 per cent of the plant’s capacity for use in its own battery production.

“The development of a European battery manufacturing industry provides tremendous economic and societal opportunity for the region. Extending the new European value chain upstream to include raw materials is of critical importance,” says Paolo Cerruti, co-founder and COO of Northvolt. “This joint venture represents a major investment into this area, and will position Europe with not only a path to domestic supply of key materials required in the manufacturing of batteries, but the opportunity to set a new standard for sustainability in raw materials sourcing. This initiative comes to complement a global sourcing strategy based on high sustainability standards, diversified sources and reduced exposure to geopolitical risks.”

Northvolt is known to be aiming to realise lithium-ion batteries with a minimal carbon footprint, and with this in mind has announced, among other things, that it intends to source half of its total raw material requirements from recycled batteries by 2030. The Swedish company’s customers include BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar. The contracts signed are said to accumulate to a value of more than 27 billion US dollars.

Galp is a Lisbon-based energy group with activities in the classic energy services sector, but also in the oil and gas industry and the solar energy market.

Update 14 April 2022

The location of the lithium hydroxide plant has now been decided. According to both companies, it will be built in Portugal’s port city of Setúbal. Commissioning is expected to take place by the end of 2025 and commercial operations will start in 2026.

The Aurora joint venture lithium conversion plant is expected to have an initial production capacity of 28,000 to 35,000 tonnes of battery-grade lithium hydroxide per year. According to Northvolt, up to €700 million will be invested, creating more than 200 direct jobs and more than 3,000 indirect jobs in the region.

“This is the type of project Portugal and Europe should develop for economic growth and to build a sustainable energy future,” says Andy Brown, CEO of Galp. “Securing sustainably produced materials for the exponentially growing battery industry is a strategic priority for Europe. We thank the Setúbal municipality for welcoming us and we look forward to our partnership creating jobs and economic value.”

“The establishment in Setúbal marks a key milestone for Europe on the road towards building up a full battery ecosystem on the continent, as well as demonstrating a sustainable approach to the lithium conversion process,” said Paolo Cerruti, co-founder and COO of Northvolt.

northvolt.com, northvolt.com, galp.com (both update)