Galp and Northvolt select Setúbal to build advanced lithium conversion unit

Galp and Northvolt have selected the port city of Setúbal as the location for their Aurora lithium conversion plant, which aims to become a steppingstone for the development of an integrated lithium-battery value-chain in Europe.

The plant, which will be one of Europe’s largest and the most sustainable, is set to have an initial annual production capacity between 28,000 and 35,000 tons of battery-grade lithium hydroxide – a critical material required by the lithium-ion battery manufacturing industry, which is expected to grow significantly by 2030.

The plant will use a proven conversion process, leveraging recent process improvements and technologies to increase its sustainability and efficiency.

Additionally, the JV is seeking to enable the use of green energy to power the conversion process, thereby minimizing reliance on the conventional natural-gas powered approach.

André Martins, the Mayor of Setúbal, said: “Setúbal deserves this investment. The Municipality of Setúbal has invested in the qualification of this territory. Everyone recognizes this reality, which is the result of a great desire to make more of Setúbal. We are very proud that this was the chosen municipality which, as is recognized, has qualified industrial areas, good roads, rail and port accessibility and an equally attractive city, social and cultural environment.

Andy Brown, Galp CEO said: “This is the type of project Portugal and Europe should develop for economic growth and to build a sustainable energy future. 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.”

Paolo Cerruti, Co-Founder and COO of Northvolt, said: “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.”

The plant is expected to represent an investment close to €700 million, and to create more than 200 qualified direct jobs and more than 3,000 indirect jobs in the region.

A final investment decision is yet to occur, but the JV is envisaging a start of operations by the end of 2025 and start of commercial operations in 2026.

Setúbal was picked from several possible locations because it fulfilled all the requirements set forth by Aurora, the 50%-50% joint venture between Galp and Northvolt that will be leading the project going forward.

The site, located in the Sapec Bay Industrial Park, has good access to infrastructure, railway, and port facilities. The site is also ideally placed to source reagents, and is close to by-product users, namely cement and pulp & paper industries, but also close to Portugal’s current car manufacturing centre.

The plant will be able to deliver lithium hydroxide sufficient for 50 GWh of battery production per year (sufficient for more than 700,000 electric vehicles). As part of the JV agreement, Northvolt will secure an offtake for up to 50% of the plant’s capacity for use in its battery manufacturing.

The JV partners are unwavering on driving the highest standards of sustainability, notably in the extraction and concentration of spodumene, the processing of lithium hydroxide, as well as in all related processes.

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