Portugal: AMG Critical Materials buys into lithium miner Savannah Resources

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Portugal: AMG Critical Materials buys into lithium miner Savannah Resources

12:22 CAT | 20 Jun 2024

File photo: Lusa

Savannah Resources on Thursday announced a partnership agreement with the AMG Critical Materials group, which has made a €19 million investment in the capital of the company that wants to exploit the lithium mine in Boticas in northern Portugal.

“This agreement recognises the great potential of the Barroso lithium spodumene resource. The partnership announced today will allow Savannah to continue to grow its team in Portugal and continue to develop its various work fronts,” said Emanuel Proença, CEO of the company that owns the Barroso lithium project in the Vila Real district, in a statement.

For Mr Proença, the partnership with AMG, an international critical materials company and one of the leaders in the lithium sector in Europe, “also represents a greater likelihood of reinforcing investment in the national lithium sector, through studies into the possible construction of a feldspar pilot plant and another lithium spodumene refinery by AMG”.

According to the statement, with this agreement AMG is making an investment of around €19 million in Savannah’s capital.

As a result, AMG Critical Materials N.V. Group, which is listed on the Amsterdam stock market and includes the companies AMG Lithium, AMG Vanadium and AMG Technologies, now controls 15.77 % of the company’s capital.

This partnership, according to the statement, places the Barroso lithium project “in a position of great stability”, as a result of a “capital increase” and “project reinforcement financing”, as Savannah “secures full funding to complete its ongoing and planned work streams, including for example team expansion and relevant land acquisitions”.

AMG is also committed to buying 45 kilotonnes per annum (ktpa) of Savannah’s spodumene production (up to 25% of the total) over the first five years of production.

Savannah said that it is keeping most of its production capacity unallocated and that this allows it to sell it to an additional partner or on the open market, adding that the mixture of quartz and feldspar for the ceramics industry also remains free for new partnerships.

The company also announced that it will work together with AMG on a study for the joint construction of an additional feldspar/spodumene pilot plant in Portugal and a study for the construction of a spodumene refinery for lithium carbonate, to be installed in Portugal or Spain.

“We also see two desires materialising, which are to keep Barroso’s lithium at the service of the European automotive industry and to attract more investment and jobs to Portugal. We can thus, in partnership, make a very material contribution to the European targets for the extraction and processing of lithium for batteries set out in the European Critical Raw Materials Regulation (CRMA),” said Emanuel Proença.

AMG’s CEO, Heinz Schimmelbush, was also quoted in the statement as saying that the partnership with Savannah “advances AMG’s lithium expansion strategy and further solidifies the group’s supply of spodumene”.

The Barroso mine obtained its environmental licence in May 2023 and, according to Savannah, in June last year the Scoping Study confirmed the “economic potential of the project”, with production scheduled to begin in 2026.

“At that stage, Savannah will start producing enough lithium for around half a million vehicle batteries a year, enough to produce the equivalent of more than three times the vehicle purchases in Portugal every year,” said the company, which has been in business for 15 years, seven of which have been concentrated in Boticas.

AMG is a company focused on the production and development of energy storage materials such as lithium, vanadium and tantalum, with 3,600 employees and production facilities in Germany, the United Kingdom, France, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique.

Source: Lusa