In mid-2023 an academic paper titled “Anticipating lithium extraction in northern Portugal: A Sacrifice Zone in the making” was published in vol. 30 of the Journal of Political Ecology. Written by Leonie Saleth and Ingrid Varov of the University of Copenhagen and the Stockholm Environment Institute Tallin Centre, it presented a carefully researched study of the controversial proposals for the exploitation of Portuguese mineral assets made by groups of international investors headed by Savannah Resources Plc. This company describes itself as “a leading conventional lithium development company which owns one of the most significant lithium raw material assets within the European Union”. The paper investigated impartially the resistance offered by a majority of the citizens of Covas do Barroso on the grounds that huge tracts of their asset - the countryside - would be lost beyond recall due to the pollution of an estimated fifteen years of intensive mining operations.

During the subsequent eighteen months, the two sides engaged in a tactical and often bitter confrontation which attracted the attention of both national and international media as being a St. George and the Dragon conflict with portent for victory by the fiery beast and the consequent opening of legislative gateways to a flood of similar developments.

Powerful mining companies are able to afford intensive public relations campaigns led by the cleverest of lawyers. The “little people” are without financial resources - only determination to preserve their historic way of life. Recently this struggle has culminated in the reversal of a local court injunction to delay the planning process. The blame has been placed fairly and squarely on Ministers, officials and even the judiciary who have been lobbied aggressively by Savannah citing that the project had been presented as being of strategic interest to Portugal and the EU and thus should be held as being in the best public interests.

This recrimination has been followed with accusations of corruption and the deliberate dissemination of misinformation to persuade a previously sympathetic urban majority that the inconvenient uprooting of a rural community and its culture is for the “public good” and conforms to the requirements of the green revolution forced by climate change. The Sacrifice Zone has been made.

Comparisons have been made to major works of the past (e.g. the construction of barrages) where similar communities have been dispossessed of their land and possessions by compulsory purchase at penurious levels of compensation.

Before drawing conclusions or making a forecast of the potential in Portugal for the exploitation of its mineral wealth, it would be advantageous to take an overview of the positioning of lithium in the global commodity markets during year 2024.

With an annual output of 86,000 metric tons, Australia is by far the largest producer of ore from estimated reserves of 4.8 million metric tons. Chile with 44.000 mt from 9.3 mmt and China with 33,000 mt from 3.0 mmt take 2nd and 3rd place. Together they outstrip the rest of the world. Argentina produces only 9,600 mt from reserves of 3.6 mmt. Portuguese production of lower grade ore which is exported mainly for use in the ceramics industry is 380 mt.

A total of US$ 1.11 billion was invested by mining companies during year 2024 in lithium exploration. This represents only 9% of the total for non-ferrous metals taking third place behind gold (44%) and copper (26%). Ten years ago, it was not even in the top ten and indicates a growth led by the use of this lightweight but tough metal to (1) boost battery performance in electric vehicles (2) manufacture smartphones and other equipment for the digital age and (3) improve performance for war weapons.

Nearly two thousand miners are registered worldwide for contractual activity but most of these can trace their ownership through a myriad of subsidiaries and private equity funds to seven billionaire mega-companies led by Chilean SQM with a market cap. of US$ 10.6 billion and an annual capacity in excess of 200,000 mt part of which is contracted as a long-term lithium hydroxide supply to Hyundai, Kia, Ford and LG Energy. It is closely followed by Chinese Tianqi (US$ 6.72 billion) which has signed a joint venture with Australia´s IGO for 51% control of Greenbushes – one of the largest lithium mines of planet Earth. The minority shareholding in this Talison enterprise has been bought by the U.S. Albemarle corporation (US$ 9.06 billion). This examples the coalescence in geopolitical terms of international investment where it is increasingly difficult to know who owns what and who will benefit from the exploitation of rare, finite resources.

The USA has only two sites in its continental territory for the production of lithium both by the extraction from brine and consequently is the largest importer of ores – mainly from South America but also Africa and China. This accounts for its recently disclosed intention to acquire the entire production from Canada (presently 3,400 mt), Greenland where the retreating ice-cap is permitting exploration of unassessed mineral resources and Ukraine´s rich mixture of rare earths and non-ferrous metals.

To guarantee a steady flow of raw materials to the behemoth Tesla EV factories, Elon Musk has stated that the US must no longer rely on paper contracts but should aim to own at least one quarter of mineral resources. However, Tesla is more focused on developing its own refineries the first of which has just been opened in Texas where the South Water Authority has authorised an astounding daily consumption of 8 million gallons (30 million litres). This approximates to the needs of the proposed nearby data processing centre for AI and will also require a huge leap in energy supply.

On the world stage the economic super-powers are positioning themselves to suck in from vassal states the resources which they need to prolong the dominance inherited from previous industrial revolutions. They will achieve this in partnership with (or subject to) Artificial Intelligence which may possibly emulate the Mamelukes in the role of slave turned master. It is in this context that we should view the prognosis for Portugal and the EU.

In our own back yard, Savannah has a mysterious identity. Three CEOs have come and gone in as many years while shares have continually changed hands. At one time, Omani investors were thought to be the majority holders. In June 2024 it was reported that €19 million had been invested by the AMG group which, in turn, is owned by the Mercedes-Benz Group. So, we have a complex situation whereby a major asset of the Portuguese people (and the EU) is being bartered not for the “public good” but to the highest anonymous bidder who may put it to whatever use it may please - peaceful or warlike.

The independent state of Norway had the wisdom to create a sovereign fund to invest for the benefit of all its citizens the immense wealth derived from North Sea oil. Instead of establishing even more quangos to evaluate industrial developments proposed by foreign entities and deities, Portugal and the EU should firmly take direct control of their remaining assets by establishing a similar body which can stringently regulate their utility

As such, the gallant resistance by the good people of Covas do Barrosa will not be in vain.

by Roberto Cavaleiro - Tomar 01 March 2025