The Portuguese government has provided Savannah Resources PLC (LON: SAV) (OTCMKTS: SAVNF) with substantial financial backing for a hard rock lithium mine in the country’s north.
The London Stock Exchange-listed miner made the reveal in a press release on Jan. 9. National officials are providing the company with a non-reimbursable grant valued at up to €110 million.
The controversial mine site, known as the Barroso Lithium Project, is one of the top spodumene lithium resources in the continent. It is located in the Barroso region of northern Portugal.
Barroso holds estimated reserves exceeding 39 million metric tons of spodumene ore, grading over 1 per cent lithium oxide. This makes it Europe’s largest spodumene deposit, crucial for producing lithium concentrate used in batteries for electric vehicles and energy storage.
In comparison to other European spodumene resources, Barroso stands out for its scale. Finland’s Keliber project, operated by Sibanye Stillwater Ltd (NYSE: SBSW) (FRA: 47V), is another of note that is set to ramp up production in 2026, but its reserves are significantly smaller. Also, Austria’s Wolfsberg project, run by European Lithium Ltd (OTCMKTS: EULIF) (FRA: PF8). This operation is another key European hard rock lithium site, focusing on underground mining with production targeted for later in the decade.
These projects, along with emerging ones in Serbia and Norway, aim to bolster Europe’s lithium supply chain, but none match Barroso’s reserve size. Savannah’s mine could produce about 2.6 million metric tons of spodumene concentrate over 14 years grading at 5.5 per cent lithium oxide.
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Locals and environmental advocates are not happy
The mine’s controversy stems from environmental and social concerns. The Barroso area has been designated as a Globally Important Agricultural Heritage System by the Food and Agriculture Organization since 2018. This recognition has raised fears of damage to protected landscapes, biodiversity and water resources.
Local residents and NGOs oppose the open-pit operations, citing potential disruption to community rights and cultural heritage.
Public consultations have highlighted these issues, leading to legal challenges and United Nations scrutiny under the Aarhus Convention for possible breaches of public participation rights.
Historical mining in Portugal has fuelled mistrust, despite Savannah’s pledges for sustainable practices like renewable energy use. Meanwhile, supporters argue the project is vital for Europe’s energy transition, reducing reliance on imports from China.
On the financial front, Savannah Resources maintains a solid yet developing position. As of Jan. 9, its market capitalization stands at approximately US$169.6 million with an enterprise value of US$157.5 million.
The company raised US$6.45 million in 2025 to fund post-feasibility work. Savannah has advanced drilling beyond 50,000 metres while progressing toward a definitive feasibility study and attaining environmental licensing.
With the EU designating Barroso as strategic under the Critical Raw Materials Act, Savannah is seeking to commence production in 2028. Ramping up mining and processing activities will position the company as a key player in Europe’s lithium sector despite ongoing challenges.
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