Northvolt joint venture to develop lithium plant in Portugal

19 December 2021

Battery-maker Northvolt and energy company Galp are setting up a 50/50 joint venture (JV) called Aurora. The new business will establish Europe’s largest and most sustainably-integrated lithium conversion plant in Portugal.

Commercial operations are slated to begin in 2026, with the plant achieving a capacity of up to 35,000 tonnes of lithium hydroxide annually. This material is critical for the battery manufacturing industry, one which Northvolt expects to grow more than tenfold by the end of the decade.

Location to be confirmed

One of the remaining questions about the plant is its location. Technical and economic studies are currently underway to consider potential sites. Based on similar projects the plans could represent an investment of some €700 million.

With this funding, Northvolt claims the site could deliver lithium hydroxide for some 50GWh worth of battery production a year. This equates to approximately 700,000 electrically-chargeable vehicles (EVs). As part of the JV, the battery builder will secure up to half of the plant’s capacity for use in its own manufacturing. The site would also have the potential to create 1,500 jobs.

‘This is a once-in-a-generation opportunity to reposition Europe as a leader in an industry that will be vital to bringing down global CO2 emissions, in line with European and Portuguese climate-change priorities,’ said Galp CEO, Andy Brown. ‘To be successful in this drive, we must all work together, industry and decision-makers, with a sense of urgency, because if we do not claim this role today, others will.’

New sustainability standards

Both Northvolt and Galp want to ensure the Portugal plant is committed to high sustainability standards. The companies point, in particular, to the extraction and concentration of spodumene, and the processing of lithium hydroxide.

‘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,’ said Paolo Cerruti, Northvolt co-founder and COO.

The partners are confident Iberia contains resources that can be recovered without producing a large amount of greenhouse gasses. This will be achieved utilising high standards to protect environmental and human rights, ensuring long-term sustainability.

‘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,’ Cerruti added.

Northvolt continues to make waves in the automotive battery industry. It recently confirmed it will open a new joint research and development (R&D) centre with Volvo Cars. In November, it announced the production of its first fully-recycled battery cell. The unit was made from 100% recycled nickel, manganese and cobalt. In October, it revealed a €662 million plan to build the world’s first R&D campus, which could cover the entire battery ecosystem.