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Germany’s export credit agency Euler Hermes has signed a non-binding letter of interest for a project finance loan guarantee of up to $270 million for Savannah Resources to develop the Barroso lithium project in northern Portugal.
“It’s a significant step for us and comes after the Critical Raw Materials Act was passed,” Emanuel Proença, Savannah’s CEO, said in an interview. “It’s a clear awareness by Europe that it needs to step up its game especially versus China for the transformation of an industry that is absolutely critical.”
News of the loan guarantee on Dec. 3 follows an equity investment and offtake agreement Savannah signed in June with Amsterdam-listed AMG Critical Materials Group, a spodumene concentrate producer with a German subsidiary AMG Lithium. Savannah’s Barosso project in northern Portugal, about 145 km from the deep-water port of Leixões near the city of Porto, has a JORC-compliant resource of 28 million tonnes grading 1.05% lithium oxide and consists of five main deposits.
Initial capex of $236 million, excluding contingencies, could be repaid in just under a year and a half. The capex grows to $280 million including a 19% contingency.If there is one thing metals analysts seem to agree on it’s that the lithium market is oversupplied. Nine new lithium mines started production around the globe in 2023, according to figures from S&P Global, and the market is awash in the critical metal, with prices plumbing multi-year lows.
Michael Widmer, Bank of America’s London-based metals strategist, sees 2025 as “the inflection point” for the battery metal.
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