Prospects for lithium mining in Portugal in the context of European Union’s climate policy

The European Union’s ambition to achieve climate neutrality by 2050 has driven up the demand for critical raw materials, with lithium used in production of lithium-ion batteries for electric vehicles and energy storage systems occupying a key position. While the other countries have significantly ramped up their lithium production, Portugal, the EU’s sole producer, maintains a consistently low output. Objective challenges to increasing the production are linked to insufficient geological exploration of the lithium deposits. Despite the Portugal government's efforts to create an industrial lithium cluster encompassing the entire value chain, their effectiveness remains limited due to delays in tendering for exploration, as well as in the approval of operation permits. One of the main reasons for the delays is a strong local opposition over concerns that open-pit mining could negatively impact the environment, quality of life and tourism as an essential contributor to the country’s GDP. The issue of social protests, related to the revival of mining activities aimed at reducing the EU’s dependence on imports of the raw materials critical for its climate policy goals in densely populated areas, also hinders project implementation in other EU countries. In order to speed up such projects, the European Commission has introduced a regulation that sets shorter deadlines for the approval of strategic projects, including lithium mining in Portugal. Despite the EU’s push for fast-tracking lithium mining, a moderately conservative approach may better align with Portugal’s interests amid uncertainty about the global lithium demand trends, considering the innovation-driven progress of alternative battery technologies. This approach allows for better preservation of the country’s high environmental quality and its appeal as a tourist destination, as well as alleviation of the social tensions.