Galp Abandons Aurora Lithium Refinery Project Amid Lack of New Partner
Portuguese energy company Galp announced on Tuesday that it has dropped its plan to build the Aurora lithium refinery, after failing to find a new partner to replace Northvolt. The Swedish battery manufacturer Northvolt had originally partnered with Galp in a 50-50 joint venture set up in November 2021 to build the lithium processing plant in Setubal, on Portugal's coast. However, Northvolt withdrew from the project in early 2024, leaving Galp without a partner.
The refinery project, initially estimated to cost over 1 billion euros (approximately $1.05 billion), was intended to start commercial operations in early 2026. However, the project faced delays due to its complexity and uncertainties surrounding funding. Low lithium prices, driven by oversupply from China, further reduced the attractiveness of the venture.
Northvolt, which had been seen as Europe's major hope for electric vehicle battery production, filed for U.S. Chapter 11 bankruptcy protection last week. The move followed unsuccessful funding talks with key investors and creditors, including Volkswagen and Goldman Sachs.
Without a new partner to share the financial burden and operational responsibilities, Galp decided to abandon the refinery plans. This development comes as a setback to Europe's ambitions to bolster its own lithium refining capabilities and reduce dependence on external suppliers.
