The besieged citizens of Covas do Barroso and other districts in Northern Portugal, where the mining of minerals threatens their traditional way of life, may take some comfort from recent revelations which show that cracks continue to appear in the presumed Lithium Honey-Pot.

In October 2023, the sovereign state of Ghana announced that it had granted exclusively to Atlantic Lithium Limited a fifteen-year lease to exploit its flagship Ewoyaa mine, which has an estimated potential production of thirty-five million metric tonnes (35 mmt) thus making it one of the top global ten of currently explored sites. Major shareholdings in Atlantic (registered in Australia) belong to Cleantech Group and Piedmont Lithium, both being corporations of the USA. It is to a refinery operated by the latter that more than one half of the Emoyaa output is destined to be sent, subject, as of the Trump era, to tariffs yet to be agreed.

It was intended to start mining before the end of the year 2024 but in a carefully worded press release, Atlantic has announced that its project has been “put on hold” pending a renegotiation with the Ghanese government for the fiscal terms of the lease. In the words of its general manager, “the internal rate of return has plummeted from 105% to 14% and nobody will invest in that”.

Atlantic had already invested US$ 70 million but the forward market values have plunged since the peak of November 2022. Since then, major discoveries of immense lithium reserves in both China and the USA have combined with a growing realization that the forecast adoption of electric vehicles is likely to be much slower than anticipated.

This probable over-supply of lithium for the next decade has been emphasized by news coming from China that research into the alternative use of sodium for powering batteries is leaping forward and prototypes are already beyond field testing with the manufacture and marketing of short-range commercial and industrial vehicles in full swing.

Atlantic Lithium may well be compared in several ways to the composition and aims of Savannah Resources, which company has anticipated a production of 25 mmt at its flagship site of Covas do Barroso and also has fiscal concessions from the Portuguese sovereign state.

Although the proximity of Barroso´s “white gold” to refineries and markets of the EU may alleviate a distressful fall in demand similar to that of Atlantic, it is thought that the exploitation of one of Portugal´s prime mining assets may proceed in a limited fashion at much lower return values thus reflecting much greater consideration for the environment of the local citizens.

by Roberto Cavaleiro - Tomar 28 April 2025