Portugal's lithium auction could be postponed to early 2022 - ministry

LISBON, May 13 (Reuters) - Portugal’s long-awaited lithium licensing auction could be postponed to early 2022 due to delays in implementing a law granting municipalities more say in mining projects, the environment ministry said.

The mining law, approved last October but only put into force this May, gives municipalities affected by lithium mining the right to veto projects and to a proportion of royalties.

Following its implementation an environmental impact study in eight lithium-rich areas in northern and central Portugal, which is expected to take six months, can only now begin, a ministry spokesman said.

“Due to the need to carry out this strategic environmental assessment, the contest will take place at the end of this year or at the beginning of the next,” the spokesman said.

Controversies over the environmental and social impact of lithium mining have led to multiple delays to the auction, initially planned for 2018 and most recently expected to take place by the end of the year.

Portugal is Europe’s biggest lithium producer, but its miners sell almost exclusively to the ceramics industry, and are only now preparing to produce the higher-grade lithium that is used in electric cars and to power electronic appliances.

The government hopes to make Portugal Europe’s top supplier of the metal for electric car batteries, helping meet an expected surge in global demand for lithium.

Lithium projects in Portugal have faced strong opposition from environmentalists and local communities, who are demanding stronger regulation and more transparency.

Licences to prospect for the metal in some other regions of the country have already been granted.

The government has given preliminary approval to an environmental study by London-based Savannah Resources to mine in the lithium-rich area of Barroso, which the company said would contribute more than 1.2 billion euros ($1.44 billion) to Portugal’s gross domestic product.

Portuguese mining company Lusorecursos, which is also prospecting to mine lithium in the same region, has until August to deliver its final environmental impact study after the environment minister said two weeks ago that a first draft showed “a lack of professionalism”. (Reporting by Sergio Goncalves; Editing by Victoria Waldersee and Jan Harvey)