Deals targeted in corruption probe that led Portugal PM to step down

By Sergio Goncalves

LISBON (Reuters) – Portugal’s Prime Minister Antonio Costa stepped down on Tuesday after the prosecutor’s office announced it was investigating alleged corruption in multi-billion dollar lithium, “green” hydrogen and data center deals.

Prosecutors said in a statement that five people had been detained as part of the investigation, including Vitor Escaria, Costa’s chief of staff, and a business consultant.

The prosecutors’ investigation is targeting two lithium exploration concessions in northern Portugal, and a green hydrogen plant and large-scale data center in Sines.

Here are the projects, and the national and foreign companies, targeted by investigations:

LITHIUM:

– With 60,000 metric tonnes of known reserves, Portugal is already Europe’s biggest producer of lithium, although miners are only now preparing to produce the higher-grade lithium that is used in electric cars and to power electronic appliances.

– The investigation targets two mining concessions awarded to Portuguese company Lusorecursos to dig for lithium, and another given to London-based mining company Savannah Resources.

– Lusorecursos said in 2019 that it planned to invest around 400 million euros ($427 million) in the projects, including 300 million euros to build an on-site refinery.

– Savannah Resources wants to build four open-pit mines in Barroso, producing enough lithium each year for around half a million EV batteries.

– Savannah Resources said in a statement it was cooperating with the authorities who visited some of its locations, but that neither the company nor any of its staff were the targets of the investigation. Work at the Barroso Lithium Project continued unencumbered.

– Both concessions in northern Portugal have faced strong opposition from local communities and environmental activists.

‘GREEN’ HYDROGEN:

– Another deal being scrutinised is the creation of a 100 megawatt (MW) hydrogen production hub in Sines, a seaside municipality south of Lisbon, by the H2Sines consortium, which was launched in 2020 and whose partners initially included EDP, Galp, Engie, Vestas, Bondalti and Martifer.

– In 2021, EDP and Galp announced they would leave the H2Sines consortium and then formed a new consortium called GreenH2Atlantic.

– H2Sines aims to produce green hydrogen and transport it by sea to Rotterdam in the Netherlands, and it applied for Important Projects of Common European Interest status. Their goal is to build an electrolyzer to produce green hydrogen with 100 MW power.

LARGE-SCALE DATA CENTER:

– Under investigation is also a large-scale data center in Sines created to tap demand from global tech firms.

– The project was launched by U.S. investment fund Davidson Kempner and British investment firm Pioneer Point Partners, which expected to invest up to 3.5 billion euros by 2025.

– The two companies said the campus in Sines would include five buildings with the capacity to supply up to 450 megawatts of cheap energy from renewable sources to servers.

($1 = 0.9367 euros) (This story has been corrected to clarify that the ‘green’ hydrogen consortium is H2Sines and not GreenH2Atlantic; adds paragraph to clarify that EDP and Galp left H2Sines consortium in 2021 and created a new one)