LISBON - Portugal's environment agency APA has given its final approval for local company Lusorecursos to extract battery-grade lithium in what would be the country's first such mine, expected to start producing by end-2027, APA said on Thursday.

That puts the project in the northern Montalegre area near the Spanish border and with a planned investment of 650-million euros ($696-million), ahead in the lithium mining race in Portugal. London-based Savannah Resources has so far received a conditional go-ahead for its own Barroso openpit mine.

With more than 60 000 t of known lithium reserves, Portugal has been seen central to Europe's efforts to secure more of the battery value chain and cut reliance on imports.

However concerns about the environmental and social impact of lithium mining from nature preservation groups and local communities have led to multiple delays in approving lithium mining projects as well as a mega-auction of new concessions that the government initially planned for 2018.

Lusorecursos was awarded a mining concession in March 2019 but the start of the project was dependent on the final approval of the environmental impact assessment.

In a statement, APA said that it authorised mining in Montalegre, "with the issuance of a favourable environmental impact assessment", despite the public consultation being "mostly negative regarding the implementation of the project".

"Similar to what has already occurred in other projects, the assessment developed (by APA) took into account the strategic interest of lithium," it said, adding that the municipality of Montalegre will receive 75% of the royalties.

A Lusorecursos spokesman said the project, which was approved "without any relevant conditions", would also include an ore refinery in the vicinity of the mine that will require a separate EIA for its exact location.

Total investment in the mine and refinery is expected to reach around 650-million euros. Lusorecursos plans to start construction in the beginning of 2025 and start producing lithium hydroxide in late 2027.

Most of the Lusorecursos project is underground, but it also involves openpit mining.