MILAN - Italian energy group Eni said on Monday it signed a deal to buy a 25% stake in Black Giant, a subsidiary of US startup EnergyX, which is developing a lithium project in Chile.

Lithium is considered a critical material for the green transition since its derivatives are key to building not only electric vehicle components but also battery storage systems, which are needed to integrate renewable sources into the energy mix and to manage the power needs of data centres.

With a phased investment of $225-million, Eni will get exposure to EnergyX's innovative proprietary technologies for lithium production and secure the possibility to get up to one-fourth of Black Giant's future output, it said, confirming a report published earlier on Monday by the Wall Street Journal.

Eni already owns a minority stake in EnergyX through its corporate venture capital company Eni Next.

Black Giant's project targets production of 52 500 tons a year of lithium carbonate equivalent at full capacity in 2030 and will be executed in two phases.

"This transaction is in line with Eni's strategy to diversify its supply chains, strengthening its entry into the critical minerals value chain," the Italian state-controlled group said in a statement.

The move will also support Eni's initiative to produce stationary lithium batteries in Italy, which is part of the group's plan to reduce exposure to the petrochemical sector and gain exposure to the green transition.

Eni Storage Systems, jointly owned by Eni and a unit of Seri Industrial, on Monday launched construction work in the Italian city of Brindisi for the development of a hub for the production of lithium-iron-phosphate batteries.

The production will primarily be used for battery energy storage systems (BESS) that support the deployment of renewables and enhance power grid stability.

European demand for BESS is expected to grow from 36 GWh in 2025 to around 138 GWh by 2030, according to energy consultancy Wood Mackenzie.