Aim-listed Savannah Resources has welcomed France and Germany’s establishment of a European cross-border battery cell consortium.
The consortium aims to develop next-generation batteries for electric vehicles.
The countries will contribute an initial investment of between €5-billion and €6-billion, or between $5.6-billion and $6.7-billion in the initiative.
Some €4-billion of the investment will come from European private companies, with France and Germany having earmarked €1.7-billion (or $1.9-billion) of this investment to support European private company alliances – mostly comprising automakers and energy firms.
This is in addition to €1.2-billion in planned State subsidies, to be approved by Brussels, aimed at supporting the creation of a viable battery manufacturing sector and thereby reducing European carmakers' dependence on Asian suppliers of lithium ion batteries.
Currently, the European share of global battery cell manufacturing is 3%, while Asia has an 85% share, according to a report published by the European Commission in April.
French Economy and Finance Minister Bruno Le Maire said that the two governments were responding to requests from European carmakers for help in reducing their dependence on imported lithium-ion batteries and that the goal was to establish two production plants over the next four years, one in France and one in Germany, with around 1 500 employees in each.
A statement released by Savannah on Tuesday explained that one of the first projects for the Franco-German consortium will be a pilot factory, with around 200 employees, in France, which will open in the coming months. With this initiative, Savannah expects to gain further traction from potential partners who understand the compelling supply dynamic that is developing in Europe.
“The European cross-border battery cell consortium and potential European Union investment in lithium projects highlights the growing wider recognition of the strategic importance of the development and production of lithium batteries for the European market.
“This is favourable for Savannah as it continues to advance its flagship Mina do Barroso lithium project in Portugal – Western Europe's most significant new discovery of spodumene lithium,” said Savannah CEO David Archer.