Energy company Galp and gigafactory developer Northvolt have set up a joint company to develop an integrated lithium-battery material value-chain in Europe.
The new joint venture (JV) named Aurora aims to establish Europe´s largest integrated lithium conversion plant, with an initial annual production capacity of up to 35,000 tons of battery-grade lithium hydroxide.
The plant will be able to deliver lithium hydroxide sufficient for 50GWh of battery production per year (sufficient for approximately 700,000 electric vehicles).
As part of the agreement, Northvolt will secure an offtake for up to 50% of the plant’s capacity for use in its battery manufacturing.
Additionally, the JV plans to use “green energy” to power the conversion process, and eventually avoiding reliance on natural gas.
The companies are conducting technical and economic studies and looking at several possible site locations.
A final investment decision is yet to occur, but the JV is envisaging a start of operations by year’s end 2025 and start of commercial operations the following year.
Based on similar projects, the plant could represent an investment estimated at around €700 million ($789 million).
Portugal-headquartered Galp and Sweden’s Northvolt also plan to establish “key partnerships along the value chain”, namely securing the supply of high-quality spodumene concentrate.
Paolo Cerruti, co-founder and COO of Northvolt, said: “The development of a European battery manufacturing industry provides tremendous economic and societal opportunity for the region. Extending the new European value chain upstream to include raw materials is of critical importance.
“This joint venture represents a major investment into this area, and will position Europe with not only a path to domestic supply of key materials required in the manufacturing of batteries, but the opportunity to set a new standard for sustainability in raw materials sourcing. This initiative comes to complement a global sourcing strategy based on high sustainability standards, diversified sources and reduced exposure to geopolitical risks”.
Northvolt’s European battery ambitions
In March, Northvolt laid out plans to build a new 50,000m2 factory in Gdańsk, Poland— with commisioning due next year.
Northvolt raised a further $2.75 billion in private placement to drive its lithium-ion production capacity and R&D efforts In June, bringing its combined financing to more than $6.5 billion in equity and debt as it plans at least 150GWh of deployed annual production capacity in Europe by 2030.
Last month, Northvolt announced the production of its first lithium-ion cell featuring a nickel-manganese-cobalt (NMC) cathode made entirely with metals recovered from battery waste.
Recycled nickel, manganese and cobalt metals used in the battery cell were recovered through a low-energy hydrometallurgical treatment that involves the use of an aqueous solution to isolate the metals and separate them from impurities.
Northvolt claim the process can recover up to 95% of the metals in a battery to a level of purity and performance on par with virgin material.