Portugal recently announced that it intends to spark a Lithium exploration rush in the country before the close of 2018 and intends to become Europe’s largest miner and fabricator of this now lucrative metal.

Jorge Seguro Sanches, State Secretary of Energy, told Reuters this week that he expects the ever-increasing demand made by EV’s to spur mining, increase raw material prices and turn Lithium into a high demand metal.

Sanches plan is to provide as many exploration licenses as possible to flood the country with prospectors that will find avenues to produce the metal at a commercial level.

Together with the license, the Portuguese government would integrate investment incentives in local refining and battery manufacturing. According to Shanches “We intend to launch the tender by the end of the year. There will be various different areas on offer.”

This new rush does not come at too much of a surprise since Portugal is already Europe’s biggest supplier and the world’s sixth-largest producer of lithium. The main difference between current production and what Sanches is aiming for is the market. Current lithium production is aimed at the ceramic industry. Now they are restructuring a gearing up for the energy market.

Another reason why this sudden interest is not a surprise comes from Elon Musks recent deals with China’s Ganfeng, the worlds largest Lithium mining company, which will supply one-fifth of Musks lithium from 2019, totaling around 28,000 tons a year. As such, Portugal is starting to put up a fight against the Chinese dragon.

Sanches states on this issue that “Portugal is one of the countries with the largest potential. We’ve had contacts (with companies) on all levels … we are very optimistic that there will be a lot of competitors.”

So far Sanches claims that they have received over 40 license requests from countries including Australia, Canada, and the United States.

To match the production increase, Sanches has been negotiating with the European auto industry to assure a base demand from Portugal’s mining ventures, and this includes VW’s plant that is located in Portugal.

This new run comes in the face of forecasts that the demand for lithium will double within the next 6 years. The European car battery market alone is forecasted to be worth 250 billion euros ($290 billion) by 2025.

The tender criteria will be fair, and the KPI will be based on the bidding companies readiness and ability to set up local electrochemical refining and battery plants.

Two companies involved in Portugals lithium industry are Savannah Resources and Portuguese miner Lusorecursos. They have already initiated changes to their output, aiming to build up an EV lithium battery operation.

The key to success will be in the fragile balance of prices maintained between supply and demand. Where the raw lithium ore from Spodumene and brine should not outstrip the demand leading to large reserves. Having stated this, the demand for lithium will continue to grow exponentially as the EV and AV markets develop technologically sound and economically attractive applications.

Savannah CEO David Archer stated that “We’re very pleased with the level of support we are receiving broadly for lithium. It really has the potential to create a new industry in Portugal.”

While, Ricardo Pinheiro, CEO of Lusorecursos stated that he would raise 400 million euros from foreign partners to build an on-site chemical plant to refine around 30 million tons of petalite lithium ore.