Portugal's Prime Minister Antonio Costa leaves after addressing the nation to announce he has submitted his resignation letter to the President of the Republic, at Sao Bento Palace in Lisbon, Portugal, 07 November 2023. EPA-EFE/JOSE SENA GOULAO


Portuguese PM António Costa resigns amid corruption allegations


Portugal’s Prime Minister António Costa resigned Tuesday amid a police probe into suspected nepotism and corruption.

Police arrested the PM’s chief of staff Vítor Escária, along with Lacerda Machado, a businessman close to Costa, and at least three others.

A team of 140 detectives continued to search the Socialist Party PM’s official residence, along with the infrastructure and environment ministries.

These raids formed part of a four-year investigation by Portuguese prosecutors into alleged wrongdoing in the hydrogen and lithium industries.

Costa may have been involved in granting operating rights and contracts for green hydrogen and lithium mining projects. Portugal has Europe’s largest supply of lithium. A critical raw material, it is used in a range of technologies, including electric car batteries.

Costa said he was caught by surprise by the corruption investigation but promised to collaborate.

“As always, I have full confidence in justice and its functioning,” he said on Tuesday.

“However, I understand that the dignity of the office of prime minister is not compatible with any suspicion regarding integrity, good conduct and, even less, with the suspicion of any criminal act,” Costa added.

Prosecutors are investigating how lithium concessions were awarded by the government in the Romano (Montalegre) and Barroso (Boticas) mines. They are also exploring a hydrogen-based power plant project in Sines, and a data centre in the Sines industrial zone.

The attorney general’s office said it was also investigating João Galamba, the minister for infrastructure, and Nuno Lacasta, chairman of the board of the Portuguese Environment.

The two were being investigated for alleged influence peddling, malfeasance, and active and passive corruption by a political office holder, said the public prosecutor’s office.

The European Union calls lithium a pivotal element in Europe’s transition towards digital, energy-efficient, and climate-neutral economies. The mineral is key to achieving Paris Agreement goals.

The European Commission has distributed billions of euros of subsidies to the lithium industry in Europe.