Portugal PM resigns amid lithium, hydrogen scandal probe

LISBON, Nov 7 (Reuters) – Portugal’s Prime Minister Antonio Costa resigned on Tuesday, hours after prosecutors arrested his chief in an investigation into alleged corruption in the handling of lithium mining and hydrogen projects.

Costa, who prosecutors said was the target of a separate investigation, announced the decision in a televised statement after meeting with President Marcelo Rebelo de Sousa.

He said his conscience was clear, but he would not stand for a fourth term as prime minister.

“The dignity of the prime minister’s activities, his integrity, his good conduct and the practice of any criminal act are beyond doubt,” Costa said.

The president must now decide whether to allow Costa’s Socialists, who have a majority in parliament, to form a new government or to dissolve parliament and hold elections.

Parliament was scheduled to vote on the 2024 budget bill later this month.

Costa will remain in office until the end of the presidency. Rebelo de Souza called political parties to a meeting on Wednesday and his advisory body, the Council of State, on Thursday.

It is the latest scandal to confront Costa’s administration, which sparked a controversy in January over state-owned airline DAP that prompted opposition calls for his government to resign.

Portuguese shares fell 3% after his statement.

Five people, including Costa’s chief executive Vitor Escaria and a business consultant, have been detained as part of the investigation, the prosecutor’s office said in a statement on Tuesday.

It said Infrastructure Minister Joao Calamba and the head of environmental organization APA, Nuno Lacasta, are formal suspects and will appear before a judge.

Galamba’s office and APA did not immediately respond to a request for comment.

Prosecutors said they knew the suspects had used Costa’s name and power to “obstruct processes” related to the deals, and that the Supreme Court would examine Costa’s possible role in the deals.

More than 40 raids were conducted on Tuesday at several government buildings, including Escaria’s office and the infrastructure and environment ministries, the prosecutor’s office said.

Costa said he was fully prepared to cooperate with the justice system.

Prosecutors are investigating allegations of corruption and influence peddling in lithium exploration concessions in northern Portugal, a plan for a hydrogen plant in the port of Sines and a mega data center investment there.

“At risk may be … facts capable of constituting crimes such as malpractice, active and passive corruption and influence peddling of politicians,” the prosecutor’s office said.

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