Portuguese prosecutors search government buildings in lithium investigation

LISBON, Nov 7 (Reuters) - Portuguese prosecutors investigating alleged illegalities in lithium and "green" hydrogen deals searched on Tuesday several government buildings, officials said, while local media reported that two people close to the prime minister were detained.

Publico newspaper said at least five people were detained, including the chief of staff of Prime Minister Antonio Costa, Vitor Escaria, and business consultant Diogo Lacerda Machado, who is a friend of Costa.

Costa's office confirmed searches at Escaria's premises, but declined further comment. Machado is yet to publicly comment and Reuters could not immediately reach him for comment.

Portuguese police PSP told Reuters its officers were on the ground helping with the searches.

Public prosecutors confirmed in January this year an investigation into lithium and hydrogen projects but no suspects were named at the time.

According to local media, investigators raided several government buildings on Tuesday, including the premier's official residence, the Environment Ministry and the home of Infrastructure Minister Joao Galamba.

Galamba's office did not immediately reply to a request for comment.

The Environment Ministry confirmed the searches to Reuters and said Tuesday's agenda of minister Duarte Cordeiro was cancelled.

The mayor of the town of Sines, Nuno Mascarenhas, was detained, according to Publico, as well as two entrepreneurs. There are investment plans to build hydrogen plants in Sines.

Mascarenhas' office did not immediately respond to Reuters' requests for comment.

Broadcaster SIC Noticias said Costa met with President Marcelo Rebelo de Sousa on Tuesday morning to provide explanations.

Costa and the president's offices did not comment on the meeting.

Earlier this year, the president told the government to clean up its act after a separate scandal around state-owned airline TAP.

In May, opposition parties called on the president to use his power to dissolve parliament when Costa decided to keep Galamba as infrastructure minister, snubbing Rebelo de Sousa who had made clear he wanted Galamba out.

With 60,000 metric tonnes of known reserves, Portugal is already Europe's biggest producer of lithium, although miners are only now preparing to produce higher-grade lithium that is used in electric cars and to power electronic appliances.

Several companies, both national and international, are trying to tap Portuguese deposits. According to local media, the investigation into lithium is related to mining projects in the northern municipality of Montalegre.

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