Portuguese PM António Costa resigns over lithium deal probe

Portuguese Prime Minister António Costa resigned after investigators searched his official residence in an inquiry into alleged corruption.

He said he had not been named as a suspect but believed the inquiry was incompatible with staying in office.

Prosecutors said on Tuesday they were investigating concessions awarded for lithium mines and hydrogen production.

They said detention warrants were issued for five people including Mr Costa's chief of staff, Vítor Escária.

Público newspaper reported that Mr Escária had been detained.

Infrastructure Minister João Galamba has meanwhile been indicted as part of the inquiry into energy deals.

"The dignity of the functions of prime minister is not compatible with any suspicion about his integrity, his good conduct and even less with the suspicion of the practice of any criminal act," the prime minister said in a televised address on Tuesday.

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

"There is no illicit act that weighs on my conscience, or even any censurable act," he added.

President Marcelo Rebelo de Sousa said he had accepted the prime minister's resignation and summoned political parties for consultations on Wednesday.

The political crisis unfolded after prosecutors published a statement detailing searches in more than 40 different premises as part of the inquiry.

Prosecutors are investigating alleged corruption and influence peddling in lithium mining concessions in northern Portugal, as well as a hydrogen production project and the planned construction of a data centre in the deep-water port of Sines, south of Lisbon.

About 140 detectives searched 17 residential properties and 25 other premises, including the office of the prime minister's chief of staff and two government ministries.

They also searched municipal offices in Sines.

Portugal's main PSI 20 share index was down almost 3% as the political crisis unfolded.

The European Union is keen to reduce its dependence on mines in China, Africa and South America for lithium and other raw materials needed for the green energy transition.

Portugal's lithium reserves are considered central to Europe's increasing demand for electric cars, but exploration projects have faced opposition by some locals.