Ex-prime minister Antonio Costa’s Socialist Party hold a majority in parliament. (Photo by Horacio Villalobos#Corbis/Corbis via Getty Images)

Portuguese Prime Minister Antonio Costa has resigned amid investigations into possible crimes of corruption in government relating to lithium and hydrogen projects. Prosecutors have detained his chief of staff as part of the investigation.

Costa announced his resignation on television, stating: “Today I was surprised by the information, officially confirmed by the public prosecutor’s office, that a criminal process has already been or will be initiated against me. Obviously, I am fully available to collaborate with the justice system in whatever is necessary to uncover the truth. However, it is my understanding that the dignity of the function of prime minister is not compatible with the suspicion of any criminal act, which is why I obviously presented my resignation.”

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The outgoing prime minister added that he has a “clear conscience” and will not run for the fourth time in the early elections that the Portuguese president will likely call.

President Marcelo Rebelo de Sousa must now decide whether to allow Costa’s Socialists to form a new government with their majority in parliament or to dissolve parliament and call an election.

Prosecutors are currently investigating alleged graft and influence peddling in the Barroso and Montalegre lithium mine concessions in northern Portugal and a project for a hydrogen plant in Sines port. On Tuesday, five people were detained as part of the investigation.

The prosecutor’s office said: “At stake may be… facts capable of constituting crimes of malfeasance, active and passive corruption of politicians and influence peddling.”

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Portugal has more than 60,000 metric tonnes of known lithium reserves and is seen as an important player in Europe’s plans to bolster domestic lithium production, reducing reliance on imports. Currently, Europe imports 87% of its lithium from Australia.

Nonetheless, lithium projects have faced staunch opposition from locals. Portuguese anti-mining groups said that Tuesday’s developments were proof that mining concessions had not been granted in a transparent manner.

Following Costa’s resignation, Portuguese stocks fell by around 3%.