The consortium will develop next-generation batteries for electric vehicles (EVs).
The initial budget will be €5bn to €6bn to come from European companies and state subsidies.
Europe’s share of global battery cell manufacturing is just 3% currently.
Savannah Resources has significant lithium resource at Mina de Barroso in Portugal.
David Archer, Savannah’s chief executive, said: "The Franco-German decision to establish this initiative, as well as the EU's plans to launch a European raw materials investment facility, highlights the seriousness of the EU to strongly commit to increasing its investment in the European lithium battery industry.
"Mina do Barroso’s relevance and location mean that it has the potential to be an extremely important strategic asset, playing a leading role in ensuring that Europe meets a significant portion of its demand for lithium internally.”