Portuguese Prime Minister Antonio Costa has resigned, just hours after prosecutors detained his chief of staff in a probe into alleged corruption in his administration's handling of lithium mining and hydrogen projects.

The investigation covers lithium mining concessions in the north of the country, as well as a hydrogen production project and data center to be built by the company Start Campus in Sines, a town about 100 kilometers (62 miles) south of Lisbon. 

Citing flight risk and the possibility that illegal activity could continue, arrest warrants were also issued for the mayor of Sines and two executives at Start Campus. 

READ MORE

Italian wine brands look to diversify sales in Chinese market

Hungary's changing climate fosters exotic fruit growth

London's Jewish and Muslim communities unite

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

He said his conscience was clear, but he would not contest a fourth election as premier.

"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," Costa said.

After accepting Costa's resignation, the president called a meeting for parties represented in parliament with the aim of organizing an early election, according to a statement from the Portuguese presidency. 

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

'Fully available to cooperate'

It is the latest scandal faced by Costa's administration since a controversy around state-owned airline TAP in January, which led opposition parties to demand his government's resignation.

Portuguese stocks fell three percent after his statement.

The prosecutor's office said in a statement earlier that five people had been detained as part of the investigation, including Vitor Escaria, Costa's chief of staff, and a business consultant.

It said Infrastructure Minister Joao Galamba and the president of the environment agency APA, Nuno Lacasta, were formal suspects and will appear before a judge.

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

The prosecutors said they had become aware that the suspects used Costa's name and authority to "unblock procedures" related to the deals and the Supreme Court would look into Costa's possible role in the deals. 

Over 40 searches were carried out at several government buildings, including Escaria's office and the infrastructure and environment ministries, the prosecutor's office said.

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

"At stake may be...facts capable of constituting crimes of malfeasance, active and passive corruption of politicians and influence peddling," the prosecutor's office said.

Subscribe to Storyboard: A weekly newsletter bringing you the best of CGTN every Friday