Europe's largest lithium project could be operational mid-2022

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European Metals Holdings (EMH) has said that operations at its lithium project in Cinovec, Czech Republic, could begin by mid-2022 and that preliminary discussions are already underway.

Czech utility company CEZ, in which the state owns 70%, has already conditionally agreed to provide a €2-million loan to EMH, which opens the door to making it one of the company's largest shareholders.

EMH controls the exploration licences to the lithium and tin project in Cinovec, described as the largest lithium deposit in Europe.

The project could enable CEZ to make the transition to renewable energy and supply the European electric vehicle industry.

"It's very big, it's low-cost, it's surrounded by car makers and battery makers and it's in the EU, where there is a very strong political push to develop the battery industry," said Keith Coughlan, MD at European Metals Holdings.

The company has enjoyed a 50% surge in share prices in 2019.

Coughlan also said that EMH offers tin, though at the current market prices, it's more a useful byproduct and not especially economic.

While the loan from CEZ is only a small portion of the €429-million total capital expenditure, Coughlan said that the commitment inspired confidence while due diligence was carried out on the project.

EMH is undertaking a feasibility study and says that it expects construction to begin in mid-2020 and it is expected to last around two years.

The CEZ loan would make it easier to talk to other financiers, Coughlan said, adding he had held preliminary discussions with buyers, including car makers and battery producers. All are European, although some are units of companies with headquarters beyond Europe, he said.

The European Union, keen to shorten its supply chains, is focusing on strategic minerals and developing supplies for its electric vehicle industry.

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