European Metals Holdings has confirmed that its joint venture Cinovec lithium-tin project in the Czech Republic will produce low carbon lithium
The project’s global warming potential was modelled by consultancy Minviro using an ISO-compliant life cycle assessment to quantify emissions from the lithium chemical production and to provide clear resolutions of emission drivers.
It also identified that solar power electric mining fleet, Hypex Bio explosives and green hydrogen for thermal energy could be used to reduce emissions and allow the project’s lithium chemicals to have one of the lowest CO2 intensity globally if all were used.
European Metals’ JV partner and power producer CEZ plans to provide 100% renewable energy to power the underground mine, its front-end comminution and its beneficiation and lithium chemical plants.
CEZ owns renewables energy installations with a combined power generation capacity of 1,720 MW, which will increase by 1,500 MW by 2025.
The project’s acidification potential, water use and land use were also assessed through the LCA, with it finding that the acidification potential was comparable to Chilean brine, but only 13% of the equivalent for Australian spodumene processed in China.
It also found that Cinovec’s water use was projected to be lower than all benchmarks and below 5% of Chilean brine water use even when water evaporated from the brine was not included in the water use calculation.
European Metals executive chairman Keith Coughlan said the assessment had found that Cinovec had the potential to have the lowest overall environmental impacts compared to other conventional lithium battery metals projects, not only in Europe, but also on a global basis.
“With the use of solar power and other optimizations, the Cinovec project will set a standard by which all other conventional lithium producers could be judged. We expect the environmental credentials of the Cinovec project will help make its product valuable to end-users, particularly in light of the new EU requirements in relation to greenhouse emissions,” Coughlan said.
He added that, not only did the optimized model demonstrate low CO2 emissions, but the project also delivered good results with regards to acidification and water consumption.
EMH is currently carrying out a mine backfill study and a revised prefeasibility study updating the economics and value of Cinovec, with an update on these expected shortly.
The Cinovec project is expected to come into production by 2024, producing 25,000 mt/year of battery grade lithium hydroxide, or slightly less carbonate if this was required by future offtake partners.
Czech Republic rich with gold deposits
“A large part of the city of Prague was built from the proceeds of gold mining, including some of the buildings of Charles University that still stand today,” says Sarka Jurinova, director of the Regional Museum in Jilove u Prahy, which houses a large exhibition on gold mining.
“We’re probably the only museum where your admission ticket entitles you to take home gold you’ve panned yourself,” she quips, pointing to a pool of water in the courtyard. Visitors can prospect in the sand at the bottom, and whatever tiny pieces of gold they find belong to them.
“There are about 7 tons of gold under and around Jilove,” the museum’s geologist, Jan Vana, tells DW. Although mining ended in 1968, Vana says there were times when some of the shafts would yield as much as 4 grams of gold, or about 1/8 ounce, per metric ton of rock. This would make gold mining a profitable operation, despite the drastic drop in gold prices in 2013.
“The problem is that Jilove is in a recreational area,” Vana explains. “Without the use of toxic cyanide, the yield would be low.”
Nonetheless, many locals would like to return to the days when gold was mined in Jilove. “Then we could buy Czech gold instead of importing it from South Africa,” one elderly local woman says.
Nuggets the size of handballs
The mining tradition was kept alive in Jilove decades after the mines themselves had closed. “In 2018, when we celebrated the 50th anniversary of the end of mining, the last few former miners came and gathered here,” says Sarka Jurinova, standing in front of a mining car, one of the exhibits in the museum. An inscription informs us that there is sufficient gold in the lumps of rock in the wagon to produce a wedding ring. In the past, however, gold nuggets weighing several kilograms were found beneath Jilove. One specimen, the size of a handball, is on display in the Jilove Regional Museum. The museum offers tours of several of the former shafts — although no one in Jilove is seeking to revive the mining industry today. “People do still try and prospect gold in the sand along the tributaries of the River Sazava,” Jurinova points out.
Czech Republic’s gold resources
There are recoverable gold deposits in several places of the Czech Republic. A conservative estimate suggests that it would be possible to mine around 400 metric tons of gold there. At current prices, that would yield about 500 billion Czech crowns — the equivalent of €20 billion, or almost $24 million. Since 1990, there have been several attempts to resume gold mining, but all have failed due to lack of interest from the state along with resistance from residents in affected localities.
Last year, the state mining company Diamo launched a survey of closed gold mines in Zlate Hory in the north of the Czech Republic. “The geological survey will last three years, and the results will be used to determine the conditions under which the gold deposit near Zlate Hory can be exploited,” Ludvik Kaspar, the director of Diamo, told the Czech news agency CTK.
Mining yes, cyanide no
“The study should provide the government with up-to-date information on the possibility of exploiting gold reserves and their concomitants,” Stepanka Filipova, a spokeswoman for the Ministry of Industry and Trade, told the high-circulation daily MF Dnes. Here, too, several tons of gold are said to lie buried underground.
“I will make the case for the project to resume mining to go ahead,” Czech president Milos Zeman told CTK some years ago.
With the Zlate Hory mine, the assumption is that, if mining is resumed, the gold-bearing rock would be sent abroad for further processing, meaning that no extraction of gold involving highly toxic cyanide would be done in the Czech Republic.
Mining not yet profitable
In the Czech Republic, gold mining would be profitable with the use of cyanide, but without cyanide its profitability is questionable.
But for Richard Brabec, the current environment minister, renouncing cyanide is an essential requirement for the resumption of gold mining in the Czech Republic.
“For us, it is absolutely inconceivable and unacceptable that gold mining should in future be done by leaching — that is, by chemical processing,” Brabec said on Czech television. “The only other option is deep mining,” he continued, referring to mining involving shafts sunk 1.5 kilometers or nearly a mile below ground.
“But I hope that gold will remain hidden underground as the riches of our country for decades to come,” Brabec concluded.
However, Czech economist Lukas Kovanda, a member of the government’s National Economic Council in Prague, believes the lack of haste in the resumption of gold mining reflects mainly economic factors.
“Gold mining is not yet profitable again, so no one is in a hurry to resume it,” Kovanda told DW. “If things were different, they would have started mining gold again in the Czech Republic long ago.”
Czech Republic: lithium superpower?
The example of lithium, often referred to as “white gold,” is illuminating. In recent years, large lithium deposits were discovered near Cinovec in the Ore Mountains, close to the border with Saxony in Germany. It is estimated to be the largest lithium deposit in Europe, with about 60% on the Czech side of the border and about 40% on the German side.
In March, Karel Havlicek, Czech deputy prime minister and minister of industry and trade, announced that with the help of the partly state-owned energy company CEZ, he had succeeded in gaining control over mining in the majority of the Czech Republic’s deposits.
A CEZ spokesperson, Roman Gazdik, told the online portal of the MF Dnes newspaper that mining could start in 2025, after which it would be possible to mine 1.8 million metric tons of lithium ore per year.
An estimated 4% of the world’s lithium reserves are located in the earth beneath the Czech Republic — 140,000 million metric tons near Cinovec alone. Lithium is a strategic raw material with great potential — among other things, it is needed for the manufacture of batteries.
But lithium mining also presents pollution hazards, so environmental considerations could come into play there as well.
Poland asks CJEU to reject halting of Turów coal mine
In February, the Czech government decided to take Poland to the court in connection with the building out of the Turów opencast mine. The main justifications were the mine’s impact on cross-border regions, reduction of the level of groundwater, and as a result lack of drinking water in the region.
Poland has requested the Court of Justice of the European Union (CJEU) to reject a Czech motion to halt mining at the Turów lignite mine.
The Czech government had applied to the CJEU for the implementation of interim measures to stop the mining of lignite at the colliery, which is on the Polish-Czech border, citing environmental concerns.
Poland’s Ministry of Climate told PAP that Warsaw’s response to the Czech government’s request had been forwarded to the court on April 6. In its response, the Polish government argued that interim measures are disproportionate and do not ensure a proper balance of interests.
“The application (of interim measures – PAP) would expose the Republic of Poland and its citizens to significant and irreversible harm,” the Polish authorities argue. “Halting mining activities at the Turów colliery until the issuance of a verdict terminating the main proceedings would have severe economic, social and environmental effects for the Republic of Poland, including the country’s energy security.”
The climate ministry pointed out that Poland also believes that the Czech Republic’s request does not fulfil the necessary urgency criteria.
Poland argues that the Czech government’s position is unjustified as the Czech government analysis omits other significant factors.
The Turów mine and power station belong to the PGE Mining and Conventional Energy company (PGE GiEK). In 2020, the mine’s lignite mining licence was extended until 2026.
In the opinion of PGE GiEK President, Wioletta Czemiel-Grzybowska, on the EU court’s decision on Turów rests the future success of the ‘just energy transformation’ at the EU level.
“‘Wild’ energy transformation is extremely dangerous and stands in opposition to the planned, stable and just transformation foreseen by the EU within the framework of the Green Deal,” she said.
The Turów mine delivers 7 percent of electricity used in Poland. Closing the mine would also entail closing the Turów power plant that it supplies, threating up to 80,000 Polish citizens.
Euro Manganese raising money for Chvaletice manganese project in Czech Republic
In order to accelerate work at its Chvaletice manganese project, in the Czech Republic, Euro Manganese will raise C$29-million in a private placement. The share offer will be done in two tranches, with the first consisting of more than 41.6-million CDIs to raise an initial C$24.2-million, while the second tranche would consist of more than 8.3-million CDIs, to raise a further C$4.8-million. The second tranche placement will be subject to shareholder approval.
The share placement is being anchored by a strategic investor and an environmental, social and corporate governance-focused fund, and received strong support from several existing institutional shareholders, Euro Manganese said. Proceeds from the share placement will be used to advance the Chvaletice manganese project, allowing for the completion of all site and technical work required for a final investment decision by 2022.
“We are very pleased to see such strong and high quality investor interest in this equity offering. We now have the funds required to install, commission and operate our demonstration plant and to finalise our definitive feasibility study and final environmental impact assessment during the next 12 months,” said Euro Manganese president and CEO Marco Romero.
“The demand for high purity manganese products continues to grow and the latest market developments have further improved our prospects. Volkswagen Auto Group recently announced plans to use a high proportion of manganese in their batteries that will be used in the largest segment of its future electric vehicle production.
“In addition, Euro Manganese has secured support from EU-backed EIT InnoEnergy, which is intended to help us accelerate the Chvaletice manange project and to secure strategic financing and customer offtake agreements. Euro Manganese is clearly in the right place at the right time,” said Romero.
A preliminary economic assessment of the Chvaletice project estimated that it would require a capital investment of some $404-million, to produce some 1.19-million tonnes of manganese over a 25-year project life.
Is Czech EMH ready to supply clean lithium to the EU?
The EU is rapidly switching from petrol transport to EVs, as part of the “European Green Deal” which plans to make Europe carbon neutral by 2050. €750BN has been allocated to generous EV subsidies, alongside penalties for CO2 emissions. This transition in energy consumption and use has become a key driver of the need for a local source of lithium. The EU currently has no local supply and requires imports from China and South America. A significantly sized lithium industry is about to emerge in the EU, with EMH well placed to capture a significant portion of this market share. The EU is aiming for 80% local lithium production by 2025.
European Metals Holdings Limited is currently developing the fully integrated Cinovec lithium, tin, tungsten deposit located in the northern Czech Republic. This is the largest hard rock lithium resource in the European Union. EMH provides a compelling play in the green energy materials sector, particularly given the location of its Cinovec Project, which is not only strategically positioned in terms of its potential client base but also benefits from being situated in a mining-friendly jurisdiction. The location is also prime real estate in the electric vehicle (EV) revolution.
EMH’s Cinovec project is located in the northern Czech Republic, in the epicentre of over a dozen new and planned lithium-ion battery factories, on the doorstep of dozens of potential customers.
Geomet s.r.o. controls the Cinovec project’s mineral rights and is owned by EMH (49%) and CEZ (51%).
CEZ is the seventh-largest European Union power utility by customers and the tenth biggest by market cap (US$13 billion), domiciled in the Czech Republic. The Czech Republic Government is CEZ’s largest shareholder with a 70% stake in the group. CEZ has a balance sheet of €28 billion, and a clear strategic need to ensure EMH’s project moves into production.
EMH intends to supply a minimum of 25,267 tpa of lithium hydroxide or 22,500 tpa of lithium carbonate over the long term.
About the Cinovec Project
The Cinovec deposit is covered by three Exploration Permits and three Preliminary Mining Permits (PMP) that cover a combined area of nearly 19 square kilometres.
EMH’s strategy is to combine the three permits and progress the mine permitting and environmental studies that will support the proposed definitive feasibility study (DFS). Cinovec is by far the largest hard rock lithium project in Europe. The deposit also contains a globally significant tin resource, and this is fully funded through to Final Investment Decision, expected early 2022. The Cinovec deposit is covered by three Exploration Permits and three Preliminary Mining Permits (PMP) that cover a combined area of nearly 19 square kilometres. EMH’s strategy is to combine the three permits and progress the mine permitting and environmental studies that will support the proposed definitive feasibility study (DFS).
Cinovec hosts a hard rock lithium deposit with:
-a total Indicated Mineral Resource of 372.4 million tonnes at 0.45% Li2O and 0.04% Sn and
-an Inferred Mineral Resource of 323.5 million tonnes at 0.39% Li2O and 0.04% Sn.
The deposit contains a combined 7.22 million tonnes of Lithium Carbonate Equivalent and 263kt of tin.
An initial Probable Ore Reserve of 34.5 million tonnes at 0.65% Li2O and 0.09% has been declared to cover the first 20 years of mining at an output of 22,500 tonnes per annum of lithium carbonate.
Could EMH meet supply demands?
Independent industry analyst Roskill is expecting demand for lithium next year to increase significantly with carbonate to reach 165,000 tonnes LCE, up from 139,000 tonnes in 2020, while demand for hydroxide should total 132,000 tonnes LCE.
EMH expects to commence production in 2024 as the supply/demand dynamics for the battery-grade hydroxide market look set to drive prices higher.
The demand side of the equation will be driven by an increase in CO2 compliance in the European Union that will commence in 2025. The European Union is committed to investing 550 billion Euro in climate change initiatives between 2021 and 2027. Of further significance for EMH is the goal of becoming self-sufficient in terms of lithium production, and by 2025 regulatory bodies are aiming for 80% regional production. Further initiatives include the establishment of a 40 billion Euro Just Transition Fund aimed at assisting in the transition from fossil fuels to green energy. High profile end-users such as Tesla, Samsung and Volkswagen are already on the move, and they are at various stages of increasing/adapting capacity to cater for an uptick in demand for electric vehicles and the broader power storage sector – note Cinovec’s central proximity to its potential clients.
European Metals could become a compelling play in the green energy materials sector, particularly given the location of the Cinovec Project and its strategic position in terms of its potential client base.
A focus on ESG
While ESG is focused on delivering a sustainable lithium product to the European market, it is also doing its ESG (environmental, social, governance) credential no harm. EMH has adopted a set of ESG metrics and disclosures as released by the World Economic Forum (WEF) and is reporting their quarterly progress on ESG metrics. The single roast, low heat process outlined in the PFS minimises the use of power, and a combination of recycled water and the use of benign reagents adds up to environmentally friendly production. The application of EMH’s process also provides the company with options to produce battery-grade lithium carbonate or lithium hydroxide, opening up multiple markets and which translates to client diversification.
What to expect
There are several potential share price catalysts that could help the company re-rate in the near to medium-term. This includes the completion of a definitive feasibility study (DFS) which should occur in the next 12 months. With EMH sending samples to potential customers in 2021, there is the likelihood of end-users negotiating offtake agreements, particularly given that analysts are already predicting supply constraints.
Euro Manganese got to next permitting stage for its Czech project
Based on feedback from the Czech Ministry, Euro Manganese can now start the next stages of the permitting process of the Chvaletice manganese project. Euro Manganese says the Czech Ministry of Environment has completed a six-month screening of the company’s preliminary environmental impact assessment for the project. The project is intended to recycle waste from a decommissioned mine in Czech Republic to produce ultrahigh-purity manganese products, particularly for electric vehicle batteries. The company considered the screening procedure important for remaining on the right side of regulation and generating stakeholder input, which will inform the final design and planning phases of the Chvaletice project.
Input on the assessment was received from various government bodies, public agencies and regional and local authorities, as well as community members, since it was open to the public. The stakeholders’ main concerns have been around the management of increased vehicle traffic and noise, impacts to air and water quality, and the preservation of sight lines to a nearby historic site. CEO Marco Romero is confident that the company can address these concerns in forthcoming detailed plans.
“Following more than four years of environmental baseline and impact studies, process design and engineering, we purposely provided much more detailed information to the public and regulators about our project than is normally required at this stage of the permitting process. In the end we were provided with useful feedback.”
Euro Manganese targets publishing a definitive feasibility study on the project by the end of the year, while work on the final environmental impact assessment will start mid-year, also targeting completion by the end of the year. Meanwhile, Romero says procurement and fabrication of the project’s demonstration plant remains on schedule, with delivery to site expected in July. The demonstration plant will provide high purity manganese materials for supply chain qualification by the company’s potential customers.
Euro Manganese’s new plant for its Czech project
For the Chvaletice Manganese Project in the Czech Republic the Changsha Research Institute for Mining and Metallurgy (CRIMM) will build the plant, which is a seven-times scale-up of the pilot plant Euro Manganese EMN operated in 2018.
The system, made up of manually-operated interconnected modules, can be used either as a circuit or as stand-alone components. The plant is designed to fully replicate the entire flowsheet proposed in the project’s 2019 preliminary economic assessment. It will produce around 32 kilograms of high-purity electrolytic manganese metal (HPEMM) each day. The HPEMM can then be converted into around 100 kilograms per day of dry crystalline high-purity manganese sulphate monohydrate (HPMSM), to serve the lithium-ion battery industry as well as producers of specialty steel and aluminium alloys. The order for the plant has been placed, with procurement and fabrication to start immediately. Delivery is expected in mid-2021.
Euro Manganese President and CEO Marco Romero says offtake testing will begin as soon as the plant is up and running.
“Once commissioned, we expect to begin the test phase of the supply chain qualification process for our high-purity manganese products with multiple potential customer,” Marco said.
“We have also continued to make steady progress on the regulatory and permitting front, following our filing of the Environmental Impact Assessment (EIA) notification in late June,” he added.
Around 55 per cent of the plant’s production of HPEMM and HPMSM has already been snapped up by five prospective customers for testing.
Almost all project permitting, including environmental approvals, has been ticked off. The only remaining hurdle is the building permit required for the demonstration plant. The company has also acquired three additional parcels of land to improve rail connectivity and streamline the plant’s layout and operation. Once the testing phase of the HPEMM and HPMSM is complete, Euro Manganese is hoping to lock in long-term commercial offtake arrangements with European chemical, battery and automotive companies. The company has also enlisted the services of U.K.-based investor relations company, The Armchair Trader, to help target the institutional investment community in the U.K., Europe and beyond.
European Metals, drillings at lithium-tin project in Czech Republic
Drilling had commenced at the lithium-tin project Cinovec in the Czech Republic, said Mineral mining company European Metals. A total of 19 resource drill holes would be completed during this campaign for a total of 5,550 m, with the first hole ‘well advanced,’ the company said.
Drilling was aimed at converting a ‘sufficient portion of the existing Indicated Mineral Resource to the measured resource category and subsequently to a mineral reserve, to cover the first two years of the scheduled mining plan and obtaining a sufficient amount of ore samples for the next phase of metallurgical testing,’ the company said.
‘A further two hydro-geological drill holes and four geotechnical drill holes are planned once resource drilling has been completed. ‘ it added.
Investment in Czech lithium project approved by European Metals shareholders
The shareholders of European Metals have approved the investment by Czech energy group CEZ. European Metals said the approval paves the way for Cinovec to become the first European Union producer of battery-grade lithium compounds from a local lithium source. Investment is worth €29.1 million (A$49.3 million) for a 51% interest in the company’s Cinovec lithium-tin project in the Czech Republic. That money will fully fund Cinovec to the decision-to-construct stage.
The transaction will be completed on 27 April, and the work program, including definitive feasibility study and front-end engineering, will begin immediately.
CEZ is an integrated energy group with operations in a number of countries in central and south-eastern European countries, and also in Turkey.
It generates and sells electricity and heat and natural gas, and mines coal.
CEZ plans to develop energy storage and battery manufacturing in the Czech Republic and central Europe.
Europe’s largest hard rock lithium project
European Metals managing director Keith Coughlan said the financing for this stage firmly entrenched Cinovec — Europe’s largest hard rock lithium project — as the pre-eminent lithium deposit on the continent.
“CEZ not only provide corporate, technical and financial strength, they fully share the company’s vision for the development of a lithium-ion battery industry in the Czech Republic,” he said.
Mr Coughlin added that all management of staff at European Metals and its Czech subsidiary Geomet are unaffected by the COVID-19 virus.
The present restrictions on travel and meetings are not expected to have any impact for the foreseeable future, with all staff able to continue working remotely.
Test work produces battery grade product
European Metals has so far completed 13,800m of diamond drilling at Cinovec.
Cinovec hosts an indicated resource of 372.4 million tonnes at 0.45% lithium oxide and 0.04% tin, as announced in 2017.
There is also an inferred resource of 323.5Mt at 0.39% lithium oxide and 0.04% tin, making for a combined contained resource of 7.22Mt of lithium carbon equivalent and 263,000t of tin.
An estimated probable ore reserve of 34.5Mt published three years ago would cover the first 20 years mining at an output of 22,500t per year of lithium carbonate.
Additionally, metallurgical test work has produced both battery grade lithium hydroxide and battery grade lithium carbonate, in addition to high-grade tin concentrates. European Metals said the tin resource is “globally significant.”
Cinovec lithium and tin project in Czech Republic fully funded
This is believed to be Europe’s largest deposit of the battery metal. European Metals Holdings’ shareholders have approved a major investment in the company’s Cinovec lithium and tin project in Czech Republic. Cinovec is now fully funded up to the decision to construct, EMH said, paving the way for the project to become the first European Union producer of battery-grade lithium from a local mine.
The decision allows Czech utility CEZ, in which the state holds a 70% share, to invest €29.1 million ($32m) for a 51% equity interest in Geomet. The company is EMH’s subsidiary and holder of the project licenses.
The deal could also help CEZ transition towards renewable energy and position itself as a main supplier for Europe’s electric vehicle (EV) industry.
Construction of the project, acquired by EMH in 2012, is expected to take two years.
Cinovec is located in the Krusne Hore Mountains, which divide the Czech Republic from the Saxony State of Germany. The asset is within a historic mining region, with artisanal extraction dating back to the 1300s.
Unlike most other lithium deposits in the world, Cinovec is in an area with built-in, working infrastructure, which includes a railroad. It is also located close to car makers, most of which have launched or are planning to introduce electric vehicles.
Among top producers
The world’s top three lithium producers are Australia, Chile and China. The Czech Republic could potentially take the fifth place, after Argentina, thanks to Cinovec.
The transaction, expected to close on April 27, comes as EV demand continues to rise.
Benedikt Sobotka, chief executive of Eurasian Resources Group and co-chair of the Global Battery Alliance said this week that EV penetration rates are growing across many countries, with the UK reaching a 7% rate in March, Germany setting a new record of 9% and France attaining a plug-in EV penetration rate of 12%.
The same pattern is evident in many other countries, Sobotka said. In Portugal, Tesla’s Model 3 became the second bestselling car in March, just behind the Mercedes-Benz A-Class and Italy EV sales are also at record high levels.