THE CONFERNCE CALLER: With the European Union now securing an electric vehicle (EV) future, one ASX-listed junior has found itself in the driver’s seat as it accelerates the development of the Continent’s largest hard rock lithium resource. By Mark Fraser
Over the next 12 months European Metals Holdings (ASX: EMH) plans to complete a definitive feasibility due diligence and front-end engineering design for its underground Cinovec project in the Czech Republic, with the ultimate goal of supplying a minimum of 25,267 tonnes of lithium hydroxide per annum, or 22,500 tonnes per annum of lithium carbonate, to the EU EV battery market for at least 21 years.
The company is also looking to boost Cinovec’s resource model by injecting more probable ore reserves into the proven category, progressing the environmental impact assessments for mining and processing, completing locked-cycle test work and flowsheet optimisation as well as conducting additional discussions with potential strategic partners.
As it stands, the project – which sits around 100 kilometres north west of Prague near the Czech Republic/German border – is the largest hard rock lithium resource in Europe and the biggest non-brine resource in the world.
So far European Metals has established a JORC-compliant resource of 4.08 million tonnes (indicated) and 3.15 million tonnes (inferred) of ore grading 0.42 per cent lithium oxide for a lithium carbonate equivalent of 7.22 million tonnes.
Originally a tin mine, the revamped 1.68 million tonnes per annum Cinovec operation will involve underground crushing and surface milling/beneficiation before the wet magnetic separation of lithium concentrate.
The production of lithium hydroxide or carbonate is set to come via a gypsum and sodium sulphate roast, water leaching, purification and product precipitation/crystallisation.
Tin and tungsten by-products are also expected from gravity separation, while the lithium plant should produce some potash and sodium sulphate.
In addition, there is potential for the recovery of a pure silica product suitable for use in glass and ceramics. Overall, the company will be using low risk and conventional technologies in its downstream processing circuit.
During Vertical Events’ recent New World Metals in Western Australia, European Metals executive chairman Keith Coughlan said Cinovec’s construction capital cost was currently US$486 million, while the lithium hydroxide operating costs were US$3,435/t and US$4,876/t with and without credits respectively.
After-tax economics totalled US$1.08 billion (using a net present value discount of 8%), with the project’s internal rate of return running at 28.8 per cent.
These numbers, Coughlan said, suggested the project “could well be the lowest cost (lithium) hard rock producer in the world.”
Ultimately, this is good news for a junior like European Metals, which is establishing itself in a market where the majors have traditionally monopolised the critical mineral’s supply chain.
“More recently there has been an emphasis on developing the local resources that are there in Europe that have been sitting idle for some time,” Coughlan noted.
“Europe has been largely anti-mining for some considerable time now.
“It has taken them a while, but they have woken up to the fact that they do need to develop their local resources – certainly if they are going to hit anywhere near the (EV) targets that have been stated.
“Importantly, within 500 miles of our project, there are currently six million vehicles made a year, and every year more and more of those vehicles are being made electric.”
Cinovec has already attracted the interest of some significant investor partners, including the Czech national power company CEZ Group, which has injected £29 million into the project to help carry it through to a construction decision.
Principal facilitator and organiser of the European Battery Alliance – EIT InnoEnergy – has also thrown its support behind the venture as it assists in sourcing construction finance, securing grant funding as well as facilitating off-take introductions and negotiations.