EIT InnoEnergy to support financing & building of the Cinovec underground lithium mine in Czech Republic

European Metals Holdings Ltd (EMH) has announced that a ‘Value Added Services Agreement’ with EIT InnoEnergy, the principal facilitator and organiser of the European Battery Alliance, has been entered into by EMH subsidiary Geomet s.r.o. in respect of its Cinovec Lithium Project in the Czech Republic which is to be developed as a bulk underground operation.

The project, a joint venture between European Metals and CEZ, has been recently funded to the amount of approximately EUR 29 million, taking the project through to construction decision and the purpose of the financing agreement with EIT InnoEnergy is to support the construction financing and ultimate commercialisation of Cinovec, the largest hard rock lithium deposit in Europe, by EIT InnoEnergy providing assistance to EMH to cover:

  • Sourcing construction finance;
  • Securing grant funding; and
  • Assisting in offtake introductions and negotiations.

EIT InnoEnergy leads the the European Battery Alliance which was initated by the European Commission in 2017 to create a competetive and sustainable battery cell manufacturing value chain in Europe. Recently, the EU approved the Green Stimulus Plan, agreeing to invest more than EUR 500 billion into a climate change plan including electric vehicles and renewable energy.

Based on Cinovec’s economics, long mine life and proximity to the key manufacturing centers in Europe leading the EV development, the project is well positioned to work with EIT InnoEnergy and other European organisations to ensure timely development to assist in meeting the expected significant increase in this demand.

Keith Coughlan, EMH Executive Chairman commented: “European Metals and its development partner, CEZ, look forward to receiving support from EIT InnoEnergy and working together closely with their industrial and financial partners to deliver production at Cinovec, and contribute to a sustainable supply chain for a world leading centre for EV development and manufacture in Europe.”

He adds: “Cinovec is the largest hard rock lithium resource in Europe and is strategically located to produce lithium in Europe for Europe.  The requirement for locally sourced raw materials for the e-mobility movement has become more apparent during COVID-19, and Cinovec is well positioned in close proximity to Europe’s manufactures. Over the coming months we look forward to commencing the DFS work programmes, and subsequent permitting and construction of Cinovec.”

Diego Pavia, CEO, EIT InnoEnergy commented: “The clear mandate of the EBA250 and EIT InnoEnergy is to secure raw materials, technological development and industrial production of modern energy technologies in Europe, for Europe to be largely self-supporting in these critical sectors. Lithium is central to this as the single most critical metal required for almost all energy storage technologies – as the lightest metal and with the highest charge density to mass ratio, it cannot be replaced. We see Cinovec as critical to the development of Europe’s energy storage industry – it is the largest hard-rock lithium resource in Europe and the fourth largest globally, as such representing a strategic and accessible source of supply of a raw material critical to meeting the EU’s climate goals of electrification of mobility and large-scale development of renewable energy storage. We very much look forward to supporting the development of Cinovec and full integration of this project into the European battery value chain, with local, ethical, traceable and sustainable production of lithium.”

EIT InnoEnergy is a fully-commercial company, supported by the European Institute of Innovation and Technology. Formed in 2010, it has some 500 industrial partners and 24 shareholders. It leads the European Battery Alliance (EBA250), formed in 2017, which brings together over 120 European and non-European stakeholders representing the entire European battery value chain. This includes major auto manufacturers, battery and cathode manufacturers.

The objective of EBA250 is to build a strong pan-European battery industry that is able to help Europe capture a growing market worth €250 billion per annum by 2025. This industrial development programme supports the European Green Deal, which is the EU’s roadmap for making the EU’s economy sustainable.Under the Value Added Services Agreement, EIT InnoEnergy will support Geomet in the financing and development of Cinovec by assisting Geomet in:

  • Securing construction finance for Cinovec, potentially up to the full amount of the capex and working capital required to put the mine and lithium chemical plant into production;
  • Securing grant funding from applicable EU, national or regional grant schemes, for Project optimisation studies and economic development objectives, for development of green/sustainable energy projects (for example, through the Just Transition Fund recently announced by the European Commission);
  • Developing relationships with EIT InnoEnergy’s partner offtakers, with the intention of facilitating and advising on the negotiation of offtake agreements, potentially including offtake pre-financing; and;
  • Providing general support including education, communication and societal and environmental acceptance.

The agreement is non-exclusive and EIT InnoEnergy will work together with Geomet’s other advisers in finance, environmental and social advisory.