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Czech government, ČEZ sign MOU on $2.4B, 40GWh gigafactory; ČEZ lithium mine project progressing

The Czech Ministry of Industry and Trade (MIT) and majority state-owned energy group ČEZ signed a memorandum of understanding regarding the construction of a gigafactory for battery cells for electric vehicles. The document sets forth the basic conditions for the establishment of the factory and is a prerequisite for agreements with other potential investors, including automakers and battery manufacturers.

ČEZ and MIT envision an investment of at least CZK 52 billion (US$2.4 billion) in the project, with an annual production capacity of 40 GWh.

The automotive industry is the cornerstone of the Czech economy and its share in our GDP is almost 10 percent. Now, in line with our Country for the Future strategy, we need to take steps to move it to the next level. Electromobility is a reality and it is very important that one or more battery cell factories are established in our country in the Czech Republic. Each of the factories can employ more than two thousand people directly in the plant, and thousands more jobs will be created in related sectors. Our government is ready to ensure the conditions that would support the project, including by building key infrastructure.

—Deputy Prime Minister and Minister of Industry and Trade Karel Havlíček

ČEZ, in the top 10 of European utilities by customer count as well as installed capacity, is also the largest operator of public charging stations in the Czech Republic and is also preparing for hard-rock lithium mining in Cínovec with partner European Metals Holdings (EMH), the output from which could be used in the gigafactory, expected to be sited some 55 km away.

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cínovec Lithium/Tin Project. Geomet s.r.o. is owned 49% by European Metals and 51% by ČEZ through its wholly owned subsidiary, SDAS.

The Cínovec project, located on the German border of the Czech Republic, is the largest hard-rock lithium resource in Europe, containing lithium-bearing mica known as zinnwaldite. Cínovec is also the fourth-largest non-brine lithium deposit in the world and is also a globally significant tin resource.

In May, EMH reported that successful locked-cycle test (LCT) results further support the Cínovec project’s credentials to initially produce battery-grade lithium carbonate. European Metals has demonstrated that Cínovec battery grade lithium carbonate can be easily converted into lithium hydroxide monohydrate with a commonly utilized liming plant process.

Six LCTs were planned but testwork was stopped after four cycles as the main process stream compositions had successfully stabilized. Battery-grade lithium carbonate was produced in every LCT with lithium recoveries of up to 92.0% achieved in the four LCTs performed. Further optimization work in hydrometallurgy processing steps is expected to improve lithium recoveries from concentrate to >92.0%.

ČEZ fully owns the largest Czech mining company (SD) covering 65% of ČEZ’s current lignite needs. Coal-fired power plants represented 37% of capacity and 36% of generation volume in 2020; their revenues are 16% of total. The ČEZ goal for 2030 is to reduce CO2 emissions by 30% compared to 2018 and reduce the emission intensity to at least 300 g/kWh by a combination of closure of selected coal plants and development of renewables. ČEZ has made a commitment for carbon neutrality by 2050.

The gigafactory is a strategic project that is intended to accelerate the transformation of both the energy and automotive industries in the Czech Republic. The projects of the plant and the related lithium mine are also opportunities to improve the living conditions of the regions awaiting structural transformation due to the downturn in the coal industry, ČEZ noted.

The Ministry of Industry and Trade and ČEZ are negotiating with other potential investors in the project, such as car manufacturers and battery manufacturers.

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