The share price of European Metals gained 11% on Monday, as the company announced that its Cinovec lithium project, in Czech, has been classified as strategic, which means that it has priority for grant funding from the Just Transition Fund (JTF).
The JTF supports European Union regions relying on fossil fuels and high-emission industries in their green transition.
The JTF allocated €1.64-billion to Czech, of which the Usti region has been allocated about €632-million.
The first call for grant applications under the JTF opened on November 14, 2022, and closes on December 31, 2023.
Given the total amount which may be applied for by the 11 designated strategic projects in the Usti region in the first call is about €350-million and that the funds allocated in this first call from the JTF totals about €300-million, the company is confident that Cinovec will receive a significant portion of the funds applied for from the JTF for the project.
The maximum funding to be made available upon application to each strategic project in the Usti region is about €49-million. The Cinovec project has been allocated the maximum possible JTF grant, subject to passing through the application process, funds remaining available and obtaining the necessary permits for the early-stage Cinovec work programmes to which this grant funding is planned to be applied to, in particular the early full development of the twin decline entry/egress system for the mine.
"This approval provides further evidence of strong support from the Czech government and the European Union and the Europe-wide recognition of the critical part which the Cinovec project will play in enabling the EU to reach its stated goals of lithium self-sufficiency by 2030,” said chairperson Keith Coughlan.
"The proposed grants from the Just Transition Fund could play an important part in accelerating the development of the Cinovec project. For example, the initial entry into the deposit via twin declines and ancillary road network at the proposed Dukla site are likely to be early-stage beneficiaries of this funding. This could reduce the time until first ore is produced by the Cinovec project post final investment decision. As the funding is in the form of a non-repayable grant this could also have the additional benefit of not diluting the existing shareholders of the company.”
The Cinovec mine will produce 29 386 t/y of lithium hydroxide, according to a prefeasibility study update, published earlier this month.