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European Metals Holdings (ASX:EMH) has seen shares pop +80% in Friday trades to 44cps after revealing to Australian shareholders its the beneficiary of a A$640M grant from the Czech Government to develop the former’s Cinovec hard rock lithium project.
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While the company noted on Friday it mightn’t end up with that exact amount, the Czech gov’t has committed to delivering up to that much money in assistance; the Czech Republic issued the grant under its own “Strategic Investments for a Climate-Neutral Economy” programme, an invention of the Ministry of Industry and Trade.
It’s separate from the aggregate EU’s overhead Raw Critical Materials Act, the vehicle under which the EU has recently said it will soon name a list of Australian projects to invest in, either directly or via offtake deals or other means, in an approach to private-public collaboration borne from Washington’s similar moves into US-listed MP Materials earlier this year.
That’s neither here nor there (assuming that EU member states aren’t just going to start making these investments of their own accord using their own internal legislative strategies, that’s an open question at the moment. If you have a line to an English speaking representative of the Czech industry department, flick me an email.)
But that shares in ASX-listed European Metals have soared +80% on Friday also speaks to a different simultaneous thematic: the recent uptick in lithium prices borne from projections that big-battery-storage demand will life re-emerge in what has been a sleepy lithium commodity market the last two years.
Major Chinese lithium futures benchmarks are posting YTD returns over +30% each; some investment bank analyses predict this strength can continue; the Chair of Ganfeng sees continued strength through next year, and CATL’s Jianxiawo mine in China remains below nameplate production.
So, lithium upside – EMH has lithium – an EU-wide push to begin investing in private sector mines around the world (in allied countries, at least) to secure supply capacity ex-China, and, the maybe-or-maybe-not-connected machinations of the Czech Republic’s own in-house green energy goals: all of these things together, it’s not hard to see why investors are paying interest to this little junior on Friday.
“The Czech Government’s award of a grant of up to EUR 360 million represents one of the largest direct project- level funding commitments to a critical raw materials project within the European Union,” EMH EC Keith Coughlan added on Friday.
EMH last traded at 44cps.
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