Czech Prime Minister Petr Fiala said his government is looking to facilitate lithium mining as it is a strategic raw material for the recovery of the Czech economy. The Cínovec area, located 100km northwest of Prague, holds the largest lithium deposit in Europe. Geomet, a Czech company that is part of the energy giant ČEZ, is running the deep mining operation, which is expected to start between 2026 and 2028.

Lithium is a crucial component in producing electric vehicle batteries. As demand for EVs increases, the World Bank projects a 965% rise in lithium production by 2050. Currently, 98% of lithium production occurs in Australia, Latin America and China.

After meeting with local mayors from municipalities, Fiala said they support Lithium mining as they recognise its importance for regional development.

“What they want is for us to set the conditions and rules and the whole project in such a way that it takes into account the interests of residents, citizens and the whole region,” Fiala said after the meeting.

Throughout the 20th century, the Cinovec site was used for mining tungsten. However, due to the collapse of communism and lower tin prices, the mine was closed in 1993. Appetites have since been piqued by the large untapped lithium deposits in the area. A study in 2022 concluded potential lithium mining projects in the area have a net present value of $1.98bn.

Nevertheless, some locals object to the project due to its potentially negative environmental impacts. Květoslav Koutník, mayor of Újezdeček, where the lithium processing plant is intended to be constructed, said: “It bothers us that there will be crushing, sorting, loading, re-sanding, perhaps the use of chemicals and that only a few dozen metres from the houses where people live.”

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The Czech economy has stuttered in 2023, with GDP growth slowing to 0.3%. Mining developments could bolster sentiment and nudge the country towards stronger economic performance.