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Lithium: The Czech Republic's 'white gold' rush

Lubos Palata in Usti nad Labem
September 15, 2023

Europe's biggest lithium deposit is located in the Czech Republic. The government in Prague recently outlined plans to boost the country's economy by mining and processing the resource. Not everyone is keen on the idea.

A sample of zinnwaldite (cinvaldit) at the Geomet company, which is in charge of lithium mining in Cinovec, Dubi, Czech Republic, May 16, 2023
The lithium in the Cinovec deposit is contained within a mica called zinnwaldite (cinvaldit)Image: Ondrej Hajek/dpa/CTK/picture alliance

The Czech village of Cinovec is sitting on a buried treasure: Europe's largest deposit of lithium.

Exploration has shown that the ground around Cinovec — which is situated about 100 kilometers (62 miles) northwest of Prague, close to the Czech-German border — holds 3–5% of the world's total lithium reserves.

Lithium, a light metal often referred to as "white gold" due to its color and market value, has become hugely important in recent years. It is in great demand because it is used, among other things, in batteries.

Indeed, both energy transition and e-mobility would be virtually impossible without lithium-based energy storage systems.

A game-changer for Czechia?

Prices for lithium have skyrocketed so much in recent years that extracting it is now worthwhile for the Czech Republic.

Czech Prime Minister Petr Fiala (2nd from left) looks at zinnwaldite (cinvaldit) at the Geomet company, which is in charge of lithium mining in Cinovec, Dubi, Czech Republic, May 16, 2023
Czech PM Petr Fiala (2nd from left) hopes that the extraction of lithium in the northwest of the country will bring jobs and prosperityImage: Ondrej Hajek/dpa/CTK/picture alliance

Lithium mining could be a real game-changer for Prague, because according to an analysis conducted by the Czech Chamber of Commerce, the country has exhausted all sources of growth and faces potential economic stagnation in the coming years.

Can lithium supercharge the Czech economy?

Prime Minister Petr Fiala hopes that lithium mining will breathe new life into the country's economy.

When Fiala laid out his vision for the development of the country over the next 30 years in early September, he listed six areas in which he feels the Czech Republic will have to make strategic investments. Lithium and the investment in its extraction and processing were the most surprising of these areas.

"Lithium is a key raw material for e-mobility, especially for battery storage. This is why we are working on starting extraction as soon as possible, ideally in the year 2026," he said.

A traditional mining region

Cinovec is situated at the heart of a region where ore has been mined since the 13th century and tungsten and tin since the 1940s.

Initial exploration in the 2010s revealed that lithium deposits in the region were significant — both here and just across the border in Zinnwald, Germany, where a smaller deposit is located.

The Czech Republic has already concluded a Memorandum of Cooperation with the German state of Saxony about possible cooperation on lithium extraction. On the Czech side, extraction will be managed by the majority state-owned electricity producer CEZ.

Almost a million lithium-ion batteries per year

The most recent pre-feasibility study showed that 2.25 million tons of ore could be extracted in Cinovec every year, which would allow for the production of just under 30,000 tons of lithium hydroxide. According to current estimates, that's enough ore to produce almost one million lithium-ion car batteries a year.

The Czech Republic would ideally like to produce the batteries, too, and is planning a gigafactory for that very purpose.

Graph showing the outlook for lithium-ion battery pack price and demand
Forecasts show that demand for lithium-ion batteries will continue to rise

"We can cover the entire chain from extraction, processing, battery production, chip production to the final production of cars," said Fiala. The hope is that the extraction of lithium will become an economic motor for the region.

From lignite to lithium

The region of Usti nad Labem is one of the poorest in the Czech Republic. When lignite mining — which provided thousands of local jobs — came to an end, the region was left with major structural problems.

Open-pit mining also left deep scars in the landscape, with over 100 settlements falling prey to excavators.

It is estimated that there could be jobs for 1,000 miners during the anticipated 25-year lithium extraction period. And the plan to build a gigafactory that would produce batteries for electric vehicles would bring more money and jobs to the region. CEZ estimates that extraction could begin in just four years.

'An opportunity' for the region

The Usti nad Labem region supports the project as long as it is managed in the most environmentally friendly way possible. "I see the prospect of lithium mining as an opportunity," said Jan Schiller, head of the regional authority and member of the opposition ANO party.

Jan Schiller, standing on a balcony with buildings in the background
Jan Schiller, head of the regional authority in Usti nad Labem, sees lithium mining as an opportunity, but stresses that local communities must be adequately compensated for any negative impact on living conditionsImage: Region Ústí

"But much depends on the general conditions that are negotiated before extraction actually begins," he told DW. "We all have vivid memories of the consequences of coal mining in the region. The communities must receive appropriate compensation for any negative impact and deterioration in living conditions."

Is there an alternative to more mining?

The region of Usti nad Labem is receiving money to phase out coal mining and change the structure of its local economy from the EU's Just Transition Fund. The plan is that some of this money will be channeled into developing the lithium project.

But some experts warn against the region moving from one type of mining to another. They recommend investing the money in education and a general restructuring of the regional economy instead.

Professor Michal Kolecko of Jan Evangelista Purkyne University in Usti nad Labem, is a vocal opponent of the lithium extraction plans. "I don't think that lithium is the right way to go," he told DW. "If we want to change the region and to give it a new future, we have to opt for root-and-branch change. We have to invest in sectors that have potential and give the region not only an economic future, but also change the social structure and education level of the population."

Concern about environmental impact

Opinion in and around Cinovec is divided. When a town hall meeting between citizens and representatives of CEZ was held in nearby Dubi on September 7, the hall was filled to capacity. According to Czech radio, locals are most concerned about the threat to their water supply and a deterioration in air quality as a result of the transportation of the mined raw material.

Aerial view of evaporation pools for salt mining in the Salinas Grandes salt flat in the northern province of Jujuy, Argentina, October 18, 2022
Aerial view of evaporation pools for salt mining in the Salinas Grandes salt flat in the northern province of Jujuy, Argentina, which is part of South America's 'lithium triangle'Image: MARTIN SILVA/AFP

As is the case with the extraction of all non-renewable resources, the mining of lithium will have an impact on the environment.

In South America's "Lithium Triangle," which includes parts of Argentina, Bolivia and Chile and holds about 70% of global lithium reserves, groundwater levels sank considerably in some areas when lithium-rich brine was pumped to the surface. The careless actions of some companies also led to the pollution of air, water and soil in some areas.

In Cinovec, lithium would be extracted from ore. The method required to mine lithium there is water intensive. It also consumes much more energy and is more expensive than extraction from salt lakes.

According to CEZ, the approval procedure for lithium extraction will begin at the end of 2023. But the company seems to have no doubts about the outcome of the procedure: It has already spent one billion Czech crowns (€40.8 million or $43.5 million) buying a plot of land for a lithium processing plant.

This article was originally published in German.

Portrait of a man with blond hair, wearing a white shirt and a blue and black checked jacket
Lubos Palata Correspondent for the Czech Republic and Slovakia, based in Prague