European Metals Holdings reveals lithium chemical plant design improvements at Cinovec that could slash reagent and power costs by over US$54 million annually, potentially boosting the project’s pre-tax NPV beyond US$1.455 billion.
- US$51 million annual reagent cost reduction potential
- Over 25% power consumption cut equating to US$3.4 million savings
- Slight increase in lithium recovery to 91.1%
- Independent review supports viability pending testwork
- Environmental Impact Assessment progressing towards year-end completion
Significant Operating Cost Reductions from LCP Optimisation
European Metals Holdings Limited (ASX:EMH) has delivered a promising update on its flagship Cinovec Lithium Project, unveiling preliminary design optimisation results for the lithium chemical plant (LCP) that could materially cut operating costs. The company estimates reagent consumption savings of US$51 million per annum, alongside a power usage reduction exceeding 25%, translating to an additional US$3.4 million in annual savings based on Definitive Feasibility Study (DFS) pricing assumptions.
These efficiencies stem from a reconfiguration of the LCP process flowsheet, which reduces the consumption of key chemicals such as tri-sodium phosphate, caustic soda, and sulphuric acid. SysCAD process simulation modelling, underpinned by locked cycle testwork from 2022 and 2024, forecasts an 80% cut in caustic soda use, a 65% reduction in sulphuric acid, and a 54% decrease in sodium sulphate output. Notably, lithium recovery is expected to improve slightly from 90.8% to 91.1%, enhancing overall plant performance.
Independent Technical Review and Next Validation Steps
The optimisation proposal has undergone a fatal flaw analysis by renowned metallurgist Dr Stephen La Brooy of Ausenco Services, who concluded the revised flowsheet is likely viable pending confirmation through further testwork. Dr La Brooy recommends a new series of locked cycle tests to validate the SysCAD model and confirm reagent reductions, lithium recovery improvements, and the maintenance of battery-grade lithium carbonate quality.
European Metals plans to update the DFS once the testwork stabilises process stream compositions to the satisfaction of independent reporting chemical engineers. This update could quantify the exact increase in the project's pre-tax NPV8, which currently stands at US$1.455 billion from the December 2025 DFS, potentially enhancing the project's economic attractiveness.
Potential Capital and Operating Cost Benefits from Tunnel Kiln Testwork
Separately, the company is advancing testwork on substituting the current gas-fired rotary kiln with a tunnel kiln, which may be powered by renewable electricity and/or gas. Early indications suggest this could further reduce both capital expenditure (capex) and operating expenditure (opex), although these benefits remain subject to confirmation. This innovation aligns with broader decarbonisation trends and could enhance Cinovec’s sustainability credentials.
Environmental Impact Assessment Progresses Smoothly
The Environmental Impact Assessment (EIA) public hearing occurred on 17 June 2026 without any new substantive issues raised by local stakeholders. The EIA process is on track to conclude by the end of 2026, a critical milestone that will allow Geomet s.r.o., the project operator, to apply for mining and construction permits. These permits are essential for commencing construction of the underground mine, the Dukla transfer portal, and the lithium chemical plant.
The Cinovec Project remains well positioned with strong European Union and Czech government support, including up to EUR 360 million in grants and designation as a Strategic Project under the EU Critical Raw Materials Act. The project’s scale and strategic location underpin its role in supplying Europe’s growing electric vehicle and energy storage markets.
Bottom Line?
The LCP optimisation could reshape Cinovec’s cost structure and project economics, but investors should watch for locked cycle test outcomes and the forthcoming DFS update to gauge the full impact.
Questions in the middle?
- How will locked cycle test results influence the timing and scope of the DFS update?
- What are the potential capex and opex savings if the tunnel kiln testwork proves successful?
- Will the EIA process conclude without delays to unlock critical mining and construction permits?