European Metals Holdings has revealed preliminary testwork results indicating a potential switch to a tunnel kiln for its Cinovec Lithium Project, promising substantial capital and operating cost savings alongside a reduced carbon footprint.
- Potential US$112m reduction in capital expenditure
- Annual operating cost savings of US$10m from tunnel kiln
- Tunnel kiln enables green electricity use, cutting emissions
- Combined with lithium plant optimisation, total opex savings reach US$64m
- Final decision on kiln technology expected by Q4 2026
Tunnel Kiln Could Slash Cinovec Project Costs
European Metals Holdings Limited (ASX:EMH) is considering a significant shift in the processing technology for its Cinovec Lithium Project that could cut capital expenditure by approximately US$112 million and trim operating costs by US$10 million annually. The move involves replacing two gas-fired rotary kilns with a single gas/electric tunnel kiln, a change that also opens the door to running the project solely on green electricity supplied by partner CEZ.
The tunnel kiln technology, common in the ceramics and brick industries, offers superior temperature control, lower heat losses, and modular construction benefits. These factors contribute to both cost savings and operational flexibility. Unlike rotary kilns, which operate at higher temperatures with inherent risks of product vitrification and maintenance shutdowns, the tunnel kiln maintains a controlled 850°C solids temperature, reducing energy consumption and improving lithium extraction efficiency.
Environmental Impact and Operational Advantages
Beyond the financial benefits, the tunnel kiln could drastically reduce the carbon footprint of the Cinovec Project. By enabling the use of electricity instead of natural gas for heating, CO2 emissions could be cut by about 98,000 tonnes annually. This aligns with the project’s strategic positioning as a low-carbon lithium carbonate producer, serving Europe’s growing electric vehicle (EV) and plug-in hybrid sectors.
European Metals’ Executive Chairman, Keith Coughlan, highlighted that the modular, off-the-shelf nature of the tunnel kiln components simplifies construction and reduces timelines, meaning the switch is not expected to delay the project. The kiln’s design also reduces dust and flue gas treatment requirements, further streamlining operations.
Synergy with Lithium Chemical Plant Optimisation
This potential kiln upgrade complements recent optimisations in the Lithium Chemical Plant (LCP) flowsheet, which are projected to cut operating expenses by an additional US$54 million annually. Combined, these enhancements could reduce total opex by US$64 million per year, although the precise impact on the Definitive Feasibility Study (DFS) economics awaits an update following the kiln decision expected by Q4 2026.
The LCP improvements were detailed in a recent announcement highlighting over US$54 million in annual reagent and power cost reductions, which could boost the project’s net present value beyond US$1.455 billion. Together, these developments underscore the strategic importance of Cinovec in securing Europe’s lithium supply chain.
Testwork Underpins Confidence in Tunnel Kiln Viability
Extensive testwork since 2022, managed by metallurgical experts including Dr. Jeff Claflin, has confirmed the tunnel kiln’s technical feasibility. Pilot-scale trials demonstrated lithium recovery rates of 93.4%, comparable or slightly better than the existing rotary kiln design, but achieved at a lower temperature and shorter residence time. The testwork also verified the kiln’s ability to handle the roast charge effectively, with no major redesign needed for the Prunéřov plant site footprint.
While the final decision on adopting the tunnel kiln is pending, the DFS update process will rigorously assess the financial and operational implications. The project benefits from strong backing by the Czech government and the European Union, including grants totalling hundreds of millions of euros, reinforcing its role as Europe’s largest hard rock lithium deposit and a critical strategic asset.
Bottom Line?
The tunnel kiln switch could reshape Cinovec’s cost structure and environmental profile, but investors should watch for the Q4 2026 DFS update to gauge the full impact on project valuation.
Questions in the middle?
- Will the tunnel kiln decision accelerate final investment decisions for Cinovec?
- How will the combined cost savings influence European Metals’ financing and partnership strategies?
- What are the risks if the tunnel kiln does not deliver the anticipated operational efficiencies?