The Czech government has approved an MoU with the majority state-owned energy company CEZ to build a “gigafactory” in the country to produce batteries for electric cars. The investment is to amount to around two billion euros.
Rumour has it that the Volkswagen Group or its Czech subsidiary Skoda and LG could also be involved in the project. This is reported by the news website Seznam Zprávy, among others. While it is not official, it is not far-fetched either: Industry and Trade Minister Karel Havlicek recently told Reuters that the state was holding talks with two potential partners – including Volkswagen – and that they were prepared to offer incentives worth billions to bring at least one cell production plant into the country.
It is confirmed that the government has approved the text of the said memorandum with CEZ, and it is expected to be signed later today. On Twitter, Havlicek made public that the plant, with an estimated investment of more than 50 billion crowns (about 1.94 billion euros), is to create at least 2,300 jobs.
The news agency CTK further specifies that CEZ is ready to participate in the project both as an investor and energy and lithium supplier. Other quotations from the memorandum picked up by the media read: The Gigafactory is a “strategic project that could accelerate the transformation of both energy and automotive industry”. Furthermore, the project could “create a unique opportunity for transforming structurally affected regions in the Czech Republic”. The paper also states that cooperation in the battery supply chain should be strengthened, for example, concerning the domestic mining of lithium or battery recycling.
The Czech Republic has the largest lithium deposit in Europe. Around three per cent of the world’s lithium reserves are said to be found in the Czech Ore Mountains. However, the lithium is contained in a granular rock, which has not made mining lucrative. But that could change with rising demand and, ergo, rising commodity prices.
In any case, the CEZ Group sees a business in lithium mining, just as it does in battery cell production in general. Last year, the energy supplier already invested in the Bratislava-based company InoBat Auto, which is planning a cell factory in Slovakia. The initial plan is to build a 100 MWh production line in Voderady before building a 10 GWh factory in 2024.
The CEZ Group consists of more than 100 individual companies and is, by its own account, the largest energy supplier in the Czech Republic. The conglomerate is also active in other countries in Central and Eastern Europe. According to the company’s website, projects are also under development in Germany and France.
“The governments of the Czech Republic and Slovakia have announced a partnership in the field of electromobility, and this is one of the projects that fulfil this initiative,” Pavel Cyrani, deputy chairman of CEZ Group, said last year, referring to InoBat Auto’s planned cell factory. Even then, Cyrani added that another such “gigafactory” could be built in the Czech Republic and, in addition, the mining of lithium in Krušné Hory, i.e. the Czech part of the Ore Mountains, was conceivable. So the current memorandum has been casting its shadow for a long time.
Both Slovakia and the Czech Republic have several car plants and are trying to preserve these plants and jobs with the change to electric mobility.
With reporting by Cora Werwitzke, France.
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