It seems it’s only a matter of time before we’re all driving electric vehicles. BMW (ETR: BMW), for example, intends for half of its total sales to be EVs as soon as 2030.

But before this can happen, there’s a major problem.

In short, EVs need lithium to power their batteries, but because of the pandemic, lithium supply chains are a real liability.

This is especially the case in Europe, where there are currently no operating lithium mines. In fact, the European Union recently added lithium to its critical materials list, stating its intent to reduce its dependence on imports for this crucial metal in battery manufacture.

Though this all provides a challenge for the EV industry generally, it’s actually great news for a company called Zinnwald Lithium (LON: ZNWD | FRA: 7WW) and its CEO, Anton du Plessis.

You see, du Plessis is aiming for Zinnwald to become one of the first companies to develop an operating lithium mine in Europe.

The company is advancing the project, which is located in Dresden close to the heart of German electric vehicle manufacturing. And given the focus on securing more reliable supply chains—especially in Europe—the timing could hardly be better.

To find out more, Mining Maven spoke to du Plessis about Zinnwald’s potentially game-changing project and how it could provide a reliable lithium supply for the continent.

A much-needed alternative to fragile supply chains

As pandemic control measures closed factories and shut down borders—especially links with China—the importance of local supply was emphasised.

While some had been voicing concerns about the stability of these globe-spanning supply chains for years, that voice grew into a shout as many in Europe began to look around and see the scale of the problem.

du Plessis explains:

“I think what the pandemic kind of showed up was that these long global supply chains do represent risks, in that they can be disrupted relatively easily.”

He goes on:

“As things stand, there are no operating lithium mines in Europe. The EU wants to change that. They recognize that in an increasingly polarized world, it’s sensible not to be reliant on supply from very distant places.”

Of course, it makes sense that Europe would want its own lithium supply, especially with the general push on the continent towards electrification.

“Most countries,” du Plessis points out, "are committed to ending the sale of internal combustion engine cars from 2035”.

He also explains that the EU has decided to commit €3.5 billion “to expand the battery industry in Europe”, with a portion “earmarked for the stimulation of raw material supply from within Europe”.

And the fact is, when it comes to expanding the battery industry, according to du Plessis, to power EVs, lithium-ion batteries are the “most viable in the near and medium term.”

Cutting carbon emissions

By developing a lithium mine in Europe, Zinnwald will also enjoy the benefits of helping to cut carbon emissions. Don’t forget: the EU has set a target of becoming carbon neutral by 2050.

But right now, Australia leads the world in lithium mining, where it’s made into a concentrate that’s then shipped to China. Once there, du Plessis explains:

“…it’s converted to a battery grade product in what is typically quite a carbon intensive process, just because of the nature of energy sources in China, which are often heavily coal based.”

Only after that can the battery grade product be shipped to Europe.

So, the current process not only depends on this long, fragile supply chain but also generates a great deal of carbon in converting and shipping the lithium itself.

“There’s a lot of transport miles in that whole setup. And if you could avoid that, obviously it’s better, especially given where international freight rates and international carbon prices are going,” says du Plessis.

By developing its mine in Europe, then, Zinnwald Lithium offers the EU a way out of this carbon-intensive and inefficient system.

An unbeatable location for EV production

Not only is Zinnwald Lithium’s project in Europe, but as mentioned earlier, it’s specifically located in a German industrial powerhouse.

The Zinnwald project—from which the company gets its name—is just 35 kilometres from Dresden on the border with the Czech Republic.

Surrounded by a growing EV manufacturing hub, the project is in the perfect place to capitalise on the EV boom. Says du Plessis:

“If you go and have a look at some of the announcements by Volkswagen in particular, they’re talking about 80% of their light passenger vehicle manufacturing being electric vehicles by 2030. To that end, they’ve already converted a number of their factories to making EVs.

“And if you look at where those factories are, they surround our project: there’s one in Leipzig, there’s one in Zwickau, and there’s one in Czech Republic. If you drew a circle of 50 kilometres around our project, those plants are all are all there.”

It’s a super smart location, especially as it’s also in the heart of Europe’s chemical industry too, making it easier to verify that the lithium end product is manufactured to a high standard and in an ethical manner.

Indeed, it’s crucial in battery making to have a product at greater than 99.7% purity, with extremely low levels of deleterious elements. After all, as du Plessis points out:

“If you’re a car maker making batteries, and the batteries are the most expensive part of your car, and you have to write an eight-year warranty on that battery, the last thing you want is for it to burst into flames. You really want to be able to be sure that the products you’re putting into that battery meet your spec and are consistent.”

It’s why, he goes on to point out, it would be much more straightforward for EV makers to:

“ able to go down the road, where there is a local team, and make sure that it’s all meeting your specs”.

Without doubt, the location is ideal and puts Zinnwald Lithium in an extremely strong position.

A whole range of potential resources

With the strong tailwind of a growing EV industry and the restrictive supply of lithium in Europe, Zinnwald Lithium’s future looks strong.

And investors will be pleased to see that a definitive feasibility study (“DFS”) was already completed in May 2019 on the Zinnwald project, which suggested a €428 million net present value before tax with a total JORC resource of 757,144 tons of lithium-carbonate equivalent (“LCE”).

That’s huge. But even then, additional licences have since increased the overall resource to more than 1 million tons of LCE.  

Plus, the DFS’s mine life of 30 years equates to less than 50% of the current identified mineral resources. Indeed, du Plessis believes the company’s “large resource and long life” will be key to the project’s success.

Furthermore, the company has moved on from exclusively focusing on lithium fluoride to “include a broader range of products and a few more mainstream products”. Primarily, this includes lithium hydroxide as that is the current focus of the European market. As du Plessis himself points out:

“One of the benefits of this project is it can produce a range of products. It’s quite a flexible project in that sense as it can produce lithium hydroxide, lithium carbonate, or lithium fluoride. But we will focus the study now on lithium hydroxide.”

There’s no wonder then that the company plans to advance towards production as quickly as possible. Given the sheer number of factors in its favour, it makes sense to get this project active as soon as possible.

“Lithium pricing has more than doubled since the beginning of this year,” explains du Plessis, and a ramp-up in lithium-ion battery production over time is likely to keep those prices high.

With shares up almost 70% year-to-date, investors are clearly starting to realise Zinnwald Lithium is perfectly positioned to capitalise on the increasing demand for lithium that the EV industry is driving at pace.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

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