Zinnwald lithium project in Germany now 2nd largest in EU

The lithium project is expected to generate 400 jobs in first five years. (Image courtesy of Zinnwald Lithium.)

Shares in Germany-focused Zinnwald Lithium (LON: ZNWD) soared on Wednesday after it increased by 445% the mineral resource estimate (MRE) for its the namesake project in the eastern state of Saxony.

The update makes of Zinnwald the second largest hard rock lithium project in the European Union (EU) by both resource size and contained lithium, chief executive Anton du Plessis said in a statement.

Europe’s largest hard rock lithium deposit and the world’s fourth-largest non-brine asset is the Cinovec lithium project in the Czech Republic, owned by European Metals (ASX, LON: EMH) and state-controlled utility CEZ.

Zinnwald Lithium’s stock climbed more than 41%, closing at 7.55p on Wednesday. This leaves the company with a market capitalization of £35.84 million ($45.2m).

The project’s latest resources estimate incorporates 26,911 metres of new diamond core drilling across 84 drill holes and a reinterpreted and updated geological model since the previous estimate, released in September 2018, the company said.

Located in the heart of Europe’s chemical and car industries, the project, about 35km from Dresden, is expected to produce battery grade lithium carbonate, lithium hydroxide and lithium fluoride (Li2CO3, LiOH, LiF) or a combination of them.

Prices for lithium, once called “white oil” are down more than 80% from their 2022 peak due to slowing growth in electric vehicle sales, including in the top EV consumer China, and a market oversupply.