European Metals Holdings Limited (LON:EMH) is taking a lot of encouragement from the  decision by Volkswagen to locate its first electric vehicle plant at Zwickau, 90km from the Cinovec lithium deposit.

 Zwickau is due to come on stream in November, meanwhile VW has also announced a 16Gw battery cell factory will be built in conjunction with green energy group Northvolt.

Lithium hydroxide is on the products EME intends to produce.

European Metals recently extended its exploration licence at Cinovec, which is in the Czech Republic, until the end of 2020.

Talks are also underway over a potential partnership CEZ Group (CEZ), the Czech Government-majority owned power utility.

Cinovec is the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource.

Total indicated resources are 372.4mln tonnes grading 0.45% Li2O and 0.04% tin.

Losses for the year to June were A$3.25mln (A$4.67mln).