Euro Manganese’s Chvaletice PEA Signals a Push for European Manganese Refining Independence

Euro Manganese’s updated Preliminary Economic Assessment (PEA) for the Chvaletice Manganese Project in the Czech Republic is emerging as a timely marker for Europe’s effort to reduce reliance on external suppliers for critical battery materials. For investors, the study matters not only for its projected returns, but because it is designed to address a specific weakness in Europe’s battery supply chain: access to high-purity manganese products.

Strong projected economics tied to a refining bottleneck

The PEA estimates a pre-tax Net Present Value (NPV) of roughly US$740 million and a post-tax NPV of about US$492 million, using an 8% discount rate. It also reports a pre-tax Internal Rate of Return (IRR) of 16% and a post-tax IRR of 13.8%, alongside an operating margin near 48%. While these figures support the project’s financial case, they also underscore why manganese refining capacity is central to Europe’s battery ambitions.

According to the study, around 95% of global high-purity manganese processing capacity is concentrated in China. That concentration creates structural dependency for Western battery supply chains—an issue that Chvaletice is positioned to help mitigate by supplying high-purity manganese products into Europe’s battery and energy-storage ecosystem.

Manganese’s growing role in lithium-ion chemistry

Manganese is increasingly relevant in lithium-ion battery design because it can improve thermal stability and safety performance, while also helping reduce reliance on more expensive and constrained materials such as cobalt. As European electric vehicle production expands, demand for manganese-based battery chemistries is expected to rise, aligning with policy priorities including CBAM (Carbon Border Adjustment Mechanism), the EU Battery Regulation, strategic autonomy objectives, carbon transparency and lifecycle emissions rules, and efforts to reduce dependence on Chinese processing networks.

A circular-economy approach with EU critical-raw-material support

Chvaletice is located approximately 90 kilometers east of Prague and is described as the only major identified manganese resource within the European Union. Instead of developing a conventional open-pit mine, the project reprocesses historical tailings from a former manganese mine that operated between 1951 and 1975. The company frames this as turning legacy industrial waste into battery-grade raw material—an approach intended to fit within Europe’s circular economy and environmental remediation framework.

In 2025, Chvaletice received Strategic Project designation under the EU Critical Raw Materials Act, which unlocks accelerated permitting pathways and greater visibility across European industrial and financial ecosystems. The Czech government has also granted the deposit “Strategic Deposit” status. Together, these designations strengthen the project’s positioning as Europe seeks to localize key components of battery supply chains.

Financing includes non-dilutive support ahead of FID

Euro Manganese has secured approximately US$150 million in non-dilutive financing through agreements with Orion Resource Partners. The financing structure includes convertible and royalty-linked components intended to support development ahead of a Final Investment Decision (FID). In addition, the European Bank for Reconstruction and Development (EBRD) has taken an equity position in the company to back demonstration plant development and feasibility advancement.

The updated PEA also introduces a phased development approach designed to reduce upfront capital requirements and improve financing flexibility—an important consideration given ongoing volatility in global critical minerals financing markets even as long-term demand remains strong but near-term capital conditions are uncertain.

Regulatory alignment and proximity to EV manufacturing

The project’s relevance extends beyond mining economics into industrial integration. Europe’s electric vehicle manufacturing base continues expanding through initiatives linked to Volkswagen, Tesla Berlin, Mercedes-Benz, BMW, ACC, and Northvolt. These gigafactory projects require large volumes of cathode and precursor materials sourced under increasingly strict EU carbon rules and supply-chain regulations.

Chvaletice’s location inside [[PRRS_LINK_2]] places it within efficient transport distance of multiple planned and operating gigafactories. The company argues this could reduce logistics costs, supply risk, and embedded transport emissions compared with importing materials from Asia.

Chvaletice is also described as fitting emerging regulatory frameworks such as CBAM and the EU Battery Passport system—both of which require documentation around embedded carbon emissions, mineral origin traceability, supply-chain transparency, renewable energy sourcing, and ESG compliance. Because the project relies on tailings reprocessing rather than conventional extraction, Euro Manganese expects a lower environmental footprint than many traditional mining projects. The company has emphasized this sustainability advantage as part of its strategy.

Demonstration output supports cathode supply chain inputs

Euro Manganese has already produced high-purity manganese sulphate monohydrate (HPMSM) at its demonstration plant. HPMSM is identified as one of the key inputs for lithium-ion battery cathode production.

Key risks remain before investment decision

Despite its strategic positioning and institutional backing, Chvaletice has not yet reached Final Investment Decision. Remaining risks include permitting requirements, financing availability, construction timelines, and exposure to manganese price cycles influenced by Chinese market dynamics. More broadly, Europe still lacks a fully integrated battery materials ecosystem comparable with China—particularly across refining capacity as well as cathode production.

A wider challenge for Europe’s energy transition

Chvaletice illustrates a broader structural challenge facing Europe’s energy transition: even if mining projects succeed or processing capacity grows locally, the continent must build an integrated chain spanning mining, chemical refining, battery manufacturing, renewable energy supply, grid infrastructure, and industrial logistics. Without that full ecosystem in place end-to-end—from raw material through manufacturing—strategic autonomy in battery materials remains incomplete.