Euro Manganese (ASX:EMN) has awarded the Engineering, Procurement, and Construction Management (EPCM) contract for its Chvaletice Manganese Project in the Czech Republic to Wood Australia.
Wood was selected as EPCM partner following a rigorous selection process following 5 ‘high-quality’ bids submitted by global firms in late 2022. The company provides consulting, projects and operations solutions in 60 countries, employing some 35,000 people.
Euro Manganese selected Wood as the preferred contractor in April 2023 and has now concluded the contract negotiations and received board approval to award the contract to Wood.
The contract is cost reimbursable and is structured in several phases, with an approval stage gate between each phase as well as after the gap analysis in phase one. Completion of phase one is anticipated to take about 12 months, with a final investment decision (FID) to be made prior to start of phase two.
Receipt of FID requires securing outstanding permits and project finance, both debt and equity.
Addressing the progress and appointment of Wood, Euro Manganese President and CEO Dr Matthew James says: “Awarding the EPCM contract to Wood is another key milestone for the company. It is the result of an extensive and robust selection process, and I am very pleased to be partnering with such a high calibre, tier-one engineering firm. We look forward to building a world-class facility to produce high-purity manganese, an essential component in lithium-ion batteries for EV vehicles. Together, we are working to advance the global energy transition.
We fully respect the robustness of the ESIA process and are committed to minimising project impacts to the surrounding communities. I am confident that we will move forward to a successful conclusion given the positive statements received from the other stakeholders.”
“We fully respect the robustness of the ESIA process and are committed to minimising project impacts to the surrounding communities”
Phase one is the Front End Engineering Design (FEED) phase and includes an initial 2-month gap analysis and in-depth review of the Definitive Feasibility Study (DFS) deliverables, including the testwork and flowsheet development conducted by the company over the past 7 years.
Following completion of the gap analysis, other key deliverables to be derived over the remaining 10 months during phase one include completion of value engineering; identification of long-lead time equipment; vendor engagement, selection and firm pricing for major equipment items and packages; total installed capital cost estimate to AACE Class 3 estimate accuracy (+/- 10%); project implementation strategy; a baseline schedule for the EPCM phase; and preparation of construction permit documentation.
Upon making the FID, Euro Manganese will enter into the Engineering, Procurement and Construction Management (EPCM) phase of the contract once conditions precedent are satisfied.
Wood will provide overall project and construction management services throughout the EPCM phase of the project, which includes detailed design, procurement, construction, and commissioning.
The company reports the key outstanding permits for the Chvaletice Project include the Environmental Social Impact Assessment (ESIA) approval, followed by the Land Planning Permit, and then the Construction Permit.
Meanwhile, the Czech Ministry of Environment received comments from 14 relevant authorities on the ESIA, which was submitted in December 2022. All but one of the authorities approved the relevant studies, signalling a positive perception of the project by regulators. The Ministry has returned the ESIA to the company to address comments from the authority yet to approve the ESIA, related to noise abatement. Euro Manganese expects to address these comments without an effect on the timeline to FID.
The company notes that while the Chvaletice Project’s anticipated noise levels are within legislative limits for an industrial project, as neighbouring operations adjacent to the project site have existing noise emissions, the cumulative effect marginally exceeds permitted noise levels at the measurement points, located at the closest residential areas.
The revision of the noise study within the ESIA has also been requested to consider new noise legislation related to traffic noise coming into force in July 2023. The details of this new legislation were released after the project ESIA was completed and submitted.
The necessary work to address the comments related to noise have already begun, and the revised ESIA is expected to be submitted in August 2023, when the ESIA process can then continue. Euro Manganese anticipates the issuance of a positive decision on the revised ESIA before the end of 2023.
Upon approval of the ESIA, the Land Planning Permit will then be submitted. The company reports the approval timeline is typically 3 months once submitted, resulting in an anticipated approval by mid Q2 2024.
As highlighted, the Construction Permit documentation is a deliverable of the FEED phase and is expected to be submitted at the end of Q2 2024. The permit approval timeline for the Construction Permit is three months, resulting in an anticipated approval by Q3 2024
Euro Manganese is a battery materials company focused on becoming a producer of high-purity manganese for the electric vehicle industry and other high-technology applications.
The company is advancing development of the Chvaletice Manganese Project in the Czech Republic, which is a unique waste-to-value recycling and remediation opportunity involving reprocessing old tailings from a decommissioned mine. The company says the Chvaletice Project is the only sizable resource of manganese in Europe, strategically positioning the Company to provide battery supply chains with critical raw materials to support the global shift to a circular, low-carbon economy.
Write to Adam Orlando at Mining.com.au
Images: Euro Manganese Ltd
