My opinion is that the political situation will be sorted out before they even start to consider the idea.
Although the importance of the MoU has been used for political gain, it's existence isn't as important as the politicians and the market is making out, as it is not a legally binding document. EMH legally has all the rights anyway! However, we still do have the signed MoU. We would get an announcement if there was any change to that. Babis could easily have cancelled it in the last 3 months, but he knows what's best for the country. Especially in terms of the statement within the MoU that the processing will be carried out within the Czech Republic. This is just a short term interim situation for his political gain.
We will not get an announcement if nothing has changed. The SP is at these levels because the Market is waiting for an announcement or at least assurance from EMH that nothing has changed. At the moment EMH cannot give that assurance for fear of winding Babis up again. Of course EMH can do that when it won't matter to Babis (ie he won't feel he can gain politically). This will be the case when Babis has either formed a Government or has gone completely. A little more patience is all that is required.
The following is a recent interview with Jaroslav Borka (KSCM) - the communist Party. He was the first politician to complain about the MoU before the election in October and has been following the development for 2 years. As the (KSCM) have all along argued that 'lithium does not belong to foreign hands and should remain with the state'. You would assume that his views would be the most extreme on this issue.
This article however indicates that even from the communists point of view, EMH have to continue:
'As far as the state-owned company Diamo is concerned, it certainly can not begin the survey where it is carried out by Geomet, simply because it does not have the necessary permissions. And even if it were, Geomet experts have been researching these deposits for ten years, and they certainly will not know their Diamond. The train is already running and jumping into it while driving is risky'.
'Under the applicable Mining Act, EMH still has the right to mining' .But the key question remains where the lithic carbonate will be processed. That's the added value. Subsequent battery production, collaboration with the companies that use them, follow-up scientific research. If we can not run this production and keep it with us, we lose most of the profit'
The MoU states that all the processing will be done in the Czech Republic!
'Do you think that such legislative changes will be introduced to prevent the "lithium case" from being repeated for other raw materials found on our territory? What should be done for this?
In my opinion, this must be done'
This is a statement that he is obviously resigned to the fact that EMH will continue, but the state must change legislation to prevent this happening again.
EMH Price at posting:
44.0¢ Sentiment: Buy Disclosure: Held
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