PRELIMINARY REPORTThe Ministry of Industry and Trade submits a...

PRELIMINARY REPORTThe Ministry of Industry and Trade submits a draft government regulation on the determination of a deposit of strategic importance in the Cínovec area.The Government of the Czech Republic is authorized to issue a government regulation on the basis of Section 6a, paragraph 2 of Act No. 44/1988 Coll., on the protection and utilization of mineral resources (Mining Act), as amended by Act No. 465/2023 Coll.The submitted draft government regulation was prepared in connection with ensuring the state's raw material security and with regard to the fact that lithium in battery quality, which is undoubtedly achieved in the locality in question, is a strategic and also critical raw material according to Annex I and II within the meaning of Regulation 2024/1252 of the European Parliament and of the Council establishing a framework for ensuring secure and sustainable supplies of raw materials. The future mining of the Cínovec deposit will thus meet one of the fundamental objectives set out in the Regulation of the European Parliament and of the Council, which is to reduce the risk of supply disruptions in relation to critical raw materials that could distort competition and fragment the internal market.Lithium is considered a critical raw material due to its high economic importance. Given its role in implementing the green transformation and the need for its use, the demand for it is likely to increase exponentially in the coming decades. It is therefore in the interest of the Czech Republic and the European Union to create conditions for its extraction and processing in such a way as to reduce dependence on its supplies from third countries.The proposed legislation has a positive impact on the total revenue of public budgets. The expected direct revenue is given by the sum of the payment for extracted minerals, payment for mining space, employee levy, personal income tax, VAT, corporate income tax and real estate tax. The expected direct revenue to public budgets is CZK 3,155 million per year, of which CZK 2,324 million per year will be the state budget revenue, CZK 68 million will be the annual revenue of municipalities in the Ústí nad Labem Region, CZK 18 million will be the annual revenue of the Ústí nad Labem Region, and CZK 745 million will be the revenue of other municipalities and regions in the Czech Republic.The subject of the government regulation is the determination of critical reserved mineral deposits in the Cínovec area as a deposit of strategic importance.The amendment to the government regulation is expected to come into effect on February 1, 2025.The Minister of Industry and Trade has requested the Minister of Justice and the Chairman of the Legislative Council of the Government for an exemption from the obligation to process an impact assessment of the RIA regulation for the aforementioned draft government regulation on the determination of a deposit of strategic importance - the lithium deposit in Cínovec.The Minister of Justice, by letter dated October 17, 2024, ref. 61014-2024-UVCR, in accordance with Art. 76(2) of the Legislative Rules of the Government and point 5.7 of the General Principles for Regulatory Impact Assessment granted the requested exemption from the obligation to conduct a regulatory impact assessment for the proposal in question.