Not Gunna Be Enough Lithium, page-1658

from the minister of trade in CZ Josef Sikela

This week I gave an important interview for @faznet . I have attached its translation here for those interested.Officially, German-Czech relations are hailed as "as good and close as ever". And as if it needed any more proof, the President of the Czech Republic, Petr Pavel, visited the German Embassy last week to celebrate the Day of German Unity and to emphasize the "common values" here and to draw attention to the fact that "we are on the same page with Germany".Economic relations are also close: a third of Czech exports go to Germany. However, relationships are not entirely without clouds. Pavel admitted it himself with a bon mot: "When the German economy coughs, the Czech economy gets pneumonia." It probably won't be too bad, even if the economy slows down. Economists expect stagnation, if not a mild recession - just like in Germany.Prague's Minister of Trade and Industry Jozef Síkela has this in mind. But he is also troubled by other topics. It is about Volkswagen on the one hand, and energy and climate policy on the other, in which the two governments are not "on the same page". Volkswagen has played a prominent role in the Czech Republic since the Wolfsburg-based concern took over the Czech car manufacturer Škoda in the late 1990s. Škoda is the largest industrial enterprise in the country, where almost a tenth of the gross domestic product is generated in the automotive industry. Only Slovakia produces more cars per capita.Therefore, what Síkela, the former chairman of the bank's board of directors, told FAZ in an exchange of views in Prague sounds logical: "The successful future of the Czech economy is very closely connected with the transition from classic car production to electric vehicles." But you need chips and batteries for that. Síkela is now negotiating with an American investor about the chip factory; Volkswagen shows a long-term interest in building a battery factory in the Czech Republic.There is talk of an investment of five billion euros. The land for the factory with 4,000 employees, the old airport near Pilsen, is already ready. Síkela says he convinced most of the skeptical neighbors. However, VW repeatedly postponed the decision. Now the situation could shift. The chairman of the board of the automobile concern, Oliver Blume, plans to come to Prague in October to talk with Síkela and Prime Minister Petr Fiala.Their impatience is growing: "I really did everything and at many political costs to make this investment happen," says Síkela. Now is the time to decide. The government has to decide on the possible high expenses for airport renovation. "We can't wait forever, we have to decide this year." And then he adds: "Other investors are showing more interest." It does not provide any names. There is speculation in the Czech media about the South Korean battery manufacturer LG. But he would probably build somewhere else.If VW were to cancel the Gigafactory project, the land would revert to the military. And if the Wolfsburg concern were to pull out, some in Prague would be disappointed, especially given the billions of dollars the United States has at its disposal to attract this type of investment. In addition, VW announced at the weekend a large investment in the production of battery cells in Poland. Independently of this, lithium reserves should be available on the border with Saxony. The raw material is needed for the production of batteries.In order for the mining process to begin quickly, the government is considering accelerating investment planning in all critical infrastructure, be it energy or transportation. Many things were left unresolved in the past, which now need to be caught up, says Síkela. Prime Minister Fiala recently called the period of the government of Andrej Babiš, who was replaced in 2021, "lost years".It is not only a large German concern that causes frowns in Prague. The same applies to Germany's energy policy. According to Síkela, Germany is of the opinion that the energy crisis is over. But that's wrong. No one knows whether Russian gas will continue to flow to Eastern Europe, such as Hungary, Slovakia and Austria, when the contract between Russia and Ukraine expires at the end of 2024. A similar disruption could "cause big problems in Europe". This also applies to countries that, like the Czech Republic, have disconnected from Putin's gas.Síkela is worried about more than just security of supply: the price increase could strengthen criticism of sanctions against Russia, pro-Russian sentiment among many voters and parties critical of the EU. "Households will make us feel it in the next election." Therefore, the continent should prepare for supply shortages and price fluctuations through intensive infrastructure development. His government bought gas warehouses (from RWE) and the gas pipeline network for many hundreds of millions of euros.Liquefied natural gas (LNG) terminals are also needed, such as the disputed German terminal near Mukran in Rügen, from which the Czech Republic would like to draw additional gas. Construction work has already started, the court rejected the complaints. However, Síkela says: "I am not sure if Germany correctly understands the country's role for Europe's energy security." He "feels that Germany is now primarily focused on itself." Berlin is not fulfilling its responsibility in Europe and for Europe.He compares Germany's role in the EU to that of a mountain leader who has to look out for the weakest members of the group if he doesn't want to lose them: "The goal is for the group to stay together and maybe even grow in the future." Síkela urgently demands a change in energy, climate and decarbonization policy in the EU: "We must replace ideology with pragmatism and economic thinking."He refers to Japan and South Korea, both highly industrialized states, as the EU: "They do what they can afford economically." Where there is a risk of overload in the EU, he also says: with the EU directive on renewable energies or with the tightening of the standard for diesel engines to Euro 7, which his government also blocked. This does not mean that the development of green energies should be reduced.The Czech Republic wants to end coal mining by 2033 and soon supply itself entirely with electricity from renewable sources and nuclear energy. Tendering for up to four new nuclear reactors is underway. 70 percent of Czechs consider it good. Next year, the government should decide who will build and how many new large reactors. Síkela is in a hurry: "The sooner we decide, the better. In the past, we lost a lot of time."