PRAGUE — The Czech Industry and Trade Ministry says it has signed a memorandum of understanding with European Metals Holdings, a step for the Australian company toward mining lithium, a key component in electric batteries.

Europe’s biggest deposit of lithium has recently been found in the northwestern part of the Czech Republic. EMH has had an exclusive license to explore for the element and the right to seek permission to mine.

It plans to open a mine at Cinovec, on the German border, and previously said it wants to produce about 3,800 tons of lithium a year.

That would place the country among the top five lithium producers in the world.

As part of its deal with the ministry, EMH agrees to process the lithium in the country.

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