Shares of European Metals Holding (ASX, AIM: EMH) surged on Friday after the company received a €360 million ($417 million) grant from the Czech government for its 49% stake in the Cinovec lithium project in the Czech Republic.

This funding represents one of the largest EU government investments in mining development projects. Executive Chairman Keith Kaufland stated that the decision underscores Cinovec's crucial role in building Europe's electric vehicle supply chain.

The Cinovec mine is designated a strategic asset under the EU's Critical Raw Materials Law, allowing for faster licensing and financing. The Czech government has also designated it a strategic mineral deposit, streamlining the approval process. According to the company, the Cinovec mine boasts Europe's largest lithium resources and one of the world's largest undeveloped tin resources.

Located approximately 100 kilometers northwest of Prague, the site previously received a $36 million grant from the EU's Just Transition Fund.

Cinovec's proximity to factories of German automakers such as Mercedes-Benz, BMW, Volkswagen, and Porsche is a major selling point. European automakers are facing increasing regulatory pressure to expand production of electric vehicles using lithium-ion batteries.

European metals closed up 58% in Sydney at A$38; by afternoon, London shares were up 70%, pushing market capitalization to £46.13 million ($61 million).