Approaches to harnessing mineral profits to create a sovereign wealth fund – a case study of lithium utilization in the Czech Republic

This thesis evaluates different approaches to managing windfall revenues generated by future lithium mining in the Czech Republic. The thesis summarises the theoretical approaches to the use of windfall revenues and analyses the different forms of utilisation of these profits, such as domestic consumption, tax relief or deposit in foreign exchange reserves. These methods of management are not optimal for the Czech economy and it is advisable to save these profits in sovereign funds. Furthermore, the role of sovereign funds, their classification, investment strategy is defined, taking into account the optimal application for the Czech Republic. When establishing a sovereign fund, the Czech Republic should give priority to the savings function, and possibly also to the stabilisation function. The final part contains a proposal of a theoretical model of a Czech sovereign fund financed from future revenues from lithium mining.