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Serbia is preparing to give Rio Tinto the green light to develop Europe’s largest lithium mine two years after Belgrade called off the project, paving the way for a significant boost for the continent’s electric vehicle industry.
President Aleksandar Vučić said that “new guarantees” from the Anglo-Australian miner and EU looked set to address Serbia’s concerns over whether necessary environmental standards would be met at the Jadar site in the west of the country.
In an interview with the Financial Times, Vučić indicated that he was confident he would also secure the necessary commitments from EU leaders for related investments in Serbia, such as battery manufacturing and electric vehicle production.
As long as his demands over “the whole value chain plus perfect environmental protections” were met, Vučić said, he expected business and political leaders would come to Belgrade next month for a formal announcement on the project.
“If we deliver on everything, [the mine] might be open in 2028,” he said, adding that it was projected to produce 58,000 tons of lithium per year — “enough for 17 per cent of EV production in Europe — approximately 1.1mn cars”.
He added: “I really believe this might be a game-changer for Serbia and the entire region.”
The government revoked Rio Tinto’s licences in January 2022 after protests, led by environmental groups concerned about water pollution, displacement of residents and damage to the area once the mine closed, blocked highways and bridges across Serbia.
They came at a time when Vučić, who became premier in 2014 and president three years later, was facing elections and domestic political pressure. But following municipal polls on June 2, most of which were won by Vučić’s ruling SNS party, the government appears to believe the coast is clear to proceed with the project.
The planned resurrection of the deal with Rio Tinto, and the EU’s involvement, are seen by western officials as an important signal of Serbia’s geopolitical alignment at a time when it is being courted economically and politically by China, Russia and the Gulf nations.
Serbia has been an EU candidate country for more than a decade, but the accession process has moved slowly amid concern in Brussels over issues such as the rule of law and corruption. Belgrade has also locked horns with the EU over the status of its former province Kosovo, and is one of only two European countries not to impose sanctions on Russia over Moscow’s full-scale invasion of Ukraine.
EU officials “thought that we were going to give [the mine] to the Chinese”, Vučić said. “We did not intend to do that because we promised we were going to deal with the EU.”
Vučić, who insisted he remained committed to Serbia joining the bloc, claimed that some European states had tried to undermine the Jadar deal, before coming onboard. “They were even participating in the organisation of protests here . . . I asked myself, why are they doing it? They are going to lose everything and the Chinese will take [their place].”
Europe has virtually no domestic lithium production at present and Jadar would generate enough to meet 13 per cent of the continent’s forecast demand in 2030, according to Fastmarkets, a commodities research company.
Jadar contained high-grade lithium and the mine’s deposits were large compared with others globally, said Martin Baker, senior analyst at Fastmarkets.
Siniša Mali, Serbia’s finance minister, said the project would provide a big boost to Serbia’s economy, adding between €10bn and €12bn to annual gross domestic product, which totalled €64bn in 2022. He noted that Serbia planned to ban lithium exports and said the country wanted “to build a complete value chain”.
Belgrade had always been in favour of the mine as long as it met strict environmental standards, Mali said. Its cancellation had been partly “a political decision” to avoid unrest in the run-up to elections.
Savo Manojlović, co-head of Go Change, the environmental group that led the protests in late 2021, said opponents would not give up the fight if the deal were resurrected. “We will organise to defend our ecological standards and constitutional rights,” he said.
Chad Blewitt, Rio Tinto’s managing director for the Jadar project, said that since the deal had been mothballed, Rio Tinto had run 125 sessions with the local community to win public support.
The miner, which on Thursday released a draft environmental assessment that included estimates of potential water, air and soil impacts, would be “radically transparent” in its operation of the site, he said.
Rio Tinto said it welcomed “a fact-based public dialogue”, adding that the draft assessment indicated the project could be “developed safely and comply with the highest Serbian and EU environmental standards”.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
