Serbia gives green light to Rio Tinto Lithium mine

Two years after Belgrade cancelled the project, Serbia is ready to give Rio Tinto green light to build Europe’s biggest lithium mine. This will provide a major boost to the electric vehicle industry on the continent.

Aleksandar Vucic, President of Serbia, said “new guarantees” would address Serbia’s concerns about whether environmental standards will be met on the Jadar mine site in the western part of the country.

Vucic said in an interview that he is confident of securing the necessary commitments for investments related to Serbia such as battery production and electric vehicle manufacturing.

Vucic stated that he expects business and political leaders to come to Belgrade for an official announcement of the project next month, as long as his requirements regarding “the entire value chain” plus “perfect environmental protections” are met.

He said that if they met all their targets, the mine could be operational in 2028. The mine is expected to produce 58,000 tonnes of lithium each year, which would “be enough for 17 percent of the EV production in Europe, or approximately 1.1 million cars”.

He said: “I truly believe that this could be a game changer for Serbia and the whole region.”

Rio Tinto licences were revoked by the government in January 2022, after protests led by environmentalists concerned about water contamination, displacement of residents, and damage to area once mine closes.

The project was launched at a moment when Vucic – who became president in 2015 after becoming premier in 2014 – was under pressure from domestic politics and facing elections. The government seems to have decided to move forward with the project after the municipal elections on June 2. Most of the votes were won by Vucic and his ruling SNS party.

Western officials see the planned revival of the Rio Tinto deal, and EU involvement, as an important sign of Serbia’s alignment geopolitically at a moment when it is being courted by China, Russia, and Gulf nations economically and politically.

Serbia has been a candidate for the EU for over ten years, but due to concerns in Brussels about issues like corruption and the rule of laws, the process has slowed down. Belgrade also fought with the EU about the status of the former province of Kosovo and is only one of two European countries that have not imposed sanctions on Russia for its full-scale invasion in Ukraine.

Vucic stated that EU officials “thought we would give [the mine] the Chinese”. We did not plan to do this because we had promised to deal with EU.

Vucic, who said he was committed to Serbia’s joining the EU, claimed some European countries had attempted to undermine the Jadar agreement before they joined. “They even participated in the organisation here of protests. . . Why are they doing this? “They are going to lose it all and the Chinese will replace them.”

Fastmarkets, an commodities research firm, says that Europe produces virtually no lithium at the moment. Jadar, however, would be able to generate enough to satisfy 13 percent of the projected demand for Europe in 2030.

Martin Baker, Senior Analyst at Fastmarkets, stated that Jadar had high-grade lithium, and its deposits were huge compared to others around the world.

The global race for lithium-ion batteries

Sinisa Mali said that the project will provide a major boost to Serbian economy. It is expected to add between €10bn-€12bn annually to gross domestic product (GDP), which totalled €64bn by 2022. He said that Serbia was planning to ban exports of lithium and stated the country’s desire “to build a full value chain”.

Mali claimed that Belgrade has always supported the mine, as long as they meet strict environmental standards. Mali said that the mine’s cancellation was partly “a decision taken on a political basis” in order to prevent unrest before elections.

Savo Manojlovic said that opponents would not stop fighting if the agreement was revived. He said: “We will organize to defend our constitutional rights and ecological standards.”

Chad Blewitt said Rio Tinto, the managing director of the Jadar project had held 125 sessions to gain public support.

He said that the miner would operate its site in a “radically transparent manner” after releasing a draft of an environmental assessment on Thursday, which included estimates of possible water, air, and soil impacts.

Rio Tinto welcomed “a factual public dialogue” and said that the draft assessment showed the project “could be developed safely and in compliance with the highest Serbian environmental standards and EU standards”.