Two years after Belgrade called off an initiative to build Europe’s largest lithium mine, Serbia is giving Rio Tinto Group (ASX: RIO) (LON: RIO) permission to revive the project.
On Saturday, President Aleksandar Vučić said the new deal with the miner and European Union were looking to deal with Serbia’s issues regarding environmental standards at the Jadar site.
Vučić expressed confidence that he would secure the necessary commitments from EU leaders for related investments in Serbia, such as battery manufacturing and electric vehicle production.
He said that if his demands for “the whole value chain plus perfect environmental protections” were met, he expected business and political leaders to come to Belgrade next month for a formal project announcement.
“If we deliver on everything, the mine might be open in 2028,” he said. The projections for the mine include 58,000 tons of lithium per year, which is enough for approximately 1.1 million cars or 17 per cent of EV European EV production.
“I really believe this might be a game-changer for Serbia and the entire region.”
In January 2022, the Serbian government revoked Rio Tinto’s licenses after environmental protests. However, following the ruling SNS party’s victories in the June 2 municipal elections, the government now seems ready to proceed with the project. Western officials view the potential deal with Rio Tinto and the EU’s involvement as a significant indication of Serbia’s geopolitical direction, amid interest from China, Russia, and Gulf nations.
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Serbia denied EU entry due to law and corruption issues
Serbia has been an EU candidate country for more than a decade. However, Brussels has been dragging its feet because of issues surrounding the rule of law and corruption. Belgrade has also clashed with the EU over the status of its former province Kosovo. It has also not imposed sanctions on Russia for Moscow’s full-scale invasion of Ukraine.
Originally EU officials thought Serbia was going to give the mine to the Chinese, according to Vučić.
“We did not intend to do that because we promised we were going to deal with the EU,” Vučić said . He reinforced his commitment to Serbia joining the bloc, and claimed that some European states actually tried to undermine the Jadar deal.
“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].”
At present, Europe has virtually no domestic lithium production. According to Fastmarkets, a commodities research company, the Jadar project would generate enough lithium to meet 13 per cent of the continent’s forecast demand in 2030.
Serbia’s Finance Minister, Siniša Mali, said that the Jadar lithium project would significantly boost Serbia’s economy, adding €10bn to €12bn to the annual GDP, which was €64bn in 2022.
Mali mentioned plans to ban lithium exports and to create a complete value chain in the country.
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Environmental groups will continue protests
Environmental group Go Change leader, Savo Manojlovi, indicated that protests would continue if the deal were revived.
Chad Blewitt, Rio Tinto’s managing director for the Jadar project, reported that since the project’s suspension, the company had held 125 sessions with the local community to gain public support. He emphasized Rio Tinto’s commitment to being transparent and complying with the highest environmental standards.
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