Benzinga - by Stjepan Kalinic, Benzinga Staff Writer.
Serbia is poised to grant Rio Tinto (NYSE:RIO) approval to develop Europe's largest lithium mine. The Jadar project, which was suspended in 2022, could start production by 2028, providing Europe with metal much needed for its electric vehicle (EV) industry.
"New guarantees from Rio Tinto and the European Union seem to address Serbia’s environmental concerns regarding the Jadar site in western Serbia," Serbian President Aleksandar Vučić said in an interview with the Financial Times.
The Jadar project, discovered by Rio Tinto geologists in 2004 near Loznica, contains a high-grade lithium-boron mineral, adequately named as Jadarite. This underground mine aims to produce 58,000 tons of refined battery-grade lithium carbonate annually, which would be enough to supply 17% of Europe's EV production, approximately 1.1 million cars per year.
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Additionally, it will produce 160,000 tons of boric acid and 255,000 tons of sodium sulfate annually, essential for various industrial applications, including renewable energy storage, solar panels, wind turbines, and household products. Serbia’s Finance Minister Siniša Mali estimates the project could boost the country’s GDP between $10.7 and $12.7 billion annually.
Despite the project’s potential, it faced significant opposition from environmental activists who raised alarms about potential water pollution and environmental degradation, citing Serbia’s already precarious ecological state. Furthermore, since Jadarite is in a mineral form and not in a liquid form (like brine), the newest solutions, like direct lithium extraction, are not applicable.
In 2022, the Serbian government revoked Rio Tinto's licenses following large-scale protests and a petition to halt the project that collected 30,000 signatures. These protests came during a politically sensitive time for Vučić, facing elections and domestic pressure. However, following recent municipal polls where Vučić’s party prevailed, the government seems comfortable reviving the project.
The EU’s involvement signals Serbia’s potential alignment with the West, as the country is also courted by China, Russia, and the Gulf nations. While Serbia aspires to join the EU, the accession process is slow due to concerns about the rule of law and corruption. Additionally, tensions exist over Kosovo’s status and Serbia’s lack of sanctions on Russia.
Vučić claims some European states initially tried to undermine the Jadar deal but have since come on board, fearing China’s potential involvement. Europe lacks domestic lithium production, and Jadar could fulfill 13% of the continent’s projected 2030 demand.
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