Balkan Insight. Birn.
Serbia and EU signed a memorandum of understanding on critical raw materials that will enable a major lithium-mining project, which has sparked major protests, to go ahead despite environmental concerns.
Serbian Minister of Mining and Energy Dubravka Djedovic Handanović and European Commission vice-president and ‘Green Deal’ overseer Maroš Šefčovič signed a memorandum of understanding on critical raw materials, battery value chains and electric vehicles in Belgrade on Friday – a move that will enable a major lithium mine to be constructed after years of controversy and protests.
The main reason for the agreement is multinational corporation Rio Tinto’s planned lithium mine in the Jadar Valley in the west of the country, which has been opposed by local residents and environment activists.
The EU is seeking lithium sources for use in electric car batteries in order to reduce its dependence on Chinese imports. In an indication of how important the mine project is to the European bloc, the high-profile signing ceremony was overseen by German Chancellor Olaf Scholz and Serbian President Aleksandar Vucic.
After the signing, Vucic told media that he will “personally fight” for the environment and lives of residents of the Jadar Valley.
“We believe in enormous progress for our country, it will bring us 6 billion [euros] in foreign direct investments. By far the biggest investments we have ever had in our country,” Vucic said.
Before the signing ceremony, at an event called ‘Serbian Critical Raw Materials Summit 2024’, German Chancellor Scholz said that in his opinion, the Jadar lithium mine is a “good project for Serbia”.
“It creates new value chain potentials, provides opportunities for job creation, not only when it comes to mining, but also in other steps of processing, connects Serbia with the future of mobility, which must work without carbon dioxide emissions,” Scholz said.
The importance of the agreement was underscored by the presence of top international banking executives.
Serbian Minister of Economy Adrijana Mesarovic signed a letter of intent on the development of the e-mobility value chain within Serbia with Odile Renaud-Basso, president of the European Bank for Reconstruction and Development president Christine Lagarde, member of the executive board at KfW Group, a German state-owned investment and development bank, Rio Tinto Group CEO Jakob Stausholm, and the chairman of the board of management of the Mercedes-Benz Group, Ola Kallenius, as well as representatives of other companies.
In recent days, the Serbian authorities have been clearing legal obstacles to the mine project.
On Tuesday, the government put back in force a spatial plan for the realisation of the project to exploit and process lithium, which had been cancelled by the authorities in 2022 after mass protests.
The day before the signing, the Serbian government the adopted a “conclusion on determining the basis” for the memorandum of understanding.
The memorandum says Serbia and the EU will focus on “facilitating close cooperation between EU and Serbian industrial actors and stakeholders and encouraging the development of a mutually beneficial pipeline of projects including via networking, initial selection of project proposals, joint project development, and promotion and facilitation of trade and investment linkages along the whole value chain from exploration to end product, with special focus on the EV [electric vehicles] industrial ecosystem”.
It adds that “such projects should contribute to the EU’s and Serbia’s respective economic security”.
Rio Tinto’s planned lithium mine in the Jadar Valley has been a major issue in Serbia for several years, which entered a new phase in recent months, after state officials openly mulled returning to it despite the 2022 cancellation.
A BIRN investigation published in February 2023 showed that Rio Tinto had spent at least 1.2 million euros on buying land in Serbia at the proposed site of the mine, even after the project was formally cancelled.
Activists fear the project will damage water and land in western Serbia, while some Serbs say they feel steamrollered by the powerful multinational mining giant. They also claim the financial benefits for the country will be small and note that Rio Tinto’s various ventures around the world have often been dogged by controversy.
Serbia’s government shelved the project in January 2022, following months of escalating protests and growing public anger.
“Everything is finished. It’s over,” said then Prime Minister Ana Brnabic. The move came just before elections in April that year.
Lithium mining is a chemical-intensive process that involves digging up vast amounts of rock and extracting those with lithium.
Rio Tinto claims the lithium mine planned in the Jadar Valley region will be among the biggest in Europe and make the company one of the top ten lithium producers in the world.
The project has strong backing from the UK, Australia, the US and the EU. The EU imports almost all of the lithium it uses but has ambitions to secure an entire supply chain of battery minerals and materials, as the demand for lithium is predicted to grow 18 times by 2030 and 60 times by 2050, mainly as a result of the transition to electric vehicles powered by batteries using lithium.
