On July 19, German Chancellor Olaf Scholz visited Belgrade (Serbia) to sign an agreement on critical raw materials, key elements in Europe’s energy transition and autonomy. Behind this agreement lies the controversial project of exploiting a lithium mine in the Jadar region, a project suspended two years ago by the Serbian government under popular pressure.
The extraction of lithium in Serbia, particularly in the Jadar region, has become a central issue in the context of the country’s European ambitions. Discovered in 2004, Jadar’s lithium reserves are among the largest in Europe and represent a major strategic opportunity for both Serbia and Europe. Managed by the Anglo-Australian mining giant Rio Tinto, this project could produce 58,000 tons of lithium carbonate annually, enough to equip approximately 1.1 million electric vehicles, or 17% of European electric vehicle production.
Lithium is a crucial metal for manufacturing batteries for electric vehicles, a rapidly expanding sector as the European Union plans to ban the sale of thermal vehicles starting in 2035. Thus, the exploitation of this resource in Serbia fits into a broader dynamic of energy transition and reducing Europe’s dependence on China, the world’s leading producer. The Chinese company CATL alone produces about 35% of the world’s lithium batteries.
The Jadar mine project has sparked numerous debates and opposition, particularly due to environmental concerns and potential impacts on the surrounding agricultural region. In 2022, under protest pressure, the Serbian government suspended the project, offering a victory to the protesters. However, this was overturned by a Constitutional Court decision that deemed the suspension unconstitutional, paving the way for operations to resume.
This initiative is accompanied by significant European partnerships and support, aiming to ensure that the raw material remains on European soil and to strengthen the value-added chain in Serbia. Serbian President Aleksandar Vučić sees this project as a unique opportunity to attract billions in investments and modernize the Serbian economy. It is also a means of complying with Brussels’ wishes and gaining points in the integration process, which is dear to the nationalist president. Integration remains an economic rather than an ideological goal, as Vučić has recently been very critical of Western hegemony and its handling of the war in Ukraine.
Thus, lithium extraction in Serbia is not merely a mining operation but integrates into a broader strategic vision of sustainable economic development and rapprochement with the European Union.
Serbian Lithium: an economic treasure at the heart of Europe
The Jadar lithium mine project, located in western Serbia, is one of the most ambitious and promising mining projects in Europe. Managed by Australian company Rio Tinto, this project aims to exploit one of the largest lithium reserves in the world. The strategic importance of this mine is not limited to lithium production. It also involves major economic partnerships with several leading European companies. Discussions are underway with automakers such as Mercedes, Volkswagen, and Stellantis to secure lithium supply. The signing of a memorandum of understanding between Serbia and the European Union on raw materials and the battery and electric vehicle supply chain is another crucial aspect of this project. This agreement aims to ensure that the lithium extracted in Serbia stays in Europe, thus strengthening Europe’s strategic autonomy in battery production. President Vučić confirmed that lithium exports would be destined exclusively for European partners. He emphasized this promise to European leaders to reserve exports for the European market despite China’s interest, which remains an important partner for Serbia. Belgrade assumes a balancing act, working with all types of partners, breaking free from the bloc system that opposes many geopolitical issues.
This strategic decision consolidates economic relations between Serbia and the European Union while ensuring stability in lithium supply for European industries. Serbia’s commitment not to export more than 12% to 13% of the raw material and to transform the rest into higher value-added products, such as cathodes or batteries, highlights the country’s intent to develop a robust local industry integrated into the European economy.
What Economic Impact for Serbia?
The potential economic impact of this project for Serbia promises to be significant. The Jadar mine could attract billions of euros in foreign investments, boost employment, and promote industrial development. Serbia also benefits from financial and technological support from the European Union. Its integration into the Green Agenda for the Western Balkans and the Economic and Investment Plan, which envisions massive investments in sustainable projects, will further strengthen the country’s development potential.
By closely associating with the European Union and attracting international investments, Serbia aims to position itself as a major player in the European energy transition. However, a number of negative externalities and challenges must be considered for a complete analysis.
Environmental Issues and Social Protests
The exploitation of Jadar’s lithium reserves raises significant concerns about the environmental impact. Jadar is a primarily agricultural region, and residents fear that mining activities may contaminate arable land, water sources, and disrupt the local ecosystem. Lithium extraction processes can release hazardous chemicals and cause long-term soil and groundwater pollution.
These concerns are amplified by Rio Tinto’s controversial environmental management history. The company has faced heavy criticism in other regions for its mining practices, leading to increased distrust among local communities and environmental activists in Serbia. Rio Tinto is particularly accused of causing significant environmental damage during the exploitation of the Panguna mine on Bougainville Island, Papua New Guinea, in the 1980s. Mining activities ceased in 1989 following a sabotage campaign by residents frustrated by environmental destruction and the lack of economic benefits for the region. This case will be heard in October 2024. The company is also accused of dynamiting an Aboriginal site in Australia. These events have not gone unnoticed by the Serbian population, which remains highly critical of the government’s decision and had widely protested against the mine’s exploitation.
In response to these concerns, Rio Tinto and the Serbian government have promised to adhere to strict environmental standards and implement protective measures to minimize ecological impact. They pledge that standards will be in line with those of the EU. However, facing the challenges posed by climate change and energy transition, the population worries about possible exemptions that Rio Tinto might benefit from.
Local Mobilization and Opposition Two Years Ago
In 2022, protest movements led the Serbian government to temporarily suspend the project. Protesters widely criticized the lack of transparency and public consultation in the decision-making process. Despite promises from the government and Rio Tinto regarding environmental protection, mistrust persists. Project opponents continue to voice their concerns, fearing that economic interests will outweigh environmental and social considerations. The recent Constitutional Court decision authorizing the project’s resumption has reignited tensions, and protests have erupted to denounce what they see as a decision driven by foreign interests at the expense of Serbia’s sovereignty and environmental security.
Commitments and Protective Measures: Towards Sustainable Exploitation?
In response to these protests, the Serbian government has made several commitments to ensure responsible and sustainable lithium resource exploitation. President Vučić asserted that environmental protection would be a priority, announcing that top European experts would be on-site to supervise the project and guarantee adherence to the highest standards.
The government also signed a memorandum of understanding with the European Union, emphasizing the importance of sustainable natural resource exploitation. This agreement includes not only rigorous environmental standards but also investments in clean technologies and sustainable mining practices. Additionally, EU funds will be allocated to support sustainable development and environmental protection initiatives in Serbia.
To build local trust, the government promised monitoring and transparency mechanisms, including regular consultations with affected communities and rigorous environmental impact assessments. Guarantees were made that most of the extracted lithium would be processed locally, thereby reducing risks associated with transporting and exporting unrefined raw materials.
Serbia’s integration into the European Union also requires compliance with European environmental standards. The EU’s strict environmental protection requirements offer a regulatory framework that could ensure mining operations follow sustainable practices and minimize negative impacts.
However, the success of these commitments will depend on effectively implementing protective measures and the ability of Serbian authorities and involved companies to keep their promises. The European Union has also shown a willingness to relax its energy policies in the past to catch up with the United States and China, whose environmental standards are far from exemplary. Recent European elections were devastating for green parties, while nationalism gained additional seats.
A stepping stone to European integration?
Serbia is in the midst of negotiations for EU membership, a process involving a series of economic, political, and social reforms. As we have seen, lithium extraction fits into the EU’s strategy to promote ecological transition and strengthen its energy sovereignty. Serbia can align with EU goals while remaining a reliable partner to Moscow. Belgrade’s objective remains to benefit from access to the single market, European development funds, and free movement of goods and people, while continuing to work closely with Russia.
In the context of the war in Ukraine, this can be unsettling. But Serbia is keen to maintain this neutrality within a bloc logic. While the country recognizes Ukrainian sovereignty, it refuses to sanction Moscow, aligning with the strategy of “Global South” countries and denouncing the Western “double standards.” The choice of Rio Tinto perfectly illustrates this characteristic since the Australian mining company aligned with Canberra’s sanctions against the Russian regime. Working closely with the Russian aluminum giant Rusal before the launch of the “special operation,” Rio Tinto suspended the supply of alumina, an essential raw material for aluminum production, a decision confirmed by Australian courts.
German cooperation and support
European support is also manifested by Germany’s commitment, with Chancellor Olaf Scholz proposing aid for developing a more comprehensive value chain around lithium production in Serbia. This includes investments in local infrastructure for transforming lithium into cathodes and batteries and potentially producing electric vehicles in Serbia.
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