Serbia considers reversal on Rio Tinto’s $US2.55 billion Jadar mine approval

By Glenn Dyer | More Articles by Glenn Dyer

Out of the blue, the Serbian government is reported to be ready to reverse itself and approve the nearly $US2.55 billion Jadar lithium/borate mine of Rio Tinto.

The Financial Times reported online on Sunday that Serbian President Aleksandar Vui had said his country is preparing to give Rio Tinto the green light to develop Europe’s largest lithium mine, two years after it was blocked following an upsurge in local opposition.

How the government plans to overcome local opposition remains to be seen.

Vui led the government that blocked the mining project back in 2022 after months of protests from locals in western Serbia, where the Jadar project is located.

Rio had plans to produce up to 55,000 tonnes a year of lithium carbonate from the underground mine, as well as borates as a byproduct. (Rio has extensive experience in handling borates from its mine in California.)

Earlier this year, it was reported that Serbia wants to hold further talks with Rio Tinto about the Jadar project, a day after Rio made it clear there was nothing happening and it was more interested in spending money in Argentina on the metal and on its major commodity, iron ore, in Africa and WA.

Serbian President Aleksandar Vui told Reuters at the Davos talkfest in Switzerland in mid-January that there should be more public discussion over whether the project should go ahead. Vui’s government revoked licenses for Rio’s $US2.4 billion Jadar project in January 2022 after massive environmental protests.

If completed, the project could supply 90% of Europe’s current lithium needs and help make the company a leading lithium producer. However, it was caught up in Serbian politics and withered as the market soared and then collapsed.

Reuters said that, speaking on the sidelines of the World Economic Forum in Davos, Vui said he had “a difficult conversation” with representatives of Rio Tinto earlier on Wednesday.

“We are facing the question of whether the company will file a lawsuit against us or not,” Vui told Serbian reporters. “I asked them not to take measures to protect their interests.”

Vui said he had sought Rio’s assurances about environmental standards and said that the next government—expected to be formed by May following December elections—should address the issue.

“(Rio) must offer the cleanest solutions, which could be satisfactory to our people, the highest standards in the world for the nature and the people who will work there,” he said, according to the Reuters report.

Last Thursday, Rio released an environmental plan for Jadar which gave it the all clear.

Rio said studies show that the project is environmentally safe.

The environmental studies were conducted over six-and-a-half years.

"The scientific research shows that the Jadar Project can be developed safely while adhering to the highest domestic and international environmental protection standards," Rio Tinto said.

Jadar is one of the world's largest lithium deposits and could supply enough lithium to power more than one million electric vehicles per year, according to Rio Tinto.

"All known potential risks were identified in the studies, and appropriate mitigation measures were proposed, demonstrating that the project can be implemented responsibly and safely," Prof. Aleksandar Jovovi, who led two of the studies, said.

Approval would put pressure on Rio to decide between Jadar or its Rincon project in Argentina, which is at a more advanced stage with a trial plant under construction.

The Rincon Lithium Project is a large, undeveloped lithium-brine project located in the heart of the 'lithium triangle' in Argentina.

Rio paid $US825 million for this prospect and then committed to building a trial plant, whose cost has trebled thanks to the high inflation and economic instability in Argentina.

Rio said in its March quarterly statement that the 3,000 tonne a year starter battery grade lithium carbonate plant was still on track to start first production from the end of 2024.

The cost has soared to $US350 million from $US140 million in July 2023.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →