AMERICAN EXPERTS: Lithium is an opportunity for the EU and US, but an environmental risk for Serbia!

Mining lithium in Serbia is important for the European Union and the United States as it frees them from dependence on China, while for Serbian citizens it does not bring significant economic benefits and at the same time represents an environmental risk – because, as other examples have shown, the government cannot guarantee compliance with environmental protection laws, according to experts from various fields who spoke at a discussion at the Washington School for Advanced International Studies (SAIS) at Johns Hopkins University.

At the virtual debate on the environmental, economic, social and foreign policy aspects of lithium mining, neither representatives of the Serbian government nor the Rio Tinto company were heard. As the debate moderator, Johns Hopkins lecturer Edward Joseph explained, government representatives did not accept the invitation to participate in the discussion, while the invitation to Rio Tinto representatives was sent late, so they could not attend.

Serbia’s lithium reserves account for about 10% of the total global reserves, but the mining of jadarite (which contains both lithium and boron) in the Loznica area has been causing controversy and protests for years. Under public pressure, the government halted the Rio Tinto project in January 2022, but the Constitutional Court declared that government decision unconstitutional in July of this year, reviving the project. This sparked a new wave of protests.

In the meantime, a Memorandum of Understanding with Germany on critical raw materials was signed, which envisages the entire production chain – from mining lithium in the Jadar valley to producing batteries for electric vehicles. According to earlier announcements, the mine could start operating in 2028 if Rio Tinto meets environmental regulations and obtains the necessary permits.

However, a part of the public insists that the opening of the mine and the deposit of mining waste in an area with agricultural land prone to flooding will mean an ecological disaster. This thesis is supported by Zoran Stevanović, a retired professor at the University of Belgrade, a United Nations consultant, and a geologist.

“The Jadar and Korenita rivers flood the area where the mine and landfill are planned almost every year. And when you look at the position of the mine, you can see that the area is also vulnerable to groundwater pollution. And groundwater in Mačva is a significant resource, it is our largest regional source of drinking water and is much more important for future generations than any mineral,” says Stevanović, one of the participants in the debate at the US SAIS.

Although Rio Tinto has said it has numerous documents on the sustainability of the mine, Stevanović warns that the problem lies in practice, not in paperwork – because there are not enough inspectors on the ground and companies that pollute are not punished.

When the moderator noted that Rio Tinto had said it would “apply European standards” and all Serbian laws in Serbia, Mirko Popović from the Regulatory Institute for Renewable Energy and Environment (RERI) said that these were “fairy tales”. According to him, Serbia is far from European standards, and on the other hand, there is no possibility for someone from outside to come and oversee the implementation of laws in Serbia.

In order for Rio Tinto to start digging, it must first obtain the green light from the Ministry of Environmental Protection, which must approve the environmental impact assessment study. However, Popović says he doesn’t believe the ministry would reject Rio Tinto’s study.

“One German company in Valjevo is still in the process of obtaining approval for an environmental impact assessment study, and then we find out that the facility whose impact is being tested has already been built. Did the Ministry of Environmental Protection stop anything? No.”

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What do the citizens get out of it?

As an argument in favor of opening the Rio Tinto mine, the government cites an economic opportunity for Serbia, especially due to the entire chain – from lithium mining, through processing, to battery production. Rio Tinto estimates the value of the project at $2.4 billion, says they have invested €600,000 so far, and the government announces that tens of thousands of jobs will be created.

Aleksandar Matković, a researcher at the Institute of Economic Sciences and a member of the opposition Green-Left Front, claims the opposite. He says that his analysis shows that the project would bring only 2.6 euros per capita to Serbia.

This economist states that investments in mining have increased in recent years, but the impact on the standard of living of the population is debatable. He points to the example of Bor, where unemployment is still high – despite the operation of the Chinese Zijin, which bought a copper and gold mine.

“If we are already talking about great economic opportunities for Serbia, why then haven’t countries like Congo and South Africa become developed and rich – because mines don’t bring that, nor will they bring it to Serbia,” explains Matković.

On the other hand, to attract foreign direct investment, Serbia offers subsidies to investors – which is why it takes out loans from the IMF and the World Bank, further borrows and increases its deficit, Matković reminded. He also adds that Rio Tinto’s financial calculations of profit are “good PR, not reality”, as the demand for lithium is now lower than projected.

Geopolitical aspect

European and American officials frequently emphasize the importance of lithium mining in Serbia in the context of reducing their countries’ dependence on China, which processes the majority of lithium. However, Aleksandar Matković points out that this argument seems illogical, considering that the largest single shareholder in the Rio Tinto company is the Chinese state-owned company Chinalco, holding an 11% stake. Notably, Chinalco attempted to take control of Rio Tinto in 2009 when it was in debt, but a deal between the two companies was ultimately not reached.

Beyond the narrative of geopolitical competition with China, there is a belief in the West that Rio Tinto’s $2.4 billion investment will distance Serbia from China and Russia, recalls discussion moderator Edward Joseph.

Assistant professor at the Faculty of Political Sciences (FPN) in Belgrade, Milan Krstić, believes that curbing the growing influence of Russia and China will remain a focus of Donald Trump’s new administration, particularly in the fields of energy and raw materials.

The United States and Serbia signed a strategic cooperation agreement in the energy sector a few months ago, marking the first strategic agreement between the two countries ever.

“The U.S. perceives this area as something that can bring Serbia closer to the West. When it comes to the EU, its most important actor, it aims to establish strategic autonomy in the field of raw materials,” said the FPN professor, adding that further developments will depend on the internal situation in Germany and on Trump’s specific policies.

At this moment, Krstić says, Serbia has three options regarding the opening of Rio Tinto’s mine.

“First, to halt the project, at least for now, considering all the challenges. Second, to try to negotiate the project and minimize potential harmful impacts while simultaneously using it as leverage in other foreign policy matters. For instance, gaining greater EU attention on issues regarding Serbs in Kosovo or the dialogue process. The third approach is to use this for the EU, so that the EU overlooks Serbia’s internal issues—erosion of democracy, human rights, and increasing corruption. I fear this third option is the most likely but also the worst for Serbian citizens.”

For years now, citizens have been staging massive protests in several cities, demanding a ban on lithium and boron mining in Serbia—a legal proposal that the parliament rejected.

One of the activists from the local movement “March from the Drina,” actress Bojana Novaković, said the protests are authentic, formed without leaders, and receive no funding from either Russia or the West.

She emphasized that, despite geopolitical pressure from the West and the circumstances prevailing in the EU, “it is important to remember that the local population always has the right to say NO to the mine.”