A bidding war is underway. After years of debate about the environmental harm of the Jadar project, the question of the economic viability of this potential investment by Rio Tinto has finally been raised in public in Serbia.
Businessman Zoran Drakulić and several respected economics professors have given their verdict, which Rio Tinto immediately responded to. A senior US State Department official unexpectedly joined the debate with data that he himself admitted needed to be verified.
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Just one zero separates two financial analyses. Drakulić, Mijatović, Popović, and Šoškić claim that each citizen of Serbia is entitled to 2.6 euros annually from lithium or, if multiplied by the number of inhabitants, a total of 18.2 million euros. Rio Tinto says that this study is wrong and that according to their calculations, Serbia is entitled to ten times more each year.
“The direct benefit will be 180 million euros per year in taxes,” says Chad Bluitt, Executive Director of the Jadar Project.
Rio Tinto, however, calculates these revenues at a price of $15,600 per ton of lithium carbonate, which its experts expect in the coming years. The current price is $10,700 on the Shanghai Metals Market.
“Yesterday, I saw the US Undersecretary for the Environment, who is now dealing with our GDP. Watch out, he’s dealing with our economy? And he’s telling us that if this project goes ahead, Serbia will flourish again,” says Aleksandar Jovanović Ćuta.
The US Undersecretary for the Environment expects Serbia to benefit much more because, in addition to simple mining, he hopes for other lithium-related projects in Serbia.
“As for your question… For one to three percent, I have to check the source. But I saw that it could be more than 4%. But we will provide you with that information,” Jose Fernandes said yesterday.
Mr. Fernandes couldn’t remember, but we found who his source was for the optimistic forecast of Serbian GDP growth.
“Lithium mining and processing is an increase in GDP of 0.7 billion euros or one percent of GDP. Cathode production and lithium processing – that’s 2.06 percent of GDP. Mining and processing plus battery production, that’s four percent of GDP,” said Aleksandar Vučić in July of this year.
The Serbian state has never stated from which study President Vučić read this and which institution gave these forecasts. So for now, we have – an independent study by Zoran Drakulić and professors, a study by the interested party – Rio Tinto, and a forecast by the US Undersecretary of State whose source is the President of Serbia.
“First of all, I’m interested in why Mr. Fernandes is talking about the Rio Tinto project. First of all, Rio Tinto is not an American company. So I don’t know why they care so much about us. Maybe we should take care of ourselves and they should worry less about us,” says columnist Bogdan Petrović.
The columnist for Nova Ekonomija does not deny that Fernandes’ estimate is realistic, but says that a major upgrade of the mining itself is necessary for that.
“Since it is mentioned that a million cars could be produced from the lithium in Jadar… If Serbia got two or three car factories and a battery factory, it would be easy for GDP growth to be those four percent. But we have no guarantees for that,” Petrović says.
Hungary has guarantees, which has bet, not on Germany, but on China, and already has contracts for two electric car factories and one lithium battery factory, and it doesn’t have a mine.
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Source: N1
Photo: Printscreen YouTube / NOVA S