THE NEWS SERBIA HAS BEEN WAITING FOR: The most reputable Australian outlet reports that Rio Tinto is halting the Jadar project, and the reason is known!

Rio Tinto will stop working on the development of the lithium mine in Serbia, two decades after it first discovered the deposit at that site, writes the Australian Financial Review, noting that the “Jadar” project is expected to become a victim of cost-cutting measures implemented by the mining giant’s new CEO, Simon Trott.

The lithium and borate deposit in the Jadar Valley was discovered by Rio Tinto in 2004, and in 2021 the company announced plans to spend 2.4 billion dollars (3.7 billion) on building the largest lithium mine in Europe. Many within the company considered this proposal one of the favorite projects of former CEO Jakob Stausholm, Financial Review recalls.

However, community opposition to the mine in Serbia was strong. Rio Tinto temporarily lost its license for the project between January 2022 and July 2024, and development was postponed because of it.

Rio Tinto has spent nearly 10.7 billion dollars purchasing the already established and profitable business Arcadium Lithium earlier this year, as well as some earlier lithium deposits in Chile. As competition for capital grows within Rio Tinto’s lithium division, and as Trott looks for ways to reduce costs, Jadar has been placed “on hold.” A memorandum sent to staff states that the company is “not in a position to maintain the same level of spending and resource allocation” for Jadar.

Jadar has been placed under “care and maintenance” — a term in the mining industry meaning that the asset is put into a dormant state, but ownership is retained.

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Many jobs will be cut

The decision means that Rio Tinto’s staff will stop conducting environmental, cultural-historical, and geological research intended for the project’s future development, the Australian paper reports. Rio Tinto, it is recalled, currently has around 100 employees whose work is tied to this project, and many positions will be eliminated. Another 120 external contractors had been working on the “Jadar” project.

Trott has also reduced the size of Rio Tinto’s executive board, and is expected to lay off even more senior leadership as he introduces a new structure that shifts power further away from the group’s London headquarters.

Trott indicated last month that Rio Tinto’s lithium ambitions will not be developed without reviewing projects with low returns and unreliable outcomes.

“One of the important things is that we have options, and that we have a lot of optional flexibility built into the system, so that, if the return is appropriate, we can move forward with those projects and advance the best among them,” he told investors at an event organized by Goldman Sachs in London last month. He expects Jadar to remain on Rio Tinto’s list of future strategic reserves after his first major strategic presentation since taking office on December 4.

Barclays analyst Amos Fletcher said the company’s acquisition grew by 26 percent between December 2021 and 2024, and that it cost Rio Tinto 7.1 billion dollars more than originally announced. He expects Trott to focus on cutting costs, adding that the company could save up to a billion dollars.