Economic Planet | Serbia cross swords with Australia

Many countries are scrambling to attract investment in battery materials for electric cars. Not Serbia, which just kicked out Rio Tinto and its lithium mine megaproject.

Helene Baril
The Press

The native country of Novak Djokovic has revoked the permits already granted to the company which wants to invest 2.4 billion US to operate the largest lithium mine in Europe.

“All permits and authorizations have been cancelled,” Prime Minister Ana Brnabić said last Thursday, as reported by Reuters. “It’s the end of the project. »

This is a major setback for the mining giant, which aims to become one of the largest lithium producers in the world. Rio Tinto has already invested US$450 million in the project known as Jadar.

Everything indicates that the decision of the Serbian government is a surprise for the company. At the beginning of last week, just before being sent off, the company announced its decision to postpone the start of production of the mine for a year, while touting its potential.

The Serbian government justified its decision by the strong opposition of the population to the mining project because of its environmental impact. Popular discontent and the impending elections are said to have prompted the government to withdraw its support for Rio Tinto.

Officially, the Serbian government’s decision has nothing to do with Australia’s expulsion of its national tennis champion for not having been vaccinated, which prevented him from participating – and probably winning. – one of the four Grand Slam tournaments of 2022.

The giant Rio Tinto has two headquarters, in London and Melbourne, Australia, but the company is mainly active in the Australian mining sector, where it produces iron, bauxite and aluminium.

Officially, therefore, the decision of the Serbian government to withdraw its support for the Rio Tinto project has nothing to do with the very public humiliation suffered by Novak Djokovic in Melbourne a few days ago.

But some signs indicate that there could still be a link between the two events.

The Serbian government was publicly outraged at how the Australian government had “humiliated” its champion. And above all, Djokovic had himself supported the opponents of the lithium mine project.

On Instagram, where he has more than 10 million fans, the player posted a photo of the protesters with a comment on the importance of clean air, water and food for health…

An exploding market

The desire of a mining giant like Rio Tinto to establish itself in the lithium market speaks volumes about the potential of this metal, which is used in the manufacture of batteries for electric vehicles.

Driven by the popularity of electric vehicles, lithium is in high demand and its price is rising sharply in the markets. There are several categories and several types of markets for lithium, which is only just beginning to be traded on exchanges. Since May, the value of futures contracts has risen 171%, to US$38 per kilo, according to data from Refinitiv.

In China, the main market for lithium, the metal is trading at a record high of 348,500 yuan a ton, according to TradingEconomics, or more than US$50,000. This is a 400% increase over the past year.

Demand for the lightest of all metals is expected to grow by 25% to 35% per year over the next 10 years, according to Rio Tinto projections.

With its Jadar project in Serbia, Rio Tinto expected to produce 58,000 tonnes of battery-grade lithium annually over the estimated 40-year mine life.

Nemaska ​​Lithium, whose original mine and processing plant project failed miserably, aimed to produce 37,000 tonnes per year of battery-grade lithium.

Everyone wants lithium, but few countries can or want to host the mines that produce it. Quebec would no doubt have welcomed a $2.4 billion investment from a company like Rio Tinto in battery materials.

Serbia, meanwhile, has decided to abandon the project that would have allowed it to become the largest lithium producer in Europe. It may be because of Djoko, but it may also be because the government wants to be re-elected.