Rio Tinto says its massive Jadar lithium-borate project could start supplying the growing lithium market in 2023, as it inked a memorandum of understanding with the Serbian government hoped to “speed up” the project’s approvals process.
The large deposit of jadarite, a new mineral unique to Serbia that contains lithium, was discovered by Rio Tinto in 2004 when it was exploring for borates.
It has since spent about $US90 million slowly advancing the Jadar project towards a final investment decision, expected in 2020 with construction slated to commence the same year.
Under the timeline Rio mapped out for the first time overnight Monday, the project would commence operations in 2023, “assuming that feasibility studies confirm viability and all necessary approvals are obtained”.
The timing would see production from Jadar enter the market after a wave of new supply from Australian lithium miners. But analysts generally forecast demand for lithium-ion batteries to meet or exceed supply early next decade due to the growth of the electric vehicles market and increased adoption of energy storage.
UBS analysts said in June high spot prices for lithium chemicals would ease over the next few years but prices of $10,000 to $12,000 a tonne would be needed from early next decade to incentivise new investment to meet demand.
A pre-feasibility study on Jadar is expected to be completed before the end of the year.
Jadar sits behind other projects in Rio’s development que, including the Oyu Tolgoi copper and gold project in Mongolia and the Silvergrass iron ore project in Western Australia, but it has been touted by the miner as an attractive development option due to its scale and anticipated position in the first quartile of the operating cost curve.
Jadar is also being keenly pursued by the Serbian government. Under the memorandum of understanding signed on Monday, Rio and the government will form joint working groups to progress the project through the study and permitting phases.
Serbian mines and energy minister Aleksandar Antić said he thought the MOU would “speed up the activities related to the process of opening a mine and the beginning of the exploitation of lithium”.
Rio Tinto said its Energy & Minerals chief Bold Baatar visited the project site in Serbia earlier this month.
“Rio Tinto sees Serbia as an attractive investment destination and the Jadar project is an important part of Rio Tinto’s growth portfolio,” Mr Baatar said.
“A project of this magnitude requires time and expertise to design and bring into operation. We can only do this with the support of the Serbian government and local community.”
Rio Tinto has said Jadar could supply at least 10 per cent of global lithium demand.
The project has a 136-million-tonne resource grading 1.86 per cent lithium oxide, slightly larger but lower grade than the largest operating hard rock lithium mine, the Greenbushes operation in Western Australia, according to UBS.
Deutsche Bank and UBS analysts had forecast Jadar would start production in 2023, with UBS noting the “massive” project made Serbia a “major” country to keep an eye on as it entered the lithium market.