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14/12/2024
Mining News

Serbia’s lithium deal with the EU: Economic promises and controversies

On July 19, Serbia and the European Union formalized a strategic partnership on critical raw materials, with German Chancellor Olaf Scholz witnessing the agreement. The partnership centers on Serbia’s lithium reserves, essential for producing batteries for German electric vehicles. The deal is aimed at attracting battery and electric vehicle manufacturers to Serbia, hoping to maximize the benefits from lithium extraction.

However, the project is fraught with controversy on two fronts. Firstly, there are environmental concerns about mining in the Jadar region, where the lithium reserves are located. Despite assurances from Rio Tinto, the mining company leading the project, and both the Serbian government and the EU, skepticism persists about the environmental safety and the ability of Serbian institutions to enforce these standards.

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Secondly, critics argue that the project represents a compromise of EU values for strategic and economic interests. The state of Serbian democracy was scrutinized following the December 2023 elections, with criticism from EU institutions and the German government. The lithium deal now seems to overshadow these concerns, disappointing pro-EU factions within Serbia.

The EU’s reputation in Serbia, already fragile, is unlikely to benefit from this development. Public opinion may further deteriorate, complicating the EU’s goal of preparing Serbia for membership.

Persistent unpopularity of lithium mining

The lithium project has faced significant opposition, highlighted by massive protests in winter 2021/2022 that led to the cancellation of the project. Critics have long feared that the ruling Serbian Progressive Party (SNS) and President Aleksandar Vučić were merely waiting for a more opportune moment to revive the initiative.

In July 2024, the Constitutional Court annulled the 2022 decision, paving the way for the project’s revival. A week later, Serbia signed the Memorandum with the EU in the presence of Chancellor Scholz.

Since the project’s temporary suspension, Rio Tinto has intensified its efforts to sway public opinion, emphasizing economic benefits and environmental safety. President Vučić has championed the project as crucial for Serbia’s economic future. Yet, opposition remains strong, with widespread criticism from politicians, activists, and the public, including recent protests in several cities.

A poll by New Serbian Political Thought (NSPM) in late June and early July revealed that 52.1% of respondents opposed the mine, while 33.7% supported it. Although NSPM’s reliability is questioned, such figures suggest considerable opposition.

Impact on EU perception

The EU’s popularity in Serbia has historically been affected by anti-Western sentiments from the 1990s and Kosovo’s declaration of independence. Although support for EU membership has generally been above 50%, recent polling shows it below that threshold, partly due to dissatisfaction with EU demands for sanctions on Russia.

The EU has attempted to improve its image in Serbia with promotional campaigns, but the lithium project represents a new challenge. Milenković argues that the deal exacerbates grievances about Serbian environmental and political issues, potentially casting the EU as an adversary rather than a partner.

Discontent among pro-EU citizens

The EU faces a dilemma in Serbia: maintaining relations with the government while addressing the concerns of pro-EU citizens. The pro-EU opposition coalition “Serbia Against Violence,” which won 24% of the vote in December 2023, and the liberal association “ProGlas” have all criticized the lithium project. The visit of EU and German officials, following criticism of Serbian electoral practices, has further disillusioned pro-democratic forces.

Vedran Džihić from the Austrian Institute for International Affairs argues that the EU’s focus on the lithium deal undermines its value-based integration process and alienates those advocating for democratic values in Serbia. The project could diminish the EU’s legitimacy among pro-European citizens and might lead to increased repression of dissenting voices.

The enlargement dilemma

The EU’s commitment to enlargement, highlighted in the new Strategic Agenda 2024-2029, contrasts with its cautious approach to Serbia’s integration. Despite speculation that the lithium deal could accelerate Serbia’s EU membership, no concrete steps have been indicated.

Džihić describes the EU’s approach to Western Balkans enlargement as pragmatic and value-neutral. The lithium deal reflects this trend, as Serbia’s commitment to EU membership remains uncertain, and the government’s enthusiasm for meeting accession conditions seems lukewarm.

Minister of Traffic and Infrastructure Goran Vesić’s statement that Serbia “has essentially become an EU member” symbolizes the current stance of the Serbian government—engaging with the EU but avoiding full membership commitments. If neither the EU nor Serbia takes the enlargement process seriously, the significance of the lithium deal and the EU’s reputation will be diminished, leaving pro-European Serbians as the primary losers.

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