Rio Tinto says 60 Jadar mines wouldn’t fill looming lithium gap
Rio Tinto joined the rising chorus of companies and analysts warning of an imminent and “significant” supply gap for lithium, as demand for the metal used in electric vehicles (EV) and green technologies continues to soar.
In a presentation to investors, Rio Tinto’s head of economics Vivek Tulpule said EV sales are on track to hit up to 55% of the world’s total light vehicles sales as early as 2030, reaching about 65 million units.
This means manufacturers would need about three million tonnes of lithium, compared with the roughly 350,000 tonnes they consume today, Tulpule noted.
Existing operations and projects combined, however, are slated to contribute one million tonnes of lithium, he said.
Rio Tinto estimates that committed supply and capacity expansions will contribute about 15% to demand growth over the 2020-2050 period. The remaining 85% would need to come from new projects.
“Filling the supply gap will require over 60 Jadar projects,” he warned.
Jadar, located in western Serbia, would produce enough lithium to power one million electric vehicles, Rio has said. It will also produce boric acid, used in ceramics and batteries, and sodium sulphate, used in detergents.
Mine construction is expected to begin early next year, subject to environmental approvals, with the first production in 2026. Following ramp up to full production in 2029, the Jadar mine will produce 58,000 tonnes of lithium carbonate, 160,000 tonnes of boric acid and 255,000 tonnes of sodium sulphate a year.
The company anticipates that recycling will take on a bigger role in the coming years but will only begin to make a relevant contribution after 2040 as vehicles that are currently being purchased are scrapped.
Rio Tinto believes lithium-ion batteries will be the preferred storage technology for EVs, as well as important contributors to the setting of a renewable grid.
“Expected future development of solid-state batteries with improved energy density and safety performance could provide further upside, by increasing lithium intensity per kilowatt by over 30%,” Tulpule said.
Over the past five years, the miner has tried to expand its footprint in the battery market. In 2018, Rio reportedly attempted to buy a $5B stake in Chile’s Chemical and Mining Society (SQM), the world’s second largest lithium producer.
In April this year, it kicked off lithium production from waste rock at a demonstration plant located at a borates mine it controls in California.
Rio invested $10 million to build the pilot plant that will be able to produce 10 tonnes a year of lithium-carbonate. By the end of the year, and based on the trial’s results, it will decide whether or not to spend a further $50 million in an industrial-scale plant with annual capacity of 5,000 tonnes a year — enough for around 15,000 Tesla Model S batteries.
The projected production would be roughly the same as the capacity of Albemarle ’s Silver Peak mine in Nevada, which is currently the only lithium-carbonate producing asset in the country, according to the US Geological Survey.
Rio Tinto commits large funding for lithium project in Serbia
Jadar will be one of the largest industrial investments in Serbia, contributing 1% directly and 4% indirectly to GDP, with many Serbian suppliers involved in the construction of the mine. Rio Tinto is committed to help develop local businesses so that they can support the operation over the coming decades. It will also be a significant employer, creating 2,100 jobs during construction and 1,000 mining and processing jobs once in production.
Rio Tinto has committed $2.4 billion to this Jadar lithium-borates project. The project remains subject to receiving all relevant approvals, permits and licences and ongoing engagement with local communities, the Government of Serbia and civil society.
The Jadar project would scale up Rio Tinto’s exposure to battery materials, and demonstrate the company’s commitment to investing capital in a disciplined manner to further strengthen its portfolio for the global energy transition.
Jadar will produce battery-grade lithium carbonate, a critical mineral used in large scale batteries for electric vehicles and storing renewable energy, and position Rio Tinto as the largest source of lithium supply in Europe for at least the next 15 years. In addition, Jadar will produce borates, which are used in solar panels and wind turbines.
Rio Tinto Chief Executive Jakob Stausholm said “We have great confidence in the Jadar project and are ready to invest, subject to approvals. Serbia and Rio Tinto will be well-positioned to capture the opportunity offered by rising demand for lithium, driven by the global energy transition and the project will strengthen our offering, particularly to the European market. It could supply enough lithium to power over one million electric vehicles per year1.
“The Jadar deposit and its unique mineral, Jadarite, discovered by Rio Tinto geologists in 2004 contains high-grade mineralisation of boron and lithium, supporting a long-life operation in the first quartile of the cost curve for both products.”
“We are committed to upholding the highest environmental standards and building sustainable futures for the communities where we operate. We recognise that in progressing this project, we must listen to and respect the views of all stakeholders.”
Rio Tinto continues to work with a wide group of local and global experts across all aspects of the environmental, social and governance impacts and has done so for many years. For example, to date we have finalised 12 environmental studies and more than 23,000 biological, physical and chemical analyses of air and water. This consultation is ongoing and will continue to inform our final submissions for approval.
The Jadar development will include an underground mine with associated infrastructure and equipment, including electric haul trucks, as well as a beneficiation chemical processing plant. To minimise the impact to communities, it will be built to the highest environmental standards, including utilising dry stacking of tailings. This innovative method allows the dry tailings to be progressively reclaimed with vegetation and soil with no need for a tailings dam. Water management will be state of the art with a dedicated facility resulting in approximately 70% of raw water coming from recycled sources or treated mine water.
First saleable production is expected in 2026 at a time of strong market fundamentals with lithium demand forecast to grow 25-35% per annum over the next decade. Following ramp up to full production in 2029, the mine will produce ~58,000 tonnes of lithium carbonate, 160,000 tonnes of boric acid (B2O3 units) and 255,000 tonnes of sodium sulphate2 annually, making Rio Tinto one of the top ten lithium producers in the world. Based on this annual production of lithium carbonate, Rio Tinto aims to produce 2.3 million tonnes of lithium carbonate over the expected 40-year life of mine.
The next steps for the project are seeking an exploitation licence and receipt of regulatory approvals. This includes approval of the environmental impact assessment (EIA) studies, which will shortly be made available to the public for comment. The EIA is required for the commencement of works, with construction targeted to start in 2022.
1 Assuming 60kWh battery size
2 These production targets were previously reported in a release to the Australian Securities Exchange (ASX) dated 10 December 2020, “Rio Tinto declares maiden Ore Reserve at Jadar” (for battery-grade lithium carbonate it was 55,000 tonnes). All material assumptions underpinning the production targets continue to apply and have not materially changed.
Serbia mulls putting Rio’s Jadar approval to community
Jadar, discovered by Rio Tinto geologists in 2004, is one of the largest greenfield lithium projects currently in development. It has the potential to produce about 55,000 tonnes of battery grade lithium carbonate. In 2020, Rio approved an almost $200 million investment to complete the final phase of a feasibility study that is expected to be finalized this year, with a final decision to follow. Both products expected from the project – lithium and borates – play important roles in a more energy-efficient future. The first is widely regarded as “key” ingredient in the making of the batteries that power electric vehicles (EVs) and high tech devices. Borates, in turn, are used in insulation in fibreglass and wind turbines.
Rio Tinto has said it plans to start production in 2023, assuming that feasibility studies confirm Jadar’s viability and all necessary approvals are obtained.
Speaking on local TV, Serbia’s President, Aleksandar Vucic said the government fully supports the project, which could become Serbia’s second largest export earner once developed. He also said his administration won’t let it happen if it doesn’t get the people’s approval first. Vucic, may seek voter approval for Rio Tinto’s Jadar lithium project near the city of Loznica, in western Serbia, as community opposition grows.
Jadar has been facing local opposition due to heritage issues. Its footprint covers the area around Paulje, a Bronze Age archaeological site, as well as several classified natural monuments.
“This part of Jadar and Radjevina has been inhabited for more than 8,000 years and no one will drive us away,” activist Marija Alimpić told local media. “We give our vote to nature and there is no referendum, nor profit that is above nature,” she said.
Community group Ne Damo Jadar, which comprises 350 local property owners, says the planned underground lithium mine would force people out of the area and carries potential impacts to forests and water. Ne Damo Jadar says Rio’s proposal covers 22 villages and mining is to occur under two riverbeds, both of which are prone to flooding.
“We own land with archaeological remains dating back to the Bronze Age and the area also contains classified natural monuments,” Ne Damo Jadar member Marijana Petkovic, said last month at a rally in front of Rio Tinto’s offices in Serbia.
“How can Rio Tinto’s CEO be serious about making protecting cultural heritage a centre-issue, when at the same time in Serbia the company wants to develop a mine that will swallow-up natural monuments and heritage dating back to the 14th century BC?” Petkovic said.
Coordinated protests against the proposed mine were held in April in London, at the time of Rio’s annual general meeting, as well as at the miner’s offices in Belgrade and Washington DC.
Jadar mine would supply mainly the European market, one of the world’s largest growing EV markets. In only three years, British car makers will have to source local electric car batteries as set by the Brexit free trade deal inked in 2020. Under the agreement, all European trade in cars and parts will continue to be free of tariffs or quotas after the Brexit transition period ended on December 31, as long as they contain enough content from either UK or EU factories. Batteries will at first be allowed to have up to 70% of materials from countries outside the EU. From 2024 onwards, that requirement will tighten to 50%. The EU is currently constructing large-scale battery cell factories. European Commission Vice President Maros Sefcovic has said that by 2025, the planned facilities would produce cells to power at last six million electric vehicles. In September 2019, the UK government launched the Faraday Battery Challenge as part of the Industrial Strategy Challenge Fund (ISCF), to spur research and innovation. Li4UK (Securing a Domestic Lithium Supply Chain for the UK) was one of the projects to secure financial backing from the pioneering program, soon to open a fifth round.
One of the world’s most important lithium deposits is in Serbia
Representatives of Rio Tinto spoke for Telegraf Business about how they are working on the development of technology for jadarite processing and the application of modern mining technological solutions;
A large amount of work is ahead of the Jadar project team to ensure that a greenfield mining and metallurgy project of this size develops to its operational phase in a safe and sustainable way, in environmental and economic terms.
Lithium-ion batteries have become a top topic in the world, but also in Serbia
When we look at all aspects of the use of lithium-ion batteries, from mobile phones and computers, to electric vehicles, we can say that these batteries have revolutionized the storage and use of electricity and that their importance is huge.
Of all the known metals, lithium is the lightest, ie with the lowest density, which explains its advantage in battery design.
The interlocutors of the Telegraph also remind that in 2019, the Nobel Prize for Chemistry was awarded to a group of scientists precisely for the development of lithium-ion batteries. One of the award winners then said that lithium-ion batteries “enabled the mobile world”, and the Nobel Committee itself said that these batteries are used globally to charge portable electronic devices that we use for communication, work, learning, listening to music and searching for knowledge.
“On the other hand, the progress of society, increasing energy use, industrial plants and technological progress have led to the setting of new priorities at the global level, and one of these priorities is the green agenda, which implies an increasing need to find green solutions. The agenda also includes the adoption of directives related to the reduction of permitted levels of carbon dioxide emissions in the EU, and the solution for this is electric and hybrid vehicles in which lithium plays a key role, given that such vehicles use lithium-ion batteries as propulsion.
Due to all this, lithium is one of the strategic, and in the future the most sought after, raw materials in the world.
Can you explain the process of obtaining the battery?
“What is important to mention is that our final product – lithium carbonate – will be of the quality needed for the production of batteries, so there will be no need for additional processing.
The next step in the production of batteries takes place in specialized plants for the production of Cathodic active material (CAM), where lithium carbonate is only one of the raw materials, along with nickel, cobalt, manganese, and others. At the end of the production cycle, in the battery factory, in addition to the cathode active material, other components are needed for production – anodes, separators and electrolytes.
In that sense, how important is the lithium deposit in Serbia, and what is your plan when it comes to the mine, but also the exploitation?
“One of the most important lithium deposits in the world is located in Serbia, in the valley of Jadar, and its certified reserves amount to 158 million tons. When we talk about further plans, we are now in the phase of preparation for the construction of one of the most technically modern underground mines in the world with a modern concentrate processing plant and a solution for sustainable industrial waste management. This project is extremely specific and very complex because it involves a new mineral, and thus the development of new processing technology, and complex engineering solutions necessary for the sustainable and safe development of this greenfield mining and technological complex. Precisely because of the strategic importance of this deposit, we are working hard to keep up with the deadlines for the project. It is planned that the technical documentation and the Impact Assessment Studies will be completed by the end of this year, after which we will apply for the necessary permits for construction and operation.”
It is planned that the works on the construction of the mine itself will begin in 2022 and last for about four years.
How many people would it employ? Can you talk about some occupations that you will need?
During the construction phase, the Jadar project could employ more than 2,000 workers. During the exploitation phase, between 650 and 700 permanent highly qualified jobs will be opened for the mine and the factory plant, and it is estimated that there are about 1,500 indirect jobs.
About 2/3 of the jobs will be the jobs of the operator and maintainer. The jobs of the operator will be highly qualified as they will manage complex mining equipment in the mine or a highly automated processing plant. Experts in process engineering, metallurgy, electrical engineering, mechanical engineering, automation, geotechnics, hydrology, geology and IT are just some of the staff we will need.”
How do you view the competition? It is known that more and more countries are interested in digging lithium? Recently, lithium mining was announced on the other side of the Drina.
Every mining project is preceded by detailed market research, and modeling of future supply and demand, on the basis of which investment decisions are made. Rio Tinto has experience in project planning of this, as well as significantly higher investment value, and its economic team assisting in strategic decision making. We are confident that our understanding of the market, the high quality of our product, as well as the resources that the company will make available to this project, will contribute to a competitive positioning in the market. On the other hand, a larger number of lithium suppliers will at the same time encourage the automotive industry to plan a faster and more aggressive transition to electric vehicles.
The first meeting of the working group of the Jadar project with the local population was held recently in Loznica, in order to acquaint the citizens with the realization of the project, but also the impact on the environment, how did it go, what are the conclusions?
Open communication with the locals is very important for us, because the success of such a large project requires support and cooperation with the local community. The participants of this meeting discussed topics of most interest to citizens, namely the purchase of land – what landowners and movable and immovable property can be expected from the company, which includes a support program for moving households, the impact of the project on the environment – what the company does to protect the environment, the impact on rivers, agricultural land, air, but also the landfill – the manner of disposal and the location of the landfill, but all other important issues and aspects of the Jadar project.
The first meeting went well and we are already preparing for the next one, considering that the dynamics of these meetings has been determined once a month.
Another model of communication with citizens is the practice of organizing open doors in the Info Centers in Loznica and Brezjak. So far, 21 such events have been organized on various topics, from environmental protection to property and legal relations, and the last one was related to the Study on the assessment of the impact of the Jadar project on the environment.
What are the citizens of the village around Loznica most interested in?
The topic that interests the locals the most is the process of land acquisition, which is completely natural and understandable. The issue of land acquisition is sensitive for landowners, and for that very reason this process is realized in a transparent, careful and fair way. We are in constant contact with the locals and landowners, the purchase process itself is carried out in accordance with the laws of the Republic of Serbia and the best world practice, the principles of which have been determined by the International Finance Corporation.
Our goal is for both parties to be satisfied at the end of the purchase process, and the company provides an additional intangible support program that is completely free and provides locals with property legal support in the process of buying new land, advice on resuming agricultural activities, starting a new business and planning finances.
The topic that is also of interest to the locals is the protection of the environment, and the impact of the project on the environment, and that is why we organize monthly working group meetings and “open doors” to provide all interested citizens with first-hand answers and doubts.
How realistic is the lithium battery factory in Serbia?
The decision on one such project is solely up to the investor. The investor in the battery factory before the decision analyzes the proximity of electric vehicle factories, availability of raw materials, as well as all other typical preconditions such as availability of labor, infrastructure and financial incentives.
We believe that the positive investment decision for the Jadar project will help the local development of the battery industry, not only in terms of providing raw materials, but also as a confirmation that Serbia is a good investment destination. We are also working closely with the Serbian Government to make our knowledge of the battery industry available to attract potential investors from the sector.
Can lithium be called the “new gold”?
Whether it is new gold or not, it is difficult to say. However, what is certain is that lithium remains a key metal for further progress of humanity, and that the Jadar project represents a strategic development opportunity for Serbia, with direct and indirect economic benefits, with the possibility of stimulation other related industries in the green economy development chain.
The line ministry has submitted a request for an increase in ore rent, how do you view that?
The issue of ore rent is important for all mining companies, not only in Serbia, but all over the world. This is a topic that we are closely following, in connection with which we want to cooperate with the Government of Serbia. We strive to be a true partner of the state.
Also, let us deal with this topic in a more comprehensive way and explain the issue of ore rent both in our country and in the world. Ore rents are calculated in the world according to various methodologies, some of which are extremely complex.
Simply put, if we look at metal raw materials, for example copper, on all continents summarized for all calculation methodologies, the ore rent does not exceed 5% on average.
Examples from our neighborhood are often wrongly cited, specifically Hungary and Romania with an ore rent of allegedly 12%, as well as Slovenia with an ore rent of 18%. Romania actually has an ore rent of 5%, Hungary 2%, Macedonia 2%, Turkey 3%. The situation is similar in the world.
In countries where ore rent is higher – say up to 10%, it is typically a calculation based on profit, not income, with a progressive scale (for example, Chile), and with more deductions for large investors (Canada), which leads to similar or mostly lower final effective taxes compared to Serbia.
In Slovenia, on the other hand, after 500 years of uninterrupted exploitation, not a single exploitable metal resource remains, so today they do not have a single metal mine – nor an ore rent of 18% for metal raw materials.
You work a lot on the green agenda, tell us more about it.
In the 21st century, every mining and industrial project focuses primarily on environmental protection, and the green agenda is one of the pillars of our company as well. During 2018, Rio Tinto made a strategic decision to stop coal mining, moving away from that as a way of providing the fossil fuel market as an energy source.
We believe that a future with low carbon emissions is possible, and therefore we want to actively contribute to such a future through responsible business. We operate in the field of exploitation and processing of ores and metals that play an important role in the positive impact on climate change and the environment with reduced carbon dioxide emissions that we strive for.
The Jadar project has a key role to play in achieving this goal. We are also focused on reducing carbon dioxide emissions in our business, with short-term reduction goals but also the ambition to reach zero emissions by 2050.
For the Jadar project, we envisage the supply of exclusively certified green energy, ie. energy with an associated green guarantee of origin.
Source: Telegraf Business
High value of Serbian mineral reserves
Serbian Minister of Mining and Energy, Zorana Mihajlovic pointed out that jadarite is the only mineral in the world and added that the technology with which they will be excavated will also be unique and that the estimated value of mineral reserves in Serbia is higher than 200 billion euros and that is a huge wealth that will be taken into account. She emphasized that no contract with Rio Tinto will be signed until all the necessary environmental impact studies have been conducted and until everyone has an insight into it.
– Serbia will not do anything that will endanger the environment, whether it is lithium, which is an ore of the 21st century or something else. Only when we know that lithium can be produced in a sustainable way with environmental protection, why not think about the lithium battery factory and electric cars, where growth will take place everywhere in Europe – the Ministry announced.
– We should be aware of what research law means. No one has the right to enter the plot until the owner allows it. The company must meet a number of criteria – to have a project and the consent of several institutions. Those exploratory wells are 10-15 cm in diameter, no craters – the minister explained.
She says that there is a lot of aggression, fanaticism and untruths uttered by some environmentalists in Serbia, and adds that it is important to use the facts, instead of collecting points on half-information and intimidation of citizens.
The Minister pointed out that it is up to the state to create laws and to have a good inspection, and that this is an important year for the energy sector.
– We did not pass four new laws by chance. We are required to make a good energy policy in the time ahead, to be energy and environmentally safe, for citizens to have enough electricity that we will increasingly produce from renewable sources – hydro, gas and solar power plants, and gradually in the decades ahead, we are reducing and closing thermal power plants – the Minister concluded.
Lithium mining preparations in Serbia – activists oppose
At the centre of the controversy is the Anglo-Australian mining company Rio Tinto, which discovered a new mineral — jadarite — in the eponymous valley of the river Jadar, a tributary of the Drina, in 2004. It was quite a find: jadarite contains both lithium and boron, two highly valuable elements for a variety of industries. It is estimated that there are 200 million tons of the lithium borate ore in Jadar Valley, which would make it one of the world’s largest lithium deposits, supplying 10 per cent of global demand.
Residents of the Serbian city of Loznica have been joined by environmentalists in sounding the alarm over plans for a lithium mine close to the city, near the border with Bosnia and Herzegovina.
The mine is due to become operational by 2026, but campaigners have highlighted a lack of environmental impact studies and the possible negative effects of ore exploitation on their communities. Possible leaks of tailing ponds, contamination of soil, and disturbances in underground water flows are just some of the potential risks cited.
Lithium is becoming increasingly important as it is one of the main components of batteries used in electric cars. As economies around the world attempt to cut down their use of fossil fuels, electric vehicles are being hailed by many as a way to cut down on harmful CO2 emissions.
Rio Tinto is therefore eager to begin mining. The firm currently plans to start construction of the mine next year.
However, since the project was announced in 2017, critics have pointed to the mine’s possible negative impact on the environment, concerns that have been compounded by Rio Tinto’s somewhat patchy track record on environmental issues.
Most recently, in April 2020, the firm came under fire over the health problems being faced by residents of Bougainville in Papua New Guinea, which it has been alleged have been caused by waste from a copper and gold mine the firm abandoned 20 years ago.
“It’s a long list of dangers that Western Serbia and Eastern Bosnia and Herzegovina face due to the opening of this mine,” says Miroslav Mijatović, the president of the Podrinje Anti Corruption Team (PAKT), an organisation that has been one of the loudest critics of Rio Tinto and its plans for lithium exploitation
He adds that one of the main issues is the expected lifespan of the mine: this has not yet been set, but is expected to be around 60 years.
“In that case the tailings would take up even more space, it’s estimated that the company would leave a minimum of 90 tonnes of tailings that would go through ‘heavy’ chemical processing,” Mr Mjatović says.
Tailings are what’s left over once the valuable part of the ore is separated from the rest. Tailings are known to have the potential to damage the environment by releasing toxic metals and endangering wildlife.
Another issue, as Mr Mijatović explains, is that the exploration process has already disturbed underground waters, with saltwater already appearing.
“That means that in addition to the ore, saltwater will be extracted from the mine, some 942,000 tonnes a year, or around 2,800 tonnes per day which contain around 30 grams of salt per litre,” Mr Mijatović tells Emerging Europe.
“This is a problem because experts are saying it will be impossible to avoid erosion due to the pumping out of saltwater because this water is found in the rock pores.”
According to professor Dragana Đorđević, head of the Centre of Excellence in Environmental Chemistry and Engineering, the main problem caused by the mine will be the permanent destruction of fertile soil that can never again be used for agriculture.
“Along with the ore, toxic elements will be extracted from the ground too, which together with the tailings will be stored topside,” she says.
Additionally, some of those toxic elements will be changed chemically into forms that are more toxic than those found in the ore.
Professor Đorđević says that the planned extraction and ore purification technology means using around a thousand tonnes of sulphuric acid per day, along with high quantities of water necessary to wash out the sediment.
“Because of this, this type of exploitation carries a high every day risk to the environment including all its segments — earth, water, air, and the biota [plant and wildlife], as well as serious damage to the health of the people who will continue to live near the mine,” she says.
Adding to the risk of contamination are floods, to which the region is prone. Flooding is expected to happen more often due to climate change. Professor Đorđević points to a tailing leakage that occurred in 2014 at the Stolice mine, also in the region. Forty per cent of the flood damage then was related to the tailings, the quantity of which was around a hundred times less than the Jadar mine is expected to generate.
Professor Đorđević is clear when it comes to the mine — it’s simply not worth it.
Environmental time bomb
“Large quantities of tailings will be an eco-chemical time bomb, which under the influence of precipitation, especially with acid rain, will wash out and spread toxins to fertile soil and water. It cannot be in the interest of Serbia,” she says. “Saving undamaged and and unpolluted waters is worth much more than this type of mine.”
Water supply in Serbia is already an issue, with many experts pointing out that further mining projects could exacerbate the problem. According to them, the planned lithium mine has implications for drinking water supplies too.
“Due to intensive oil exploitation in Banat [a region in northern Serbia] that has caused serious pollution of underground water, a good part of Vojvodina is slowly running out of drinking water. We could eventually see Vojvodina, Mačva, and even Belgrade face serious water supply issues,” Professor Đorđević explains.
While public opinion in the region is very much against the mine, and experts have warned of the potential risks, representatives of Rio Tinto have stressed that they do take the environment seriously. They have said it’s “not true” that the rivers Jadar, Drina, and Sava will be polluted and that the company will invest more than 100 million US dollars into protecting the environment.
According to a statement the company made following a protest in Loznica against the mine on April 9, the highest standards of environmental protection will be observed and enacted in line with regulations in Serbia and the EU.
But activists and experts are not convinced.
“It’s fruitless to speak of ecological standards when there is total devastation of fertile and forested land planned, the destruction of animal husbandry, beekeeping and other activities that the population of the area lives on,” Professor Đorđević says.
Regardless, the Serbian government recently approved plans for a geographical survey to assess the potential for further lithium exploitation some three hours eastwards, near the city of Požega.
Just as in Loznica, local residents protested against the decision. On April 17, demonstrators said that there are no conditions under which they would accept Rio Tinto coming to their region.
“It’s best that the survey doesn’t happen. The locals are ready to prevent it, and they are supported by people from the surrounding cities,” says the Initiative for Požega, an activist group.
“Based on the available data about the way in which the initial work and exploitation will be conducted we have come to the conclusion that by realising this project the quality of soil and air would be disturbed as well as the biodiversity of the area.”
How much lithium is there?
Given the large amount of money at play, as demand for lithium is expected to grow, the Serbian government has made the mining of lithium one of its priorities. But how much lithium is there actually at the Jadar site? Not everyone agrees on the 10 per cent of global supply figure.
“According to data from scientific literature, the supply is significantly lower and some published data states that the site contains around 1.4 per cent or even less of the world’s supply of lithium,” says Professor Đorđević.
Serbian President Aleksandar Vučić stated earlier this year that he’s “dying of laughter” over the protests against jadarite, noting that Serbia doesn’t have a sea or other natural wealth that could bring it millions of euros in revenue.
“They are protesting in Western Serbia over Rio Tinto and they say a catastrophe will happen. There will be no catastrophe there,” Mr Vučić told the Happy TV station.
But it’s not just an ecological catastrophe that worries some people. Exactly how much Serbia will profit has also been called into question. Mining royalties in Serbia are relatively low, at around three to seven per cent. There are indications this might change, but for now it’s unclear how big the increase it will be and if it will even apply to Rio Tinto and existing contracts already in place.
Mr Vučić said in January this year that the mining royalty for the project will be five per cent and added that no “drilling” will be allowed until a battery factory is made for electric cars.
“A great, fantastic factory so that the entire region will blossom,” Mr Vučić added.
With the government clearly behind the project, Serbia’s lithium mines look set to become a reality: for better or for worse.
Rio Tinto should pay a higher ore rent in Serbia
Estimates show that Rio Tinto for a period of ten years of exploitation of jadarite ore, if we take into account the prices of three products obtained from it, lithium carbonate, boric acid and sodium sulfate, would earn about four billion euros. In case that the research of Rio Tinto on the profitability of the exploitation of jadarite in the vicinity of Loznica gives positive results, that mining company should be charged a higher ore rent than the valid one in Serbia, which is otherwise very low, according to the domestic public.
Some experts in that field believe that in that case, Australians would not be interested in investing, due to significantly lower profits, and that they have already secured with the authorities in Serbia that the price of ore rent does not increase. Considering that the ore rent for this type of ore that would be exploited in the vicinity of Loznica is five percent, Serbia would collect around 300 million euros in the same period. In the opinion of the expert public, this is an unacceptably low profit, which is why the ore rent should be multiplied.
Privatization advisor Branko Pavlovic says that in concrete but also in all other cases of exploitation of Serbian resources by the company, the principle of the so-called “domicile rent” should be introduced.
– In practice, that means that as much as Australia takes money from foreign companies that have mines in that country, so should the ore rent for an Australian company in Serbia. That ore rent is many times higher than it is in our country. So, if there was justice, the ore rent in Serbia would be much higher for “Rio Tinto” but also for all other foreign companies than it is now – our interlocutor states.
– It is hard to believe that such a large mining company has not already protected itself in the phase of exploration works, ie that it has not already been agreed with the authorities in Serbia that the ore rent is not increased in order to extract as much profit as possible. Otherwise, Serbia should not allow foreign companies to exploit its ore resources at all. What should be done is to engage domestic capacities that would explore the possibility of exploitation not only of jadarite but also of other ores in Serbia. We have experts in that field, what would be necessary is for the state to invest in the procurement of adequate equipment for those jobs. Even if the research proves to be a failed state, it would also benefit from that, because it would have the capacity to deal with that business and make a profit – Pavlovic states.
Considering that lithium is used for the production of batteries for electric cars, Pavlovic thinks that the idea of starting a factory in the vicinity of Loznica that would deal with that is good.
– For that, it is necessary for Serbia to make a joint investment with a foreign company that would provide the necessary technology for the operation of that factory, which would enable its profitability – says Pavlovic.
Economist Milan R. Kovacevic also believes that the ore rent dor Rio Tinto should increase in case it starts exploiting jadarite, stating that its validity in Serbia is very low.
– If we take into account how much damage will be caused if the mine starts working, then it is necessary to provide the state through an increase in ore rent, but also defining the collection of “penalties” in case Rio Tinto deviates from contractual obligations. The damage will definitely be, and that is why it is necessary for the level of ore rent and “penalties” that the state would prescribe to be high – our interlocutor states. In his opinion, the exploitation of jadarite in the vicinity of Loznica should not be conditioned by the opening of a factory of lithium batteries for electric cars.
– Those two jobs should never lean on each other. Whenever something like that happened in our area, it did not give the expected economic results. If there is a market for such products, the business of producing batteries for electric cars should be carried out independently of the exploitation of jadarite in Serbia – Kovacevic believes.
When it comes to the amount of ore rent in Serbia, it is necessary to remind that in January, the Minister of Mining and Energy, Zorana Mihajlovic, stated that the department she heads is in favor of increasing the ore rent. On that occasion, the ministry did not answer Danas’ question whether the Ministry of Finance had been offered a percentage increase in the amount of ore rent. Ore rent in Serbia is among the lowest in the region and amounts to three to seven percent of income. For example, in Croatia it is 10 percent, in Hungary and Romania 12 percent each, and in Slovenia 18 percent of the income.
Rio Tinto has plans for second lithium mine in Serbia
After successful exploration of jadarite lithium ore near Loznica in Serbia, the company “Jadar Lithium” (Rio Tinto) intends to open another lithium mine away from the public eye, with the blessing of the Ministry of Mining and Energy but also local authorities.
We are already well aware that Rio Tinto is an extremely controversial company that operates on the world market with major problems related to environmental protection and environmental disasters. This company also reached the municipality of Pozega as “Jadar Lithium”, where, far from the eyes of the public, it plans to start conducting geological research of lithium, boron and the accompanying association of elements.
Fortunately in the accident, the association “Initiative for Pozega”, as soon as it learned about this plan, urgently informed the public, bearing in mind that it is a sensitive environmental problem.
A large number of surprised people from the Pozega area immediately spoke out, expressing their explicit opposition to this ecocide, the beginning of which was announced for April 17, 2021. This led to the emergence of numerous pieces of evidence about the illegal planning of Rio Tinto’s works, but also gave an opportunity to react before it was too late.
In addition to the harm to the environment, there are significant legal omissions for the implementation of the plan – the owners of the plots on which the works are planned, did not give consent to the said company to use their plots for research purposes. Therefore, it is not clear how they planned to use these plots, considering that the precondition for the start of works is the regulation of property-legal relations. In the figure below, the marked points represent the places where the research is planned.
An additional problem and at the same time a great shame is the blessing of the Ministry of Mining and Energy to start the works. On March 1 of the current year, the Ministry passed a decision approving the company “Jadar Lithium” to conduct geological research in the municipality of Pozega.
In that name, “Initiative for Pozega” will submit a request for delivery of a decision to the company “Jadar Lithium” approves the performance of works on geological research, the Geological Research Project and other accompanying documentation, in order to determine whether the law has been followed in the specific case, and to take further steps based on the insight into the documentation.
In addition to the Ministry, the local government also gave its blessing, but we are already used to that, so it is unnecessary to explain how and why – everything is crystal clear.
Despite that, local residents and residents of the municipality of Pozega, with the support of other municipalities and activists, will fight until further notice to prevent attempts to turn the village into an environment where normal life is impossible due to pollution.
Namely, the process of lithium exploitation, as a rule, leaves severe consequences for the environment (this segment of the problem was pointed out by the expert public during the public debate on the opening of a lithium mine in the vicinity of Loznica).
– Exploitation of lithium from jadarite ore, the only mineral in the world, without established and good exploitation practice, is a complex procedure of ore extraction and processing for the purpose of lithium extraction. The ore that would be extracted, after crushing, would be treated with concentrated sulfuric acid at a temperature of 250 degrees, which is also the most risky part in the process of exploitation of lithium from jadarite, because it is necessary to provide a large amount of water and energy.
– Evaporation of sulfuric acid, wastewater and tailings would permanently pollute not only the immediate surroundings, but also the wider area, bearing in mind that in this territory (villages of Pozega – Duskovci, Drazinovici, Velika Jezevica, Madjer, Gornja, Srednja and Donja Dobrinja , Papratiste, as well as in a village in the municipality of Kosjeric – Subjel) are watercourses that make up the upper basin of the West Morava, so that an ecological catastrophe threatens much of Serbia.
Jadar Lithium in Serbia gets four exploration licenses
Australian Jadar Lithium, formerly South East Asia Resources, agreed in December 2017 to acquire the entire capital of Centralist Pty Ltd which holds five Serbian lithium exploration licenses – Cer, Bukulja, Rekovac, Krajkovac, and Vranje-South – covering a total area of some 328 square kilometres.
Jadar Lithium, has recently secured four new exploration licenses in Serbia, located within the lithium-borate Vardar belt, the company said.
The company has secured the Ursule and Siokovac exploration licences, adjacent to the Jadar’s existing Rekovac license where its maiden drilling programme identified the presence of preserved borate and lithium mineralisation, as well as the Dobrinja and Pranjani licenses located in western Serbia, Jadar Lithium said in a filing with the Australian Securities Exchange.
The Ursule license covers tan area of 99 sq km and most of the central portions of the basin were mapped as middle Miocene age sediments, the Siokovac license covers the northern part of the Grear Rekovac Basin covered by a younger quaternary lake and alluvial formation which overlies middle Miocene marine sediments. The Dobrinja and Pranjani licenses cover approximately 64 sq km of outcropping Neogene age basins containing lithified lacustrine sediments mapped as early, middle and upper Miocene.
Jadar also said it decided to spin out its Serbian lithium and borate assets into a newly incorporated subsidiary, Balkan Mining and Minerals Limited. It is intended that Balkan will undertake a $6.5 million (5.5 million euro) initial public offering (IPO) and seek a listing on the Australian Securities Exchange. Under the proposed spin out transaction, Jadar will retain an interest of approximately 22% in Balkan, maintaining its exposure to the Serbian lithium and borate assets via the company’s equity interest in Balkan. Additonally, Sandfire Resources Limited (“Sandfire”) has conditionally agreed to a strategic investment of $2.0 million amounting to an approximate 22% equity interest in Balkan.
Large new Zijin investments in Serbia
New announced Zijin investment in Serbia is worth 474 million dollars. Aleksandar Vucic announced that the Chinese company Zidjin will start a large investment and the first works in the Timok mine Cukaru peki in September.
“Zidjin is doing an extraordinary job in Bor (RTB), we asked them to deal with environmental protection,” said Vucic, emphasizing that the company contributes a lot to the growth of Serbian GDP.
As he said, that company achieved good results and growth in all segments when it comes to ore, between 11 and 19 percent. Vucic said that Linglong in Zrenjanin is realizing a large investment worth almost a billion dollars, and that trial production will begin in the fall, and regular production at the beginning of 2022. The President expressed the expectation that trial and regular production in the Chinese factory Sin Ju in Nis will start before the end of the year, as well as that 1,000 workers will be employed there. The president expects an even greater inflow of Chinese investments in the coming period.
“New Chinese investors are coming and we have many more projects,” said Vucic.
He emphasized that the Chinese HBIS, which successfully took over Zelezara Smederevo, is also important for the Serbian economy. Vucic mentioned that HBIS is facing very difficult conditions due to restrictions on the import of sheet metal, but that the company provides jobs for 5,200 people, as well as that another 10,000 subcontractors depend on its work, B92 reports.