Resource Mining Corporation acquires highly prospective nickel and lithium tenements in Finland

“We are already in early-stage discussions with potential strategic partners for the development of these projects and I look forward to completing this acquisition and finalising those negotiations which will add significant further value to our shareholders”, said executive chair Asimwe Kabunga.

Resource Mining Corporation Ltd (ASX:RMI) has executed a binding term sheet to acquire Element92 Pte Ltd, the owner of three projects in Finland: the Ruossakero Nickel Project in Northern Finland, the Kola Lithium Project in Central Finland, and the Hirvikallio Lithium Project in Southern Finland.

The company completed extensive due diligence activities on the target projects, including acquiring a large volume of historical data on the projects and the commissioning of an external review by Skapto.

Resource Mining Corporation’s executive chair and consultants then confirmed the review’s findings with a site visit that generated new prospective lithium targets on the tenure.

RMI negotiated all-scrip acquisition terms to the tune of 40 million RMI shares at $0.10 per share. The agreement is now subject to execution of formal documentation.

Search begins for strategic partners

“We are excited to have secured agreement to acquire this portfolio of highly prospective nickel and lithium projects in Finland following an extensive due diligence process”, Resource Mining Corporation executive chair Asimwe Kabunga said.

“We are already in early-stage discussions with potential strategic partners for the development of these projects and I look forward to completing this acquisition and finalising those negotiations which will add significant further value to our shareholders.”

The projects sit near other companies’ lithium projects, and are host to historical mines and known lithium pegmatite occurrences, giving RMI confidence in the tenements’ prospectivity, Proactive Investors reports.

Serbia, New energy and mining minister pushes Rio Tinto lithium project forward

Residents of this region and members of the Association Ne damo Jadar have been pointing out since the beginning of the year that “the end of the Jadar project” was only a pre-election promise and that Rio Tinto does not intend to leave and abandon the construction of mines in western Serbia. If there were those who believed the words of Prime Minister Ana Brnabić, that the construction of the mine was abandoned, the recent statements of the new Minister of Mining and Energy, Dubravka Đedović, made it clear that the story about lithium in Serbia may have its continuation.

The minister’s words that “all countries that have some natural resource, but do not use it, are at a loss” and that “Serbia is lucky to have reserves of a very important mineral”, confirmed that Rio Tinto will most likely stay.

Zlatko Kokanović, vice president of the Citizens’ Association “Ne damo Jadar”, believes that the new minister was appointed to this position to “push the project forward”, but that she will not be able to do that.

“This is an indicator that the Government of Serbia is actually the government of Rio Tinto and that Serbia is ruled by foreign powers, American, English, Canadian and Australian, and all the lobbyists who are pushing the project are not doing it for nothing”, says Kokanović.

He points out that he agrees with the minister that any country that does not use its natural resources is at a loss.

“We have agricultural land and a lot of water, which is a resource that is the greatest wealth for the one who owns it, because the future of the world is food, water and air”, emphasized the interviewee of Danas.

He believes that, if the state were to distribute the money it plans to invest in housing to agricultural households, it would be returned tenfold.

“If our valley was turned into greenhouses, canalized and consolidated agricultural plots, we could produce and export healthy, local, organic food at fabulous prices, because the world lacks quality food”, explains Kokanović.

The problem, he says, is that the government does not respond to people who live alone from their work and who can freely express their opinions and attitudes and be forgiven for them.

“Their goal is to put citizens in cages, in factories, and make everyone dependent on those companies, so they will have to obey and literally become slaves”, says Kokanović.

That luck is not in mining, he cites the examples of Bor, Majdanpek, Smederevo and Zrenjanin.

“Look at how people live in places where they have mines. Maybe the first generations, ten years after the opening of the mine, lived well and prospered, that’s why now their grandchildren are cursing them, because they left them with mockery and pollution”, he says.

He notes that Bor and Majdanpek are the cities with the highest rate of cancer patients.

“We have three environmental bombs in Loznica, the failed Viskoza, Zajača and the Stolice tailings, where there was an antimony spill in 2014. In Zajaca, children have lead in their blood, and this government also brought us the companies Mint and Adijent”, reminds Kokanović.

He says that these factories operate normally in Serbia, even though they still do not have usage permits.

“They have construction, but they don’t have utility, because they haven’t solved the waste water system, and it’s an open secret in Loznica that unprocessed water from these factories ends up in the Drina. When the Drina is polluted, there is the Sava and the Danube, and we are left without drinking water. When we run out of water, the whole country is in trouble”, he warns.

He notes that money can be obtained in a much simpler and more harmless way, without pollution.

The message to the minister, he says, is to declare decisively whether he is for or against the Jadar project.

“And to confirm for us whether it is true that she received Serbian citizenship ten days before she became a minister, and whether her husband is one of the consultants at Rio Tinto?” “How much of a patriot can one be, to go from a salary of 10,000 euros to 1,000 euros, or is something expected of her in return”, asks Kokanović.

He hopes, he says, that all this is not true and that the new minister will help pass the Law on the permanent ban on research and exploitation of lithium and boron on the entire territory of the Republic of Serbia.

The minister has her hands full

Marijana Petković from the Ne damo Jadar association points out that before making any decision, Minister Đedović should read the proceedings of the Serbian Academy of Sciences and Arts (SANU) entitled “Project Jadar – What is known?”

“The professional public and the Academy of Sciences gave their opinion on this project, as well as the Faculty of Biology, which conducted a study, but which was never published because it was negative for Rio Tito. Minister Đedović should consider the demands submitted by the Association of Environmental Organizations of Serbia (SEOS) and work in the interests of the citizens, as the Constitution obliges her to do.

He concludes that the minister has her hands full, and that the people will not allow her to choose between lithium and water, Danas writes.

Lithium mining projects around Europe

Europe is looking to increase its domestic supply of lithium. Find out which companies are moving ahead with lithium-mining projects in the area.

Europe has set itself ambitious goals in order to become climate-neutral by 2050.

A big part of reaching that objective is the electrification of transportation, and recently proposed legislation sets targets to cut carbon emissions from cars by 55 percent and vans by 50 percent by 2030.

As battery metals investors know, the electric vehicle industry is a key demand driver for essential metals such as lithium — which the European Union included on its critical minerals list for the first time in 2020.

Furthermore, in recent years there has been a push to build out supply chains that are less dependent on Asia, particularly China, with the European Union working to release its Critical Raw Materials Act.

Europe is desperate to increase its domestic supply of lithium, though only a limited number of projects are capable of achieving production in the coming years, Jack Bedder of Project Blue told the Investing News Network.

For Bedder, Europe will have to innovate to significantly reduce its reliance on imported lithium feedstock. “Europe’s ability to ‘win’ the battle for lithium self-sufficiency remains hinged on technological breakthroughs, along with the creation of a supporting framework in which new mining and processing facilities can operate in a globally competitive industry”, he said.

Even though Europe’s lithium supply is quite limited, there are a few companies exploring and developing lithium projects in the region, with the aim of supplying the electric vehicle industry. Here’s a brief overview of some of them listed in alphabetical order.

European Lithium

Company Profile

European Lithium’s Wolfsberg hard-rock lithium deposit in Austria has a positive prefeasibility study. The company is currently working on a definitive feasibility study that is expected to be delivered in the first quarter of 2023.

The ASX-listed company, which is aiming to be the first and largest local supplier of lithium hydroxide in the region, holds a non-binding memorandum of understanding with BMW. If a deal is agreed upon, the German carmaker would make an upfront payment of US$15 million for the future supply of lithium hydroxide from Wolfsberg.

The company recently made news headlines when it said it would merge with Sizzle Acquisition, a special purpose acquisition company, to create a US-listed company called Critical Metals. European Lithium would be Critical Metals’ biggest shareholder.

European Metals

Company Profile

European Metals’ Cinovec project is said to host the largest lithium resource in Europe. Cinovec, which is located in the Czech Republic, is a hard-rock lithium deposit that is 49 percent owned by European Metals and 51 percent owned by energy group CEZ.

According to a 2022 prefeasibility study, the Cinovec project will have a mine life of 25 years and annual production of 29,386 metric tons (MT) per year of battery grade lithium hydroxide.

Imerys

Starting in 2028, minerals company Imerys is looking to produce 34,000 MT of lithium hydroxide per year for the next 25 years at an existing mine at Beauvoir in Central France. The company has also recently detected lithium in the British region of Cornwall; Imerys is currently exploring the viability of lithium mining in the region.

Infinity Lithium

Company Profile

The San Jose deposit in Spain is 75 percent owned by Australia’s Infinity Lithium. The company, which published an underground mine scoping study in 2022, will mine the hard-rock mica resource and develop processing facilities. Infinity Lithium also kicked off the mining license and environmental impact assessment process this year.

Keliber

Keliber holds several advanced lithium deposits in Finland’s Central Ostrobothnian area.

The privately held company’s lithium project is comprised of five mines, the spodumene concentrator area at Päiväneva, the lithium chemical plant at the Kokkola Industrial Park and auxiliary facilities at all sites. The company is aiming to reach production capacity of 15,000 MT of lithium hydroxide per year starting in 2025.

Keliber is majority owned by Sibanye-Stillwater, which upped its stake in the company earlier this year to 84.96 percent. State-owned company Finnish Minerals Group, alongside other minority shareholders, holds the remainder.

Rio Tinto

Company Profile

Seasoned lithium investors will have heard of the Jadar lithium-borate deposit in Serbia, a massive deposit where lithium is hosted by the previously unknown borosilicate mineral jadarite. Major miner Rio Tinto has invested and committed more than US$450 million to the project to date, but has faced massive environmental protests, leading the Serbian government to block the project.

Savannah Resources

Company Profile

Savannah Resources is working on the Mina do Barroso hard-rock lithium project in Northern Portugal. The asset, which is considered one of Europe’s biggest lithium projects, was awarded a 30 year mining lease in 2006, and has a three block mining lease application.

The company has faced opposition from environmental and community groups. Savannah Resources has been required to resubmit its environmental impact assessment, which is expected to happen in the first quarter of 2023.

Vulcan Energy Resources

Company Profile

Vulcan Energy Resources says its combined geothermal energy and lithium resource is the largest in Europe, with license areas in the Upper Rhine Valley in Germany and Italy. It is developing its zero-carbon project with the aim of decarbonizing lithium production.

Vulcan has signed deals with Stellantis, Renault, Umicore and South Korea’s LG Chem.

Zinnwald Lithium

Company Profile

After acquiring Deutsche Lithium in 2021, Zinnwald Lithium is now the sole owner of the Zinnwald deposit in Zinnwald-Georgenfeld, located on the eastern side of Germany near the border with Czechia.

The Zinnwald deposit is a late-stage development project with an approved 30 year mining license. The company is currently working to update its environmental impact assessment, Investing News writes.

Serbia, Entire country needs to be blocked if Rio Tinto continues its lithium project

Member of parliament Aleksandar Jovanović Ćuta from the Together party accused the government that it sold Serbia’s natural resources to foreigners and called on environmentalist organizations and the population to revolt against mining projects. “We will not let that happen peacefully,” he stressed and threatened that the central Gazela bridge in Belgrade would be blocked together with the entire country if Rio Tinto continues with its lithium project.

The new Government of Serbia is facing discontent among environmental activists and the local population about mining projects just like the former cabinet of Prime Minister Ana Brnabić, but the difference is that now they also have representatives in the National Assembly. Head of the parliamentary Environmental Protection Committee and copresident of the Together (Zajedno) party Aleksandar Jovanović Ćuta said the committee’s next meeting would be held in Loznica.

Rio Tinto is still working on its project for lithium mining and processing in the area in western Serbia even though the government formally halted it in January.

The National Assembly still didn’t fulfill its legal obligation to schedule a debate on the people’s initiative to permanently ban lithium exploration and exploitation, Jovanović pointed out

Ahead of the vote on the appointment of the new government, Jovanović called other lawmakers and ministers to also come to the meeting and explain why the company still has an office in the village of Gornje Nedeljice in the territory of the city of Loznica. Furthermore, he pointed out that the National Assembly still didn’t fulfill its legal obligation to schedule a debate on the so-called people’s initiative to permanently ban lithium exploration and exploitation. The petition was signed by 40,000 people, said the top official from the green left Together party.

Jovanović, one of the leaders of protests held in the past two years against Rio Tinto’s Jadar project, accused the government that it is working for foreign interests. “Serbia is an ecological time bomb. You gave the Russians our gas and oil. To the Chinese you gave our copper and gold. Now another predator needs to be appeased, and its name is Rio Tinto. There are more than 50 mines in the new spatial plan”, he stated.

Moreover, exploration was approved for 70 potential gold mines and more than 60 lithium mines, Jovanović asserted.

Serbia is an ecological time bomb, the head of the parliamentary Environmental Protection Committee warned

“That is 15% of our territory. Well, do you think we will peacefully watch how your foreign pals plunder our gold, our lithium and our natural resources? And you plan to let peasants become environmental refugees. I am calling on all environmentalist organizations, all citizens. There is a keyword for 2022, namely revolt. We will not let that happen peacefully”, he threatened. Jovanović claimed that the Gazela bridge on the highway in central Belgrade would be blocked again, together with entire Serbia, if Rio Tinto continues with its project, Balkan Green Energy News reports.

Europe is looking to enter the race for lithium

Lithium is the essential resource for developing a sustainable electric vehicle industry in Europe. Until now, this resource has mainly been produced in Australia, Chile, and China. Europe is looking to enter the race for this white gold and is betting on several deposits in its soil. We’ve put together a list below of the 6 main European mines that will be exploited in the coming years.

Lithium is a white powder that is essential for the manufacture of electric car batteries. In 2021, according to the US Geological Survey (USGS), global production is close to 100,000 metric tons, a figure 20% higher than in 2020. Global consumption in 2021 is estimated to be 93,000 metric tons. This is due to strong growth in global demand, particularly because of the accelerated production of EV batteries required for the energy transition.

This alkaline metal allows electrons to flow between a positive and a negative electrode, both of which are immersed in an ionic conducting liquid (the electrolyte).

When a lithium-ion battery is used, for example to power an electric car, the electrons accumulated in the negative electrode are released and reach the positive electrode. The opposite happens when the battery is being charged. Without lithium, batteries could not power a device and then recharge.

There are two types of lithium that can be used in batteries: lithium carbonate and lithium hydroxide. Currently, the demand for lithium hydroxide for batteries is increasing and could exceed the demand for lithium carbonate by 2030. Lithium hydroxide is currently priced at around US$35,000 a metric ton. Lithium carbonate is around US$ 59,900 a metric ton.

The problem with this precious metal is that it is found in a few places on earth. The main producers are Australia (55%), Chile (26%), China (14%), and Argentina (6%). China is the leading lithium refiner.

Reducing Europe’s Dependence

This means that Europe has no choice today but to import almost all the lithium it consumes. According to forecasts, at least 30 million zero-emission electric vehicles will be on the roads of the EU by 2030. Thermal vehicles will be banned in Europe in 2035. By 2030, Europe aims to produce 25% of the world’s batteries (compared to 3% in 2020) in its numerous production plants currently under construction.

The EU should therefore see its lithium consumption explode in the coming years. Some estimates predict a 20-fold increase between 2020 and 2030.

In a tweet, Ursula von der Leyen warned that Europe must get rid of its dependence on the outside world, especially China. She believes the continent must put in place an industrial strategy not only for lithium but for all the other rare earth elements found in batteries such as nickel, cobalt, or graphite.

Europe has already entered the race for the new white gold and is seeking to develop its own lithium mining industry. The USGS estimates probable European resources at 7% of the world total. The number of mining projects has increased in recent years in several European countries.

Here is a tour of Europe’s main projects and the companies behind them. These projects could eventually cover 80% of European battery needs.

1/ Portugal

The Barroso Project, Savannah Resources

Portugal has the largest reserve of lithium in Europe with around 60,000 metric tons of known reserves, according to the USGS. But until now, Portuguese lithium has mainly been used in the ceramics industry to make glassware. The country is just now entering the race for the new white gold.

British company Savannah Resources has ambitions to exploit the Barroso mine in the north of the country, which is rich in spodumene, a form of hard rock lithium.

According to Savannah Resources, the mine could contain 27 million metric tons of lithium, including over 285,900 metric tons of lithium oxide. According to the company, this is enough to meet the demand in Europe over the next few decades.

The group is waiting for the green light from the Portuguese authorities to start production as the project is facing strong local opposition. If opened in 2023, the Mina do Barroso open-pit mine will become the first major producer of lithium in Europe.

2/ Germany

The Vulcan Project, Vulcan Energy

Australian company Vulcan Energy is currently working on a pilot project in the Upper Rhine Valley in Germany. The idea is to produce “zero-carbon” green lithium by using geothermal energy to extract lithium-rich brine from the Upper Rhine. The final lithium hydroxide will then be created by electrolysis.

The company says they were able to produce 57.1% lithium hydroxide, surpassing the 56.5% battery grade specifications usually required.

The Vulcan pilot plant in Germany has been operating since April 2021 and is expected to launch commercial production in 2025.

3/ France

The EMILI Project, Imerys

French company Imerys recently announced that it will start mining a lithium deposit in the Massif Central (in the Allier department) in 2028.

Since the second half of the 19th century, the site has been home to a quarry producing 30,000 metric tons of kaolin per year for tile production.

According to Alessandro Dazza, CEO of Imerys, the deposit contains one million metric tons of lithium oxide. This would be enough to produce, according to the company, “34,000 metric tons of lithium hydroxide per year from 2028 over 25 years.” This would enable approximately 700,000 electric vehicles to be equipped with lithium-ion batteries.

4/ Czech Republic

The Cinovec Project, European Metals Holding

The Cinovec project, located 100 km from Prague in the Czech Republic, is being carried out by European Metals Holding. It aims to produce nearly 30,000 metric tons of battery-grade lithium per year over a period of 25 years.

According to European Metals’ 2022 pre-feasibility study, Cinovec has the potential to become the producer of the lowest-cost hard rock lithium in the world. The mine could produce at a cost of US$5,000 to US$6,000 per metric ton.

5/ Austria

The Wolfsberg Project, European Lithium

European Lithium is developing the Wolfsberg Project in Carinthia, 270 km south of Vienna, in Austria. Located in the heart of Europe, this mine project plans to extract 10,000 metric tons of lithium hydroxide per year.

According to the company, this will equip the batteries of approximately 200,000 electric vehicles. They hope to achieve an operating rate of 800,000 metric tons per year with a mine life of over ten years.

The company expects to begin production in 2025.

6/ Finland

The Keliber Project, Keliber Oy

Finnish company Keliber Oy, specializing in mining and battery chemicals, is currently running a project in western Finland with the objective of reaching the production of 15,000 metric tons of lithium hydroxide per year beginning in 2025.

The company is also aiming for sustainable production. The lithium they plan to extract will, they say, have a smaller carbon footprint than the competition. This is because the refinery plant is located 70 km from the mine. In addition to this, more than half of the electricity in the Finnish national grid is generated from renewable energy sources. As a result, the refining process will be more environmentally friendly.

The Finnish potential has attracted the attention of investors. South African mining giant Sibanye-Stillwater intends to acquire a majority stake in Keliber Oy.

Future Challenges

The enthusiasm for lithium mining in Europe is not unanimous, however. In Serbia, the Anglo-Australian company Rio Tinto stopped its project in the southwest of the country due to local opposition.

In the future, the most important challenge for Europe will be to find ways to accommodate mining projects and environmental and social standards. As can be seen, the European lithium extraction projects that are listed above will not be operational until 2025. But the demand for gigafactories is already here. Swedish company Northvolt has already opened Europe’s first battery gigafactory, Direct Industry writes.

Lithium mines are not Serbia’s potential

The Alliance of Environmental Organizations of Serbia (SEOS), reacting to the statement of the Minister of Mining and Energy, Dubravka Đedović, that she will consider how to implement the exploitation of lithium, assessed that with the first advertisement, she made it clear why she came to that position, the non-governmental organization announced.

Didn’t anyone instruct the new minister when he offered her to sit in a chair from the white world, that she should work in that position in the interest of the people and the state? Understandably, none of the colleagues could take on that duty, because they would probably choke in the middle of a sentence, SEOS points out.

That association tells the minister that lithium mines are not Serbia’s potential, neither in the economic sense nor in any other sense.

And the fact that our non-renewable mineral in the non-renewable land that feeds us is essential to the world’s renewable energy sources is not our concern. We don’t want green pastures and bills for white world starched shirts to go over our hump, states the SEOS press release, Danas reports.

The Rio Tinto Company has not left Serbia

The Rio Tinto Company has not left Serbia and, judging by environmental associations in the country, has not stopped its lithium exploitation project in the Jadar Valley, even though the government’s decree from 20th January was supposed to put an end to the company’s lithium exploration.

According to Zlatko Kokanović, a resident of Gornje Nedeljice, Rio Tinto has not given up on lithium in Serbia and has no intention of giving up.

“Twenty days ago they bought a house that is not in the mining area but along the motorway route. Their activities were supposed to be stopped by the government decree from 20 January, but the only thing that has been done is the conversion of land from residential to agricultural use again,” emphasises Kokanović from the Ne Damo Jadar Association.

He says that on 10 August, the municipal administration issued 45 decrees stipulating the demolition of dilapidated houses and that the Association and the public were only informed about it at the beginning of October.

“We asked the municipal administration to see the decree and all the planning documents, so we can inspect them and determine who authorised the demolition without a building permit, but also to tell us where the waste will be disposed of”, Kokanović notes.

The local administration responded that they intend to dispose of the waste on their farmland, which, as he says, cannot be used as a landfill site.

“The inspection did not do its job and we sent a letter to the Ministry of Agriculture to do something about it as there are many agricultural plots devastated and not used for the intended purpose,” he notes.

Kokanović adds that he is waiting for an answer and expects the new Serbian government to adopt a proposal for a permanent ban on the exploitation and processing of minerals containing lithium and boron on the territory of the whole of Serbia.

“Only then will the project be finished. When the new government is formed, we will again send a letter in which we are urging for Rio Tinto to leave the country and demanding that no other such company be allowed to operate here’, Kokanović underlines, Serbian Monitor writes.

Rio Tinto’s Serbian saga offers a lesson in critical minerals

The failure of the Jadar Project in Serbia should be viewed as an opportunity for all role-players to recalibrate their processes in line with ESG principles

The northern hemisphere’s summer of 2022 will be remembered as one of the hottest in recorded history. For example, Nasa reported that June was one of the hottest Junes on record. The UK, in turn, experienced record temperatures in July.

On May 14, the city of Jacobabad, Pakistan, became the hottest city on Earth, when temperatures peaked at 51ºC. Contemporaneously other parts of the world suffered devastating climate change-related fires (such as those that blazed across France) or floods (including the August 8 large-scale floods in Seoul).

These events provide an unfortunate prelude to the Sharm el-Sheikh Climate Change Conference scheduled for November (better known as COP27), which is now less than three months away. While it remains critical for governments across the world to remain committed to the undertakings provided under the Paris Agreement, words without actions are of little value to those who are being (or will soon be) affected by increasingly severe weather events.

It should therefore come as no surprise that the demand for clean energy solutions has significantly increased. The sale of electric vehicles is an important example. According to EV-Volumes data, more than 900,000 new passenger plug-in electric cars were registered in June 2022. This represents a 54% increase year on year. If the trend continues into the second half of the year it could lead to more than 1-million electric cars being sold each month and more than 10-million over the course of the next year.

The single most important impediment to this growth trajectory, according to a July 2022 report by the International Energy Agency (IEA), is the supply of critical minerals and metals used in the manufacture of batteries. According to the IEA, battery and minerals supply chains will have to expand tenfold to meet government electric vehicle (EV) ambitions.

Following the increased demand for battery metals during the pandemic the prices of raw materials such as cobalt, lithium and nickel surged. In May lithium prices were more than seven times higher than in early 2021 owing to unprecedented battery demand and a lack of sufficient investment in new supply capacity.

The demand for key minerals such as lithium will only increase as the global community continues to race towards net zero by 2050. Whether or not we will succeed depends on access to the required minerals.

Controversial Jadar Project lithium mine

On April 3 Aleksandar Vučić was re-elected for a second term as president of Serbia, with the coalition formed around his party, SNS, winning the most seats in the National Assembly, albeit falling short of an outright majority. Vučić’s re-election followed the widely publicised January 20 cancellation of what became known as the controversial Jadar Project, the proposed development by Rio Tinto of a $2.4bn lithium mine in Serbia.

While the government’s actions raised new questions surrounding the future of the lithium mining industry in Serbia, in the light of the IEA’s recent report it also poses existential questions for global supply chains.

The cancellation of the Jadar Project followed months of countrywide protests over the potential environmental impact of the project. The affair gave rise to intense speculation over the introduction of a possible blanket ban on lithium mining in Serbia; president Vučić’s previous administration had promised to defer such a decision until after the election.

The introduction of such a ban would prove to be a mistake. The mineral deposits at the heart of the Jadar Project are located underneath a river system in an agricultural area that is prone to flooding, giving rise to a material environmental risk. The Serbian government did not have a direct stake in the proposed lithium mine and so could not justify the project on the basis that it would fill public coffers. The government consequently did not believe it could do what governments elsewhere do when they have a fair deal: politically and publicly defend it.

The Serbian government had hoped to use the project as a basis to attract further investment across the batteries sector, including the manufacturing of batteries and battery-reliant products, such as EVs. However, the government was unable to present to the public concrete assurances that the project would lead to the creation of more than a small number of relatively low-skill mining jobs. As a result there was a widespread sentiment among the Serbian public that the main beneficiaries of the Jadar Project would be European carmakers and consumers, who would benefit from Serbia’s cheaper labour costs at the expense of the Serbian environment.

By December 2021 thousands of people across the country had began protesting, and the matter quickly became the leading electoral issue in the build-up to the general election on April 3 2022. As a result, on January 20 the government announced that it was revoking all of Rio Tinto’s permits relating to the project, with the promise that it would consider introducing an outright ban on lithium mining following the general election.

Although the Jadar Project was ostensibly cancelled over concerns regarding the potential of environmental damage, it is important to note that Rio Tinto had complied with all applicable local laws. The project was cancelled prior to the completion of a final environmental impact assessment, as mandated by Serbian law, meaning the public furore over the potential environmental damage was not supported by a comprehensive scientific assessment.

The failure of the Jadar Project is therefore an important example of a mining project being cancelled owing to reaching a critical level of opposition from the public, also referred to as a loss of the “societal licence” to operate that may not have existed in the first place.

Managing the ‘S’ in ESG

The episode illustrates the reality that public acceptance is the currency on which mining companies trade. Such acceptance of a mining company can make or break a project, including one with strong central government backing. Accordingly, mining companies must be sensitive to the fact that globally the sector is often not trusted by communities for a variety of reasons (often outside the control of the companies themselves).

Companies must become better at convincing communities, authorities and the public that they can be trusted because they have a well developed understanding of the social risk factors that are most relevant to each individual project, rather than adopting an unchanging, one-size-fits all approach. The lack of a social impact assessment in Jadar (with an integrated human rights impact assessment), in line with industry best practice (though not required by Serbian law) proved fatal in this regard.

At the same time, the failure of the Jadar Project cannot rest on Rio alone. Jadar’s host government partner, the previous Vučić administration, expended political capital in promoting and advocating for the project until the affair became a serious electoral risk. The public was not persuaded by arguments that the project had been conducted in accordance with the applicable regulatory regime, largely because the regulatory regime itself simply was not aligned with the public’s evolving expectations. Governments, as well as mining companies, should be mindful of the fact that public-interest projects are always subject to scrutiny under the evolving criteria of societal expectations.

This is not in itself a new concept; it is simply the case that the public expectations on mining companies are increasingly becoming much more demanding than the legal requirements imposed by national regulatory regimes. The episode should be seen as a timely reminder for national regulators and mining companies should recalibrate their processes to be founded in environmental, social and governance (ESG) principles. Moreover, if governments and national regulators wish to remain the final decisionmakers over which mining projects are deemed to be in the public interest, they must ensure that the legal and regulatory regimes in place reflect the evolving expectations of the public in each stage of the development and operation of a mine such as Jadar.

The role of international financial institutions should likewise not be overlooked in this regard. Although they did not feature prominently in the Jadar Project, similar projects in developing countries are often financed (at least in part) by large international financial institutions such as the World Bank’s International Finance Corporation or the US Development Finance Corporation. In view of the importance placed by stakeholders on the reputation of mining companies, the backing of those international financial institutions is often used to buttress the credentials of sensitive projects.

Where this is the case the relevant international financial institutions are well placed to guide, through their well-developed performance standards, both mining companies and governments in navigating the challenges associated with obtaining and maintaining a project’s societal licence. This may include, where appropriate, making the availability of financing conditional on the relevant mining company satisfying certain ESG-linked criteria.

History is the best teacher

It is clear that the failure of the Jadar Project has exposed a breakdown in public trust and fault lines between the expectations of mining companies, governments and the wider public. However, extractive resources which are associated with “green” industries, such as lithium, present a unique opportunity to combine economic development with the advancement of the transition to low-carbon energy sources. Despite the associated challenges, entirely foregoing the extraction of such resources would be a mistake which is likely to have worse environmental consequences in the long run.

Accordingly, rather than resulting in a ban on lithium extraction, the failure of the Jadar Project should be viewed as an opportunity for investors, governments and international financial institutions to recalibrate their processes in line with ESG principles, to facilitate the sustainable growth of the mining sector. To achieve this a delicate balance must be struck between the ability of companies to turn a profit and the need to promote sustainable economic development and combat the effects of climate change in line with societal expectations and the concerns of the broader citizenry, Business Live writes.

Rio Tinto continues to buy land near Loznica

Rio Tinto continues to buy a land in Gornje Nedeljice, a village in the municipality of Loznica. That’s why the locals are wondering if  Prime Minister Ana Brnabić really put an end to the Jadar project? They are also concerned by the fact that the President of Serbia, as well as some ministers, are repeating that the biggest mistake is giving up on lithium mining.

Not so long ago in January, after protests organized by citizens throughout Serbia, Prime Minister Ana Brnabić put an end to the cooperation with Rio Tinto. “It’s all over and all requests have been met,” Brnabić said at the time. The Jadar spatial plan was cancelled, and therefore all permits and all agreements with Rio Tinto were cancelled. However, the company has not left Serbia and is still working.

“On the first of August, on the day of the constitution of the National Assembly, Rio Sava bought one household and one plot and transferred them to their own. This terrain is needed for the construction of a high-speed road.

“They didn’t do anything, they just used everything before the elections to calm down people, and it would be a shame if they misused it in the new government and if they would consider that project,” says Zlatko Kokanović, a resident of Gornje Nedeljice.

Apart from the President of Serbia, the current ministers are also saying that the Jadar project should not have been cancelled.

“I used a metaphor that is recognized all over the world, and that is that with lithium Serbia could have invented the Internet. Everywhere in the world when you say that, you think of something revolutionary, of something that fundamentally changes things, that’s what the Internet brought to humanity, it changed business and communication, lithium could have been that chance for Serbia, I will always advocate for better living and business conditions for all citizens of our country”, said the Minister of Construction Tomislav Momirović.

Zlatko Kokanović says that “the point is not what we could get with that lithium, but what we would lose”. “There are tens of thousands of people engaged in agriculture, and now they want to open a factory and employ 500 workers, while 10-15 thousand people will be left without their land and their primary occupation which is agriculture”, says Kokanovic.

The fight for a healthier environment continues also in the parliament. The Democrats are looking for a special session of the Assembly that would produce, as they say, a strategy for the environment, and they say that Rio Tinto was not present at the current level in 2004.

“The topic of Rio Tinto was not of great importance at that time, the mineral was researched all over the world, we could not know what it would turn into at that moment, it only later developed into such a serious problem, and the problem is not that a mine is going to be opened in Serbia, but that ecological standards have not been defined”, said the member of the Democratic party Branimir Jovančićević, Serbian Monitor writes.

Lithium project caught in Portugal’s red tape

Savannah Resources (AIM: SAV), the company building western Europe’s largest lithium mine, said on Wednesday it shared its shareholders’ frustration regarding the time it has taken Portugal to review its application, but noted it was a political process over which the company had little control.

Chairman Matthew King said the company expected to make further progress at the Mina do Barroso project this year, which would help Europe reduce its dependence on fossil fuels and speed up its “green transition.”

Savannah Resources said it has been two years since it submitted the environmental impact assessment (EIA) for an open-pit mine to Portuguese regulator Agência Portuguesa do Ambiente (APA).

The company filed the study in May 2020 and it was requested to provide additional information a few months later, which granted it a preliminary stamp of approval in April last year.

APA then launched a public consultation on the project, which has faced local opposition, but the watchdog is yet to announce its final decision.

“We passed the second anniversary of lodging the EIA,” King said. “This time last year, we had expectations that the decision would have been received by now but the finalization of the EIA is a political process over which Savannah has little control.”

The company acquired a 75% interest in Mina do Barroso in May 2017, maintaining a fast paced development approach since. January’s snap parliamentary election in Portugal, King said, had impacted the timing of the assessment as meetings with government officials were postponed.

Europe’s first

Mina do Barroso open pit lithium mine would be Europe’s first significant producer of spodumene, a hard-rock form of the battery metal.

The project holds a resource estimate of 27 million tonnes of lithium with over 285,900 tonnes contained Li2O, at an average grade of 1.06% Li2O, which the company believes to be enough to supply a “material proportion” of Europe’s lithium demand over the coming decades.

The mine will also yield a feldspar and quartz co-product used in the ceramics industry, which will be sold to customers locally and in neighbouring Spain.

Recent results from the latest phase of metallurgical test work program at the mine highlights the potential for lower capital and operating costs than those originally estimated.

Portugal, already Europe’s top lithium producer, accounts for about 11% of the global market, but its output is entirely used to make ceramics and glassware. That’s why Europe relies on lithium imports from Latin America’s “Lithium Triangle,” as well from Australia and China, Mining writes.