Who are the main players in the ore exploration business in Serbia
A dozen companies based in Australia, Canada and China, through offshore companies and affiliates in Serbia, control about 90 percent of the territory in which the state has issued permits for ore mining.
Approximately 100 companies registered in our country have state licenses for exploration of ores and metals in Serbia, and the total area on which they perform tests covers 5,673 square kilometers, which is a territory the size of a quarter of Vojvodina.
At first glance, it would be said that this is a business in which the competition is numerous. However, in reality, this business is mostly in the hands of only a dozen companies, mostly foreign, which, through affiliated companies, have exploration rights on approximately 90 percent of the territory where the possibilities for opening mines are being investigated.
The turning point for the rise of the ore exploration business in Serbia was 2015, when the Law on Mining and Geological Research was amended. The amendments to the mentioned act, which were adopted by the Assembly of Serbia in December 2015, deprived the local authorities of the authority to issue permits for research, and the decision on that was transferred to the Ministry of Mining.
The new rules have put investors and ore researchers in a much better position, as they “finished” the job at one address in Belgrade. Thus, for example, someone who intended to conduct field research spread over several municipalities no longer had to obtain a permit from each local government separately.
The serious possibility that the mentioned law will be changed was a strong enough signal to potential investors. In the months before the formal adoption of the law, several ore exploration companies were established, and this trend has continued in the coming years, according to data from the Business Registers Agency (APR), which BIRN analyzed.
Of the 30 leading companies in the area where ore is explored, 15 of them have been established since 2015. As of the end of January 2022, those companies had more than a 50 percent share in the total area where ores and minerals are explored in Serbia.
The often mentioned Rio Tinto is not on this list because they passed the research phase even earlier and were practically about to open the mine. There is speculation in the public that some of the companies listed below are “doing business” for Rio Tinto, but for now, everyone has denied those claims.
Network of related companies for ore exploration in Serbia
Who, in fact, are the key players in the ore exploration business in Serbia? Although permits are issued to individual companies that are registered as domestic in the APR, in some cases it is a kind of network of related companies that have the same ultimate owner. BIRN has already mentioned some of these companies in an article on ore exploration in protected areas.
Most of them are companies with foreign management and capital, which mainly comes from Canada, Australia and China.
The formal owners of companies established in Serbia for this activity are in many cases companies based in offshore zones, such as the British Virgin Islands, Malta, Gibraltar and Luxembourg.
Also, what characterizes them is the frequent change of ownership structure and name, so it is not uncommon for an ore exploration company to be founded under one name and owner, and in a few years it will be a company with a completely different name and owner.
In many cases, this type of company was founded by lawyers who were their formal owners and directors for a while, and then the ownership was transferred to companies from abroad.
The following are the top 10 lists of leading companies that control most businesses in Serbia through a network of affiliated companies, as well as the area where ore deposits are searched.
1. Constantine Resources, Australia
Based on data published by the Ministry of Mining on its website, which was further processed and analyzed by BIRN Serbia, “Konstantin Resources” is the company with the largest area where ores are explored. It is an area of 71,089 hectares, which extends to 11 locations from Eastern Serbia, through Sumadija, to the far west of the country.
This company, whose focus is research on gold, silver and copper, was founded in Serbia on August 15, 2017, and in the meantime it has changed its ownership structure. At the time of its establishment, the company “West End Resources PTY LTD” from Australia was registered as its owner. However, in 2019, “Konstantin Resoruces PTY LTD” was registered as the new owner of the company, which changed its name in Australia and kept the same registration number.
During the registration, Vaughan Scott Wishar was listed as the legal representative and director of “Konstantin Resources” in Serbia, and several companies in the field of ore exploration and mining are connected in Australia. In the last change in the APR, on May 24, 2021, he was deleted as the legal representative of the Serbian branch.
2. Zijin, China
The Chinese mining conglomerate “Zijin” is conducting research in Serbia on a total area of almost 60,000 hectares through four companies owned by it. According to the APR, Zijin could not be directly linked to all these companies, but the ownership of them is confirmed by a document published on the website of the Commission for Protection of Competition. It is a document in which the concentration of capital was decided and in which, among other things, the companies through which “Zijin” operates in Serbia are listed. These are “Balkan Exploration and Mining”, “Serbia Zijin Mining”, “Tilva” and “Serbia Zijin Bor Copper”.
“Balkan Exploration and Mining” had exploration permits on an area of 28,722 hectares, and the owner of this film in the APR was the company “Reservoir Consulting (BVI) Inc”, registered in the British Virgin Islands. This company received permits for ore exploration in the territory of the city of Belgrade, with a total area of 6,741 hectares. It is about the locality “Babe – Ljuta strana”, which covers the municipalities of Voždovac, Sopot and Barajevo, where the presence of lead, precious and non-ferrous metals was investigated. However, on February 22 this year, the Ministry of Mining announced that “Zijin” had given up on further research at this location.
Serbia Zijin Mining has permits for an exploration area of 18,841 hectares, and its formal owner is the Cukaru Peki BV company, registered in the Netherlands.
“Zijin’s” company “Tilva” has a permit for exploration on an area of 13,498 hectares, and the company of the same name registered in the British Virgin Islands is registered as its owner in APR.
Finally, the 5,267-hectare exploration area is controlled by Serbia Zijin Bor Copper, in which, in addition to Zijin-related companies, the Serbian government has a 36.99 percent stake.
3. Mundoro, Canada
The Canadian company “Mundoro” controls 51,744 hectares of exploration space in Serbia through the companies “Stara Planina Resources” and “Valdor Resources”.
The company “Stara Planina Resources” was founded in 2011, and since 2015 the owner of the company is “Mundoro Middelen B. V”, registered in the Netherlands, based in Canada. Mundoro in Canada also owns Great Mountain Ventures Ltd, which owns Valdor Resources, founded in Serbia in 2020. In all of these companies, both Serbian subsidiaries and in Canada, Teodora Dechev, an investment banker from Canada.
4. Dundee Precious Metals, Canada
Canadian mining giant Dundee Precious Metals operates in Serbia through two companies, which APR states are owned by Dundee Precious Avala SARL, registered in Luxembourg.
These are the companies “Dunav Minerals” and “DPM Avala”, which together have licenses for research on about 40,000 hectares. In Serbia, they have investigative spaces at nine locations, from Homolje in Eastern Serbia to the area around Kursumlija, Brus and Medvedja. By the way, these two companies initially operated separately, but later merged, and then they were taken over by “Dundee Precious Metals”.
5. Ibaera Capital, Australia
Ibaera Capital, an Australian investment fund specializing in ore exploration, is present in Serbia through Tara Gold and Zlatna Reka Resources, which together control 37,879 hectares.
“Tara Gold” was founded in 2016, and the company “Eldorado Gold Cooperatief U. A” from the Netherlands was registered as the owner. In the meantime, it became the property of the company “ISIHC Ltd”, registered in Great Britain.
“Golden River Resources” was founded in 2020 and its formal owner is “Betoota Holdings Ltd” from Great Britain. Both companies had the same director, Peder Olsen from Australia, for some time, and their ownership companies were registered at the same address in London. According to the data from the British business registers, the trail from London continues to the Cayman Islands, where the company “Ibaera Capital Fund GP Ltd” is registered, which also operates in Australia under the same name.
6. Balkan Metal Corp., Canada
The company “Balkan Metal Corp” from Canada in our country conducts ore research on a total area of about 35,000 hectares through the company “Golden Age Resources” registered in Serbia on May 11, 2018. Zoran Bulović is registered as its first owner in APR. However, on April 6, 2022, the company changed its ownership structure, and the company “Balkan Metals Corp” from Vancouver was registered as the new owner in APR.
7. Jadar Lithium Ltd, Australia
The company “Jadar Lithium Ltd” from Australia is present in Serbia through the company “Balkan Research”, which has licenses for research of lithium and boron on an area of 33,692 hectares. It was founded on March 18, 2016, under the name “Nova Centauri Maetals”, and the Australian company of the same name was registered as the owner at that time.
In the meantime, the names and owners have changed. On July 2, 2019, the company changed its name to “Jadar Lithium”, and on September 13, 2021, it was registered under the name “Balkan Research”. At the same time, the owners from Australia changed. The company first passed into the hands of a company called Centralist PTY LTD, which was later taken over by South East Asia Resources and changed its name to Jadar Lithium Ltd ”.
8. Metalfer, Serbia
“Metalfer” is the only company from Serbia that is among the leading companies that explore ores in Serbia. It is a group that gathers several companies engaged in trade, processing and research of ores and metal products, whose headquarters are in Sremska Mitrovica. The company was founded in 2002, and its co-owners are Branko Zečević, Zoran Lojović and Stefan Zečević.
9. Medgold Resources, Canada
The Canadian company “Medgold Resources” is looking for ores through the Serbian branch of “Medgold Research”. It is a company based on the wave of the changed Law on Mining and Geological Research, which controls about 20,000 hectares of exploration space in the municipalities of Trgoviste and Bosilegrad.
They were registered in the APR on January 14, 2016, less than a month after the adoption of the said act. Lawyer Marko Curic is the first owner. As of November 25, 2021, the company is formally owned by the company “Tlamingo Mining” registered in Malta, but it is actually a subsidiary of the Canadian company “Medgold Resources”.
10. Euro Lithium Balkan, Canada
The Canadian company “Euro Lithium Balkan” is researching potential deposits of lithium and pine on an area of almost 19,000 hectares in the vicinity of Valjevo, through a company of the same name registered in Serbia. The company was founded in 2015 under the name “GeoMin Consulting”. In the meantime, it changed its name to “Euro Lithium Balkan” and became the property of the mentioned company from Canada, BIRN writes.
Zijin Mining project is one of the many highly polluting Chinese investments
China’s Zijin Mining is polluting a village in southeastern Europe’s Serbia without permits, local consent or transparency, an environmental activist group claims.
Bor, in northeastern Serbia, is one of the Balkan country’s most polluted cities, according to Just Finance, a Dutch group that advocates for public budgets spent on development and infrastructure finance to contribute to sustainability.
The group said China’s Zijin Mining, which runs the city’s large-scale copper mining and smelting complex, is one of the many highly polluting Chinese investments undertaken “without the necessary environmental and social due diligence”.
“Since 2018, when the new owner of Bor smelter complex, the Chinese-owned Serbia Zijin Copper started its operations, the lives of the citizens in at least five villages in this area of Serbia have been upended,” the group said.
In an open letter this March the villagers of Ostrelj said Serbia Zijin Copper and Serbia Zijin Mining are expanding their activities, which threatens their health, private property, and livelihood.
In 2016, Zijin agreed to pump nearly $1.5 billion into the Serbian copper and gold project and paid $350 million for 63% of state-run Serbian miner RTB Bor Group.
The villagers are calling on the authorities to stop unauthorised construction and find a solution for residents living between old and new mines and hills of tailings. “When winds blow, the Ostrelj village is coated in toxic dust,” Just Finance said.
The villagers claim that the authorities have not developed a master plan that takes into account environmental impact.
Just Finance said an environmental impact assessment for one facility was put out for public consultation after it had already been built, Asia Financial writes.
Jadar could have made Serbia billions of dollars richer
Jadar could have made Serbia billions of dollars richer if not for voiding Rio Tinto’s lithium exploration licences in January. Serbians might have made the right decision after finding out the real plans of the project.
Europe’s largest lithium mine
The Jadar lithium project is Europe’s largest lithium mine, with a supposed $2.4 billion fund from Rio Tinto. The said lithium mine could produce 1 million electric vehicle (EV) batteries. However, locals of Jadar Valley opposed the project, not willing to sacrifice their land. They don’t want to replace their sweet and juicy raspberries and abundant bees with batteries for electric vehicles. Besides, the damages that mining will create are irreparable.
Rio Tinto found a new type of mineral called jadarite, containing borates and lithium. Jadarite was discovered in Jadar, hence the name of the mineral, in 2004. According to the giant mining company, these materials play a key role in the green transition. Lithium is important in manufacturing EV batteries. Borates, on the other hand, are useful in making wind and solar projects.
The supposed Serbia Jadar Lithium Project is one of the planet’s biggest greenfield lithium projects. Jadar’s high-grade nature and extensive deposit provide the possibility of a mine that can supply lithium for EVs for several decades. The abundance of boron and lithium deposits can make Serbia a key world producer.
If the project pursues, the initial mine’s commercial production is anticipated no earlier than 2027. The yearly production would be 58,000 tonnes of lithium carbonate and 160,000 tonnes of boric acid (B2O3
units). The production of sodium sulphate1, on the other hand, will be 255,000 tonnes.
Lies emerged about the Jadar Lithium Project
Gornje Nedeljice locals had peace of mind when the government decided to revoke Rio Tinto’s licence for mine jadarite. In fact, Serbian Prime Minister Ana Brnabic announced it herself.
However, not everyone is convinced, especially Marijana Petković, a local campaign group Ne Damo Jadar member. She said, “I want the western countries to have the green transition and to live like people in Jadar. But that doesn’t mean that we need to destroy our nature. We started to fight against the mine when they found out the company was lying to us for 14 years; when we found out how big the mine really is.”
There’s a prevailing scepticism about the cancellation of the Jadar lithium project. The government only nullified the project to end protests that could mess up the presidential and parliamentary elections (April 3). It could resume if there were reelection of the government.
“Once re-elected, we expect the SNS will maintain its pro-mining stance. The fact that the government has so far refused to consider a potential lithium mining ban in Serbia points in this direction. This gave environmental protests an anti-government element and proved to be a unifying force for the historically fragmented political opposition in Serbia,” said Capucine May, Verisk Maplecroft expert.
However, Rio Tinto repudiated that this wasn’t their intention. They said it was not their plan or didn’t fulfil any activities or actions to the project’s legal stature.
They say that what you don’t know won’t hurt you. But the truth will always find a way to reveal itself. Locals found out that Jadar Lithium Project won’t just take 20 hectares of land but 600 hectares! It’s almost the size of 10,000 tennis courts, European Views writes.
Locals don’t trust mining companies
Only red-roofed houses interrupt the vast carpet of fields that surround the village of Gornje Nedeljice, in western Serbia. To resident Marijana Petković, this is the most beautiful place in the world. She’s not against Europe’s green transition, the plan to make the bloc’s economy climate neutral by 2050. But she is among those who believe Serbia’s fertile Jadar Valley—where locals grow raspberries and keep bees—is being asked to make huge sacrifices to enable other countries to build electric cars.
Around 300 meters away from Petković’s house, according to the multinational mining giant Rio Tinto, there is enough lithium to create 1 million EV batteries, and the company wants to spend $2.4 billion to build Europe’s biggest lithium mine here. But Petković and other locals oppose the project, arguing it will cause irreparable damage to the environment. When asked about that claim, a spokesperson for Rio Tinto told Wired that throughout the project, the company has “recognized that Jadar will need to be developed to the highest environmental standards.” Petković is not convinced. “I want the western countries to have the green transition and to live like people in Jadar,” she says. “But that doesn’t mean that we need to destroy our nature.”
Officially, the Jadar mine is not happening. After months of protests against the project, the government conceded, and in January it was canceled. “As far as Project Jadar is concerned, this is an end,” Serbian prime minister Ana Brnabić said on January 20, after Rio Tinto’s lithium exploration licenses were revoked.
There is widespread suspicion, however, that the project was canceled to stop protests overshadowing the presidential and parliamentary elections on April 3, and could restart if the government is reelected. “This might have been a pre-election ploy,” says Florian Bieber, a professor of southeast European history and politics at Austria’s University of Graz. “I wouldn’t be surprised if the government picks up this issue again once the elections are done, because they see the economic benefits.” A Rio Tinto shareholder expressed a similar expectation to Reuters, adding they expect the mine to be renegotiated after the vote. Rio Tinto denies this is its intention and says it has not planned or implemented any activities contrary to the project’s legal status.
Europe has big plans to phase out fossil-fuel cars. In July, the European Union proposed a ban on the sale of new petrol and diesel cars by 2035. The bloc wants to replace those cars with electric vehicles, built with locally produced raw materials like lithium. The top lithium producers are currently Australia, Chile, and China. But Europe has ambitions to produce more of the materials it needs for electric cars at home. These materials “are extremely expensive to ship and are transported across the world several times over,” says Emily Burlinghaus, a fellow at the Institute for Advanced Sustainability Studies in Germany. “So it’s much cheaper and much safer to have these operations close to battery manufacturing plants or auto manufacturing plants.”
In the years that followed, activists say, Rio Tinto employees made an effort to immerse themselves in village life. They turned up to villagers’ weddings and celebrated religious holidays with them. Adverts were also beamed onto local TVs telling villagers if they work with Rio Tinto, together they could save the planet.
Relations with locals were good in these years, according to Petković, who is a member of the local campaign group Ne Damo Jadar. The villagers weren’t too worried when Rio Tinto said it wanted to build a modest mine on just 20 hectares. “They said it is going to be a modern mine that will not damage nature,” Petković says. But last year, locals discovered that plans for their village had drastically changed. Rio Tinto wanted to build on 600 hectares, nearly the size of 10,000 tennis courts.
“We started to fight against the mine when they found out the company was lying to us for 14 years; when we found out how big the mine really is,” says Petković. Environmental concerns also started to emerge.
The Guardian obtained a study, funded by Rio Tinto, which outlined how the mine would cause irreversible changes to ecosystems and local rivers. The study recommended “the abandonment of planned exploitation and processing of the mineral jadarite.”
It was at this point that local anger toward Rio Tinto ignited national frustration toward Serbia’s relationship with foreign mining companies. Investors are drawn to the small country because it borders the EU but does not have the same strict regulations, says Bieber.
In April, thousands of people took part in protests in the capital Belgrade that became known as Serbia’s “environmental uprising.” Those protests continued on and off through the rest of the year. The movement “is not about one company,” says Žaklina Živković, an activist with the Right to Water initiative, adding that the government plans to open 40 mines in the next 15 years, including seven lithium mines. “Rio Tinto is a metaphor for all of the different investors and all the mines that are being planned in Serbia,” Živković says.
Arriving soon after a year marked by protests, this weekend’s election was supposed to be the breakthrough movement for Serbia’s environmentalists, says Engjellushe Morina, senior policy fellow at the European Council on Foreign Relations. “Just as we were expecting that there will be a bit of a win for environmentally friendly movements in Serbia, we have the Russia debate,” she says, referring to Russia’s invasion of Ukraine.
She believes the return of war to Europe has empowered the ruling coalition parties and the incumbent president, Aleksandar Vučić. The ruling coalition which approved the mine, led by president Vučić’s Serbian Progressive Party, was comfortably leading in polls as of Thursday.
Back in the village of Gornje Nedeljice, Petković has the sense that Rio Tinto is not worried about the election’s outcome. She believes the company has invested too much to stop, whatever the result. The miner has created its own technology to extract the jadarite, which is found nowhere else in the world. Since the government canceled the project, Petković says, there have been no signs Rio Tinto is preparing to leave. The machinery stayed, and the miner kept buying up local real estate, she claims.
On March 30 another activist organization, Marš sa Drine, published the details of a phone call that they claim proves Rio Tinto is preparing to restart work on the mine after the election. The phone call was between a University of Belgrade professor involved in the Rio Tinto project and an anonymous source impersonating an employee of Rio Sava, Rio Tinto’s Serbian subsidiary. In the conversation, the two discuss the arrival of equipment from the German company DMT and an Austrian company called Thyssen, which the professor said is “likely” to arrive in April. Neither DMT, Thyssen, nor the professor replied to WIRED’s request for comment. In a statement, a Rio Tinto spokesperson described the “alleged” recording as “misinformation,” adding that the agreement with the two suppliers was signed before its permission for the mine was withdrawn.
“They lied to us in January,” Marš sa Drine said on Twitter, urging their followers to vote against the project on Sunday. “Why is any equipment, no matter whether it’s a bolt or a bulldozer, being discussed within the context of a project that has been canceled?”
Some believe that Rio Tinto has faced so much opposition in Serbia because of the company’s legacy, associated with multiple cases of environmental damage. “Mining companies have been viewed so negatively historically that it doesn’t matter in the eyes of the public if they are transitioning to minerals that are being used for the energy transition,” says Burlinghaus.
Resistance to EV mining across Europe is not Nimbyism, says Diego Marin, associate policy officer for environmental justice at the NGO the European Environmental Bureau. “Communities are saying, ‘We’re having our areas devastated and sacrificed to make what? Cars for rich people that our communities can never afford,’” he says. “In the end, we pay the price that our air gets cleaner but our land gets poorer.” It’s not that these activists don’t want clean air. But an idea is beginning to spread among green groups in Europe: that the green transition is turning into a capitalism rebrand that is still focused on planet-harming mass production.
“The purpose of the green transition is to make an industrial transition sound like it fits in with a solution to a problem that cannot be solved through industry,” says Bojana Novakovic, an activist with Marš sa Drine and also an actress.
Officials have tried to reassure Europeans that this is a new era of mining. “Mining in the past was a very dirty operation,” said Peter Handley, head of the European Commission’s raw materials unit, speaking at a conference on “green” mining in Lisbon last year. “It is becoming highly technological these days.”
But Europe’s environmentalists are divided on whether “green” mining is possible, even by new companies that are untarnished by their history. “I don’t care whether Mother Teresa wants to extract lithium from the Jadar Valley; she wouldn’t be doing it on my watch,” says Novakovic. “There is no green way to extract lithium from fertile soil. Period. It has never been done before”, Wired writes.
Lithium could help end the EU’s oil addiction
Europe’s desire to wean itself off fossil fuels and end its reliance on Russian energy is not only going to involve a sea change in consumer habits, but it is also going to require a lot of lithium.
Given that the Old Continent barely produces any of the metal: is it just swapping one dependency for another?
European leaders have extolled the virtues of the New Green Deal which plans for the 27-country bloc to become the first carbon-neutral continent by 2050. To achieve this, the EU aims to slash greenhouse gas emissions by 55% by 2030 compared to the 1990s level, bring emissions from new cars by 2035 down to zero and boost its share of renewables in the bloc’s energy mix to 40%.
Lithium is increasingly used for batteries in electronics from smartphones to television as well as to store energy produced by solar panels and wind turbines and in electric cars.
According to the World Bank, the production of minerals, such as graphite, lithium and cobalt, would need to increase by nearly 500% by 2050 in order to meet climate goals while EU officials estimate that to achieve climate neutrality by mid-century, the bloc will require 18 times more lithium than it currently uses by 2030 and almost 60 times more by 2050.
Yet, Europe only has one lithium mine, in Portugal, and the very vast majority of its needs is currently met by imports.
About 87% of unrefined lithium the EU sources comes from Australia — the rest from Portugal — while Chile, the US and Russia provide 78%, 8% and 4% respectively.
China is also a particularly big player. Although it has about an estimated 7% of the world’s reserves in lithium, 13% of the lithium extracted in 2019 was in China while over half of the lithium extracted that year was processed in the country.
More than 70% of the lithium-ion batteries that entered the market last year were produced in China.
Brussels is aware of this dependency and added lithium to its list of critical raw materials list in 2020.
A Commission spokesperson acknowledged to Euronews that “the production and refining of lithium are heavily concentrated in a handful of foreign countries, which raises our vulnerability to various supply risks.”
They added that “given the economic and technological relevance of this resource, as well as the external dependencies it generates, it is our responsibility to ensure that the European economy can benefit from a sustainable and resilient supply of lithium.”
“Although the EU will continue to cultivate its international partnerships, significant lithium extraction potential exists within our borders and its exploitation could create thousands of jobs. Developing local lithium mining and processing operations will not only enhance our strategic autonomy and reinforce our economy, but will also allow us to better monitor and contain the environmental impacts of mining industries, which are far more difficult to control beyond the EU’s borders,” they said.
Opposition to mines
There are currently 10 potentially viable lithium projects in the EU: three in Portugal, two in Spain and Germany each, with the remaining three in the Czech Republic, Finland and Austria respectively.
For Rene Kleijn, associate professor at the Institute of Environmental Sciences (CML) at Leiden University, “if all these plants become operational, it would probably be enough for our own supply.”
Problem solved, then? Well, not quite.
Getting all these projects off the ground will not necessarily be easy. A €2.2 billion lithium mine project in Serbia was shelved earlier this year after strong local opposition over environmental concerns. There is also fierce opposition to lithium mining in Portugal.
The mining process for lithium is primarily done in two ways. There is the traditional open-pit approach with the metal extracted from hard rock and the second one involves pumping huge amounts of underground water to the surface to remove lithium from the briny liquid that comes up as the water evaporates.
Both are seen as disruptive to the landscape and local population with a potential risk of air and water pollution. Using water to extract lithium is also controversial as water becomes more scarce in some areas due to climate change. Large parts of Portugal and Spain, for instance, have been suffering through a winter drought resulting in near-depleted reservoirs.
But there is a third, greener, way of mining lithium, called Direct Lithium Extraction and that is being implemented for the potential project in Germany. It relies on geothermal energy to pump the brine to the surface to allow for the extraction of lithium before being pumped back into the underground geothermal reservoir.
From extraction to production
Mining however is just the tip of the iceberg. Once extracted, lithium needs to be refined, batteries made and eventually recycled.
In fact, the latter is really where lithium shines.
“One of the largest sources of pollution in Europe and CO2 emissions is road transport,” Julia Poliscanova, Vehicles & e-mobility lead at Transport & Environment, a clean transport campaign group, told Euronews,
Transport generates about a quarter of the EU’s total emissions with road transport accounting for about 70% of them.
“The best way to decarbonise one of the largest climate problems is electrification, and for that, we need batteries. And for that, we need lithium.
“However, it is indeed important to stress that any mining, any raw material extraction, oil, nickel, lithium, gas comes with an impact. When it comes to lithium, the impact per car is significantly less so. When you have a car, you would burn 17,000 litres of oil over the use of that car,” she said.
“For a battery, an electric vehicle, you need about five or six kilogrammes of lithium that you can then recycle and reuse again and again. You just need to get it into your first batteries and then after some time, it can become a circular loop. So the impact of lithium is significantly less than the impact of oil.”
US and China move faster
But again Europe is running behind on the entire supply chain infrastructure.
The European Battery Directive of 2006 was written before lithium-ion batteries became increasingly prominent due to a more lukewarm approach towards fighting climate change then and thus did not set any targets for the recycling of lithium. Nowadays, almost no lithium is recovered in the EU, whereas recycling efficiencies are estimated at about 95 % for cobalt and nickel, and 80 % for copper.
“We could have anticipated this much earlier. For example, in the US we now have policies that basically come from Cold War times that are now being implemented by President Biden in order to secure supply chains for batteries, and electric vehicles,” Kleijn said.
Washington’s Defence Production Act allows the White House to exert control over domestic industries in times of crisis. It was used by President Trump to limit exports of medical goods at the start of the pandemic and by Biden to accelerate vaccination.
It has now once more been invoked by Biden “to secure American production of critical materials to bolster our clean energy economy by reducing our reliance on China and other countries for the minerals and materials that will power our clean energy future” including lithium, nickel, cobalt, graphite, and manganese.
“This is really like hard core state interference in the markets to make sure that your industries are able to survive and also are not dependent on autocratic states or other states that you might not want to be dependent upon. And this is not the kind of policies that Europe is famous for,” Kleijn argued.
“And I’m not even talking about China. I mean, in China, it’s completely state-operated. Large Chinese state-owned mining companies are involved in mining all of these materials all over the world, whether it’s cobalt in Africa or lithium in Australia. The biggest miner for the biggest Australian mining of lithium, for example, is one-quarter owned by a Chinese state-owned company. So you can see how the Chinese government is also heavily involved in securing the supply chains also overseas,” he added.
2030 and beyond
Investments are being made across Europe in battery production to curb reliance from abroad.
About 24 lithium-ion battery cells giga-factories were expected to open across the EU between 2021 and 2030. Tesla, for instance, opened its gigafactory in Germany last month.
The association of European Automotive and Industrial Battery Manufacturers now forecasts that the EU battery market value will grow from €15 billion in 2019 to an estimated €35 billion in 2030 — with lithium-ion accounting for about half — while the global market value will grow from €90 billion to 150 billion.
Still, even in the best-case scenario, with all potential mines opening by 2025, “I don’t see how Europe will achieve sufficiency in this decade,” Poliscanova flagged.
“But moving after 2030, depending on how smart our policy on recycling is, Europe can become self-sufficient,” she concluded, Euronews reports.
Rio Tinto faced a rude shock
On the face of it, there seems to be little in the way of connection between the treatment of Novak Djokovic by Australian authorities and the cooling of the Serbian government towards Rio Tinto. The Anglo-Australian mining giant was confident that it would, at least eventually, win out in gaining the permissions to commence work on its US$2.4 billion lithium-borates mine in the Jadar Valley.
In 2021, Rio Tinto stated that the project would “scale up [the company’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.”
The road had been a bit bumpy, including a growing environmental movement determined to scuttle the project. But the ruling coalition, led by the Serbian Progressive Party, had resisted going wobbly on the issue.
Then came the maligning of the world number one tennis player in Australia. Djokovic had been tormented by a brief spell of confinement in quarters normally reserved for refugees kept in indefinite detention, and eventually defeated in the Full Court of the Federal Court. During the course of events, he saw his visa cancelled twice, first by a member of the Australian Border Force, the next time by Immigration Minister Alex Hawke. Along the way, lynch mobs were thrilled that “Novaxx” Djokovic, that great threat to Australia’s vaccinated innocence, was finally on a flight home.
The Serbian government attempted to intervene. President Aleksander Vučić made a plea to the Morrison government to resist cancelling Djokovic’s visa; the Australian Open was the Serbian tennis player’s favourite tournament, one he had won numerous times.
A diplomatic incident, more murmur than bark, was sparked. “In line with all standards of international public law, Serbia will fight for Novak Djokovic,” promised the Serbian premier. But for an Australian government that has flouted international law and fetishized border control, the call mattered little.
In Serbia, Rio Tinto then faced a rude shock. The Vučić government, having praised the potential of the Jadar project for some years, abruptly abandoned it. “All decisions (connected to the lithium project) and all licenses have been annulled,” Serbian Prime Minister Ana Brnabić stated flatly on January 20. “As far as project Jadar is concerned, this is an end.”
Branabić insisted, somewhat disingenuously, that this decision merely acknowledged the will of voters. “We are listening to our people and it is our job to protect their interests even when we think differently.”
This is a bit rich coming from a government hostile to industry accountability and investment transparency. The same government also decided to begin infrastructure works on the jadarite mine before the granting of an exploitation permit. Such behaviour has left advocates such as Savo Manojlović of the NGO Kreni-Promeni wondering why Rio Tinto was singled out over, for instance, Eurolithium, which was permitted to dig in the environs of Valjevo in western Serbia.
Zorana Mihajlović, Serbia’s mining and energy minister, preferred to blame the environmental movement, though the alibi seemed a bit forced. “The government showed it wanted the dialogue … (and) attempts to use ecology for political purposes demonstrate they (green groups) care nothing about the lives of the people, nor the industrial development.”
Rio Tinto had been facing an impressive grass roots militia, mobilised to remind Serbians about the devastating implications of proposed lithium mining operations. The Ne damo Jadar (We won’t let anyone take Jadar) group has unerringly focused attention on the secret agreements reached between the mining company and Belgrade. Zlatko Kokanović, vice president of the group, is convinced that the mine would “not only threaten one of Serbia’s oldest and most important archaeological sites, it will also endanger several protected bird species, pond terrapins, and fire salamander, which would otherwise be protected by EU directives.”
Taking issue with the the unflattering environmental record of the Anglo-Australian company, numerous protests were organised and petitions launched, including one that has received 292,571 signatures. Last month, activists organised gatherings and marches across the country, including road blockades.
Djokovic has not been immune to the growing green movement, if only to lend a few words of support. In a December Instagram story post featuring a picture of anti-mining protests, he declared that, “Clean air, water and food are the keys to health. Without it, every word about health is redundant.”
Rio Tinto’s response to the critics was that of the seductive guest keen to impress: we have gifts for the governors, the rulers and the parliamentarians. Give us permission to dig, and we will make you the envy of Europe, green and environmentally sound ambassadors of the electric battery and car revolution.
The European Battery Alliance, a group of electric vehicle supply chain companies, is adamant that the Jadar project “constituted an important share of potential European domestic supply.” The mine would have “contributed to support the growth of a nascent industrial battery-related ecosystem in Serbia, contributing to a substantial amount to Serbia’s annual GDP.” Assiduously selective, the group preferred to ignore the thorny environmental implications of the venture.
The options facing the mining giant vary, none of which would appeal to the board. In a statement, the company claimed that it was “reviewing the legal basis of this decision and the implications for our activities and our people in Serbia.” It might bullyingly seek to sue Belgrade, a move that is unlikely to do improve an already worn reputation. “For a major mining company to sue a state is very unusual,” suggests Peter Leon of law firm Herbert Smith Freehills. “A claim under the bilateral treaty is always a last resort, but not a first resort.”
Another option for punters within the company will be a political gamble: hoping that April’s parliamentary elections will usher in a bevy of pro-mining representatives. By then, public antagonism against matters Australian will have dimmed. The Serbian ecological movement, however, is unlikely to ease their campaign. The age of mining impunity in the face of popular protest has come to an end.
Rio Tinto is on rocky ground in Serbia at the moment
Australian mining giant Rio Tinto (ASX: RIO) is on rocky ground in Serbia at the moment as continued environmental protests put pressure on the government to suspend its planned $3.34 billion lithium mine.
The development is part of Serbia’s efforts to introduce investment and boost economic growth, but activists have staged protests and blocked roads including in the capital of Belgrade. The protestors not only want to ban lithium extraction by Rio, but any other company.
On Saturday, international reports quoted Serbian Prime Minister Ana Brnabic as saying the government was close to accepting all requests from environmentalists and may soon decide to annul all contracts related to the US$2.4 billion (A$3.34 billion) project.
“We have worked in a transparent way, we have listened to the people,” Ms Brnabic said.
Land allocation scrapped last month
Rio is proposing to develop the lithium and borate mine near Loznica in the western Jadar Valley, but the local municipality scrapped a plan to allocate land for it a few weeks ago.
At the time, international reports quoted the chief executive officer of Rio’s Serbian arm Rio Sava Exploration, Vesna Prodanovic, as saying a pause will enable the company to engage in a public dialogue about the project in a bid to “reconsider and possibly improve” technical solutions for the mine.
Despite Rio stating any development would meet all domestic and European Union environmental standards, green groups continue to say the project will cause irreparable damage to the area.
The protests are also problematic for President Aleksandar Vucic ahead of April elections. Mr Vucic has repeatedly declared that opening the mine would depend on the outcome of an environmental study and a referendum.
Rio Tinto to acquire Argentinian lithium project
The green pushback in Serbia isn’t stopping the major miner from pursuing other international lithium opportunities, with the company announcing its intention to buy the Rincon lithium project in Argentina for $825 million.
Last month, Rio entered into a binding agreement to acquire the project from Rincon Mining, a company owned by funds managed by the private equity group Sentient Equity Partners.
Rincon is a large, undeveloped lithium brine project located in the ‘lithium triangle’ in Argentina’s Salta province. The project is regarded as a long-life, scalable resource capable of producing battery-grade lithium carbonate and Rio claims it has the potential to have “one of the lowest carbon footprints in the industry”.
“This acquisition is strongly aligned with our strategy to prioritise growth capital in commodities that support decarbonisation and to continue to deliver attractive returns to shareholders,” Rio chief executive officer Jakob Stausholm said.
Once acquired, Rio plans to firm up a JORC compliant resource for the project and undertake work to determine strategy and timing and secure updates to existing environmental impact assessment permits to allow development and production.
The project is currently held through an Argentine branch of an Australian company and as such, completion of the transaction is conditional upon approval by Australia’s Foreign Investment Review Board (FIRB). The acquisition is expected to be completed in the first half of 2022.
How much has Rio Tinto invested in Serbia so far and why is it “pumping” costs
The management of “Rio Tinto” points out that the “Jadar” project is transparent, but the exact amount of funds, intended for lithium and pine mining and mine start-up, has not been published, although according to the submitted study it can be concluded that the budget was prepared in advance.
Miroslav Mijatović, from the Podrinje Anti-Corruption Team (PAKT), notes for “Nova” that the main question is why “Rio Tinto” hides the costs of previous investments and that there is a real fear that the costs will be artificially increased to add value to the project.
In the period from 2004 to 2020, “Rio Tinto” invested 209.1 million US dollars in the costs of field geological works, according to the documents of this company, obtained by the daily “Nova”.
– What is worrying is the data from the Elaborate, from which it can only be concluded that the final investment figure of “Rio Tinta” is slightly more than 200 million dollars. However, we have heard that over 450 million euros have been invested this year alone, although no work has been done on the ground throughout the year – warns Mijatović.
– In the study, almost all data on investments are obscured. There is a real fear that “Rio Tinto” will “wake up” investments, because the ore rent for lithium and boron is charged in the amount of five percent of net income – our interlocutor explains and adds that it is realistic to imagine a situation in which “Rio Tinto” will not show actual profits until the investment pays off.
According to earlier announcements from this company about the amount of lithium and boron production, Serbia would receive about seven million euros a year, along with 23 million, which would follow from the profit tax.
Commenting on the mentioned data, Mijatović states that, in the best scenario, Serbia will remain without ore rent for at least five years.
In a statement given last Monday, Serbian President Aleksandar Vucic pointed out that the “Jadar” project would not be withdrawn.
“That project is standing still and will not move anywhere. They brought him, and we did everything that the people asked for, and that’s it, “he said, without explaining why, although it is a request of the citizens, the state is not giving up on this project.
Lack of information and insufficient transparency, ie vagueness of the top of the state and the management of the company “Rio Tinto”, contributed to the debate in which the question dominates whether the government does not give up the “Jadar” project, due to possible penalties that Serbia would pay.
On the other hand, Mijatović points out that he is convinced that the citizens of Serbia will not return the money to “Rio Tinta”, and that it is unbelievable that compensation for damage is being mentioned now.
– Now some bilateral agreements are mentioned, and “Rio Tinto” persistently hides costs from the public. I would rather say that someone individually promised help to this company and took money for it. If you take a good look, you will see that the laws in the last 15 years have been compared because of them – concludes Mijatović.
A study on the resources and reserves of boron and lithium in the Jadar deposit near Loznica, prepared by Rio Tinto and adopted by the Ministry of Mining and Energy on January 6 this year, states that this multinational company has invested more than $ 200 million to cover the costs of field geological works, which include exploratory drilling for all programs, laboratory analysis, testing, as well as the costs of the project team and study work.
Although this document shows how much has been invested so far in geological research and that there is a predetermined figure for exploitation, “Rio Tinto” has not yet disclosed data on how much money is intended for exploitation.
Where is the cost of mining circuit infrastructure
“Capital costs of exploitation consist of the costs of mining works, the costs of mining infrastructure and facilities on the surface. The latter include facilities, installations and works on the surface of the terrain that are not covered by the costs of exploitation, ie preparation of mineral raw materials. “These are costs for the construction of mining facilities, such as offices, bathrooms, workshops, internal roads and other infrastructure on the surface of the terrain that is not included in other cost items,” the Rio Tinto document states.
Thousands of protesters blocked roads across Serbia due to the arrival of Rio Tinto
Crowds chanted slogans condemning government of Aleksandar Vučić, which backs planned Anglo-Australian $2.4bn mine
Thousands of demonstrators blocked major roads across Serbia on Saturday as anger swelled over a government-backed plan to allow mining company Rio Tinto to extract lithium.
In the capital, Belgrade, protesters swarmed a major highway and bridge linking the city to outlying suburbs as the crowd chanted anti-government slogans while some held signs criticising the mining project.
Smaller protests were held in other Serbian cities, with small scuffles between demonstrators and counter-protesters in Belgrade and the northern city of Novi Sad, according to local media reports.
“They allowed foreign companies to do whatever they want on our land. They put us on a platter for everyone who can just come and take whatever they want,” said Vladislava Cvoric, a 56-year-old economist, during the protest.
Serbian tennis player Novak Djokovic shared a photograph of the protest on Instagram and commented that “clean air, water and food are keys to health”.
“Without that, every word about ‘health’ is obsolete,” Djokovic said.
The protests followed similar demonstrations last week, during which masked men attacked one gathering in western Serbia’s Sabac – sparking outrage on social media and accusations the government was using hooligans to suppress the movement.
Substantial deposits of lithium – a key component for electric car batteries – have been found around the western town of Loznica, where the Anglo-Australian company is buying up land but is still awaiting the final green light from the state to begin mining.
Rio Tinto discovered lithium reserves in the Loznica region in 2006.
The company intends to invest $2.4bn (€2.12bn) in the project, according to Vesna Prodanovic, director of Rio Sava, Rio Tinto’s sister company in Serbia.
Critics have accused president Aleksandar Vučić’s government of setting the stage for illegal land appropriations and ignoring environmental concerns.
The demonstrations come months ahead of likely national elections in 2022, with critics of the protests accusing organisers of stirring controversy to undermine Vučić before the polls.
Thousands of protesters in Belgrade and other Serbian towns blocked main roads and bridges Saturday to decry a planned lithium mine