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.

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.

Serbia is an important source of rare minerals

Today, mining is an important factor in economic activity and growth in Serbia, and at the beginning of this year, this branch of industry contributed 2.6% to GDP in the first quarter and 2.3% in the second quarter, said the Minister of Mining and Energy, Dubravka Đedović. during the address at the conference “Mineral resources of Serbia, sustainable growth through responsible mining”, according to the Government’s website.

Also, as she added, mining records a higher growth rate than industrial production, because from January to July this year, compared to the same period in 2021, industrial production increased by 2.7%, while mining grew by more than 30%, which is the result of increased investments, especially in exploitation and processing in the copper mine.

According to her, 27,000 people were employed in the mining sector in 2021, of which 8,500 were employed in metal mines, with a tendency to increase that number.

As stated, “currently, geological research is carried out in Serbia on 178 exploration fields, of which 120 are fields of metallic raw materials, among others, copper, gold, lead, zinc, silver, two exploration fields of energy raw materials, and 56 fields where they are researching non-metallic raw materials”, Đedović specified.

Serbia is rich in mineral resources, primarily copper, gold, silver, lead, zinc, borates and lithium, she stressed and added that in the era of modern technologies, mineral resources are “the basis of the development of modern society” and “a necessary prerequisite for the existence of modern civilization”.

Mining activity in the context of the country’s energy independence and further economic growth is not a matter of choice, but an inevitability. The state’s task is to, together with mining, use the wealth we have in a rational, responsible and sustainable way, respecting nature and taking care of the communities it has an impact on, the minister said, according to the official website of the Government, eKapija 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.

Serbian mining sector records biggest growth in exports

From January to the end of August this year, Serbia’s exports increased by 26.2 percent, but mostly thanks to the rise in prices of exported goods which went up by 20.5 percent, while the quantity of export products increased by only 4.7 percent, according to the data from the State Statistics Office (RZS).

The same thing can be said for imports. The total value of imports increased by 34.5 percent in eight months, but the prices of imported goods went up 25.3 percent while the quantity of imported goods increased by 7.4 percent.

In terms of economy’s sectors, the export of raw materials went up the most (92.4 percent), with the quantity of exported raw materials going up by 70 percent, and the price only by 13.3 percent. On the other hand, the quantity of fuel exports decreased by 16 percent, while the quantity of exported fuel went up by 83 percent and their price by 53 percent.

The same situation was in the food sector, whereby the quantity of exported products declined by 12.3 percent, but due to a 25.8 percent increase in prices of exported goods, its value increased by 10.3 percent in total. Imported fuel also became more expensive (by 83.5 percent), and with a quantitative growth of imports of 24 percent, the total value of imported fuel in eight months of 2022 increased by as much as 128 percent.

The mining sector recorded by far the largest increase in exports – 185.6 percent – with exports of metal ore going up as much as 190 percent. This growth is mainly due to the higher exported quantity (167.7 percent). Serbia did not benefit much from the rise in metal prices, as the price of exported ore increased by only 8.4 percent, Serbian Monitor 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.

Terra Balcanica adds prospective gold exploration license to its Serbian portfolio

Terra Balcanica Resources Corp. (“Terra” or the “Company”) is pleased to announce the granting of the Ceovishte exploration licence by the Serbian Ministry of Energy and Mines. The new licence held by the Company’s 100% owned subsidiary Tera Balkanika doo covers 80.36 km2of highly prospective land for gold and copper exploration in the historic Raska mining district of southern Serbia.

Highlights

Commenting on the acquisition of the new licence area, Dr. Aleksandar Mišković, the President and CEO of Terra Balcanica Resources Corp.stated: “We are delighted to have been granted a sizable new licence areain Serbia. Acquisition of such prospective ground is core to our strategy of building a regional, multi-jurisdictional portfolio in the Western Balkans. By bringing Ceovishte into our portfolio we expanded our Serbian footprint by 160% to 130 km2 in addition to 216 km2 held in Bosnia-Herzegovina at our high-grade, polymetallic Viogor-Zanik project. We are excited by the geological potential of Raska where we have now gained exposure to both gold and copper with Ceovishte. The new licence is found in the vicinity of Adriatic’s Kiževak and Sastavci Pb-Zn minestogether with its Cu-focused exploration property at Suva Ruda-Rudnicaand north of numerous historic lead-zinc-silver mines in the north of theSerbian province of Kosovo. Significantly, the most prospective area for high grade gold located in the northwesterly quadrant of Ceovishte isconcealed by a thin overburden and has not seen any historical drill testing. This provides us with a unique exploration upside to search beneath a shallow cover resulting in quick drill target definitions. Our field crew has been dispatched to the locality to conduct sampling for soil geochemistry and we will provide updates on the field work very shortly.

Geological Setting of the New License

Ceovishte sits on the southern slopes of the Golija Mountain, a part of the Kopaonik metallogenic zone. This area features the Kiževak and Sastavci Pb-Zn-Ag mines including the Karadak deposit, all owned by Adriatic Metals plc. The historical Yugoslav GKZ, non-NI 43-101 compliant resource estimates for Kiževak is 3.9 Mt of ore grading 3.92% Zn, 2.15% Pb and 31 g/t Ag in the A+B+C1 categories (www.adriaticmetals-serbia.com/our-projects/kizevak) while at Sastavci, there is 1.6 Mt of ore grading 4.55% Zn, 2.8% Pb, 30 g/t Ag and 0.5 g/t Au also divided in the Yugoslav A+B+C1+C2 categories (www.adriaticmetals-serbia.com/our-projects/adriatic-metals-serbia-sastavci). The Raska mining district also holds the Rudnica Cu-Au porphyry district and is a northerly extension of the partially exploited world class Trepča Pb-Zn-Ag skarn deposit of Kosovo, the northern Serbian autonomous province as seen in Figure 1. Trepča features a non-NI 43-101 compliant, Yugoslav resource estimated at 60.5 Mt at 8% Pb+Zn and >159 Moz of Ag.

About the Company

Terra Balcanica is a polymetallic exploration company targeting large-scale mineral systems in the Balkans of southeastern Europe. The Company has 90% interest in the Viogor-Zanik Project in eastern Bosnia and Herzegovina, 100% of the Kaludra and Ceovishte mineral exploration licences in Serbia. The Company emphasizes responsible engagement with local communities and stakeholders. It is committed to proactively implementing Good International Industry Practice (GIIP) and sustainable health, safety and environmental management.

Autionary Statement

This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively forward-looking statements). The use of any of the words will, “intends” and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such forward-looking statements should not be unduly relied upon. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. The Company believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. The Company does not undertake to update these forward-looking statements, except as required by law, Yahoo Finance writes.

Zijin triples production at Serbian copper complex

Bor, in north-eastern Serbia, is one of the country’s most polluted cities. While local people protest their toxic air and water, Chinese mining company Serbia Zijin Copper, which runs the city’s large-scale copper mining and smelting complex, is expanding its operations without permits, local consent or transparency. Zijin 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. In an open letter this March the villagers of Ostrelj state that the two companies, Serbia Zijin Copper and Serbia Zijin Mining, are expanding their activities threatening their health, private property, and livelihood.

The villagers are calling on the authorities to stop unauthorized construction and find a solution for all the residents who are trapped between the old and new mines and hills of tailings. When winds blow, the Ostrelj village is coated in toxic dust.

The villagers claim that the authorities have not developed a master spatial plan that would describe the future of their village and delineate the mining complex on their territory and describe the environmental impact and the purpose of facilities that Chinese had been building without permits. An environmental impact assessment for just one facility was put out for public consultations after it had already been built.

According to the villagers and research conducted by the Serbian Renewables and Environmental Regulatory Institute (RERI), the Chinese investors have been getting away with construction conducted without legally required documents and permits.

Meanwhile, Zijin’s mining operations are extending its reach on their territory while the local community representatives say that they are kept in the dark by the local as well as national authorities.

The villagers therefore demand a moratorium on further mining activities before the authorities have created a master spatial plan for relocation of their and six other affected villages and called on Zijin to undertake all protection measures to prevent their further poisoning by toxic dust.

“The Serbian state should stop all the mining activities in Bor and all the constructions that have been implemented without a permit. We also need adequate resettlement plans for the villagers before the work can continue”, said Zvezdan Kalmar, director of the Serbian environmental organizations the Centre for Ecology and Sustainable Development (CEKOR).

The gradual weakening of legal requirements for Chinese investments in Serbia is alarming.

A legal analysis by RERI and Just Finance International shows that China’s influence had an overall negative impact on the legal system in the country. Its business activities increased the number of loopholes in the law, which made exceptions for highly polluting large-scale infrastructure investments, predominantly from Chinese enterprises or financed by Chinese state loans.

The problems have also been addressed in a resolution from the European Parliament 2021.The European Parliament called on Serbia to strengthen its legal compliance standards for Chinese business activities and sent a warning to Belgrade that its behavior is jeopardizing the country’s European accession process.

For several years now, both the Serbian government and the Chinese company have ignored the legal irregularities of the Zijin copper mining and smelter projects.  However, some attempts have been made to address the problems in Bor.

For example, in April 2021, Serbian authorities suspended construction work at the Jama mine, core to Bor’s operations, after the company failed to comply with environmental standards. In April 2022, after thousands gathered to protest the project in Belgrade, Serbian authorities halted the operations of Zijin citing environmental pollution. But the attempts did not satisfy the protesting citizens and are regarded as temporary solutions without dealing with the fundamental problem of the operations.

The affected villagers call the government for transparency. They claim that the monitoring of ongoing mining and production activities that could put their lives in peril remain to be ignored by both the Serbian authority and the Chinese who operate Bor cooper mine.

One major uncertainty is what impact the Zijin operations will have on the Krivelj river. The river is of utmost importance for the livelihood of the farming community and the villagers’ fears that Zijin is actively working to change the course of the river since it is blocking their way for a new tailing dam.

The waste from Serbia Zijin Copper operations is deposited on an old dam under which was built a tunnel that secures the Krivelj river’s flow to Ostrelj village. In the end of 2021, the drainage tunnel showed cracks and local media report that toxic substances have leaked into the river. This weakness in critical structure have been identified more than a decade ago, but the authorities failed to tackle them.

In 2007 Serbia started negotiations with the World Bank to build a new drainage system for wastewater to clean that dam. But the country never took to the loan and the project was shelved by 2015. Now, with Zijin expanding its operations more than two times compared with the past and the problem with the dam is still not solved.

The dam holding the toxic waste represent environmental hazard that could not only endanger villages around Bor such as Ostrelj, but also regional capital Zajecar and the town of Negotin. The spill could roll further downstream into the Timok river and all the way to Danube, causing transboundary pollution in Romania and Bulgaria.

So far, the Serbian government, which owns a stake in one of the two locally owned companies has turned a blind eye to various violations of the procedures and Zijin is not making any serious attempts to mediate with the citizens in Bor. Now the pollution is reaching new records in Bor. The expansion of smelter activities has led to an average annual increase of carcinogenic arsenic in air for 10 times over the threshold, according to Serbian experts.

The open letter from the villagers in the Zijin-affected communities Ostrelj was addressed to all the major stakeholders in Serbia including the president Aleksandar Vucic. The villagers feel they have been kept in the dark from the decisions for the expansion of Zijin’s mining operations, fearing the impacts, as well as how they feel as “foreigners in their own country”.

Zijin´s operations in Serbia are among the biggest copper mining operations in Europe and the copper is the number one export product from Serbia to China. Yet, Serbia is only getting 5 percent royalties from Zijin´s revenues which is one of the lowest royalties for mining operations in Europe.

Zvezdan Kalmar believe that the lack of royalties is a problem for Serbia.

“Without this money we won’t be able to regulate and control the negative impact of the mining activities at all”, he said, Just Finance International 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.