Adriatic’s Balkans project construction
The London-based company, which is also listed on the London Stock Exchange, Adriatic Metals has successfully cleared the final major regulatory approval hurdle that now opens the way for it to start construction of its proposed Vares silver-zinc-lead mining and processing operation in Bosnia and Herzegovina later in the year. The company says it clinched the all-important exploitation, or mining, permit for the project’s cornerstone Rupice underground deposit from the country’s Federal Ministry for Energy, Mining and Industry following a public hearing in Vares earlier this month.
It caps off a remarkable turnaround time by Adriatic of just over four years between “discovery” of Vares and the project being fully permitted.
Rupice underpins the proposed Vares development, which has a current forecast capital cost of US$173 million.
Latest stated probable ore reserves for Vares’ Rupice underground and Veovaca open-pit deposits stand at 11.12 million tonnes at average grades of 149.6 grams per tonne silver, 1.28 g/t gold, 4.22 per cent zinc, 2.67 per cent lead and 0.43 per cent copper.
Of the overall reserves, the Rupice deposit accounts for 8.41Mt grading an average 179 g/t silver, 1.66 g/t gold, 5.04 per cent zinc, 3.18 per cent lead and 0.55 per cent copper.
That equates to 48.4 million ounces of contained silver, 450,000 ounces of gold, 420,000 tonnes of zinc, 270,000t of lead and 50,000t of copper – out of the Vares reserves contained metal content totals of 53.5 million ounces of silver, 460,000 ounces of gold, 470,000t of zinc, 300,000t of lead and 50,000t of copper.
Adriatic’s pre-feasibility study or “PFS” on Vares released last year shows the reserves sustaining production for an initial 14-year life of mine, with concentrate output for the first five years of operations averaging 15.3 million ounces of silver-equivalent per annum based on plant ore throughput of 800,000 tonnes per annum.
For the main Vares construction stage to be allowed to go ahead, Adriatic needed the exploitation licences for both the Rupice underground and Veovaca open-pit deposits, with the latter including permitting covering the proposed Vares processing plant.
Rupice is situated about 12km west-north-west of Veovaca.
The $540 million market-cap company, which received the Veovaca exploitation permit about six months ago, says the Rupice permit represents the last of the key regulatory approvals.
Timing of permitting approvals for the two deposits varied due to Rupice being a greenfields deposit and Veovaca a brownfields site.
Management envisages construction at Vares commencing in earnest some time during the December quarter this year after delivery of a definitive feasibility study and an environmental and social impact assessment in coming weeks.
Vares, centred around the town of Vares about 50 minutes’ drive from the Bosnia and Herzegovina capital, Sarajevo, is perched in a mountainous area of widespread forests and meadows.
Veovaca is a historic open-cut mine that produced lead, zinc and barite concentrates and ceased operations 33 years ago.
Adriatic plans to build most of the processing plant and associated infrastructure at the brownfield Veovaca mine site and to carry out underground mining and partial tailings backfilling at Rupice.
Economic estimates in the PFS featured a sterling average EBITDA of about US$251 million per annum for the first five years of metal concentrate production, a net present value for the project of US$1.04 billion and an internal rate of return of 113 per cent.
All-in sustaining costs for Vares across the initial mine life have been extrapolated to average $US120 per tonne milled and the capital cost payback period from production start-up has been put at an eye-catching 1.2 years.
Raw materials mining deal in the Balkans
The keyword for the 2020s is definitely transformation. All of the world’s regions have started to experience the seriousness of the climate crisis, and there’s no doubt that the economy, trade and societies need to become more resilient and less exploitative. The steps needed for this transformation have been set forth in the 2030 UN Sustainable Development Goals (SDGs). Governments are called on to improve economic productivity through sustainable practices, such as diversification and environmentally-sound technological upgrades, while seeking to decouple economic growth from environmental degradation; protect natural resources through improved management and use, including in companies; protect human health from pollutants and hazardous contaminants; and halt habitat and biodiversity loss and species’ extinction.
Europe wants to be the first continent to become climate neutral by 20501 and the leader in ensuring that all of the world’s ecosystems are restored, resilient and adequately protected by 20502. The European Union has declared its ambition to halt, and as much as possible reverse, the pressure humans put on the planet’s resources, ecosystems, climate and biodiversity. However, as the green agenda to reach these ambitions becomes more defined, it reveals that despite the long-term goal of reducing the demand for resources and fossil fuel consumption, Europe plans to continue its exploitative model of mining raw materials in the EU and around the world. The European Commission introduced the European Green Deal in December 2019 as a way to turn the urgent climate challenge into a unique opportunity for the transformation of the economic and societal system. The sourcing and production of raw materials were included in the Green Deal:
Access to resources is also a strategic security question for Europe’s ambition to deliver the Green Deal. Ensuring the supply of sustainable raw materials, in particular of critical raw materials necessary for clean technologies, digital, space and defence applications, by diversifying supply from both primary and secondary sources, is therefore one of the pre-requisites to make this transition happen.
Although this excerpt from the Commission’s communication on the Green Deal emphasises sustainability, it also introduces a key tension between that sustainability and security. Which will be prioritised? Will Europe try to solve the climate crisis by exacerbating the biodiversity, resource and poverty crises, or will the new EU policies stemming from the Green Deal manage to propose a holistic approach to all of these? Who will make use of this transition opportunity, and will it benefit only European citizens, or will other societies also benefit?
EU decision makers have advanced the furthest on reaching their climate neutrality target, and swiftly-implemented changes to infrastructure such as smart grids, energy storage systems and e-mobility have already increased the demand for raw materials. The Commission has given itself until 2025 to make a plan to clean up the industry’s supply chains. We welcome the increasing confidence in the feasibility of Europe’s decarbonisation, but we are greatly concerned about the lack of safeguards which would make this decarbonisation truly sustainable. Very little has been done so far to ensure that, to paraphrase the narrative of the Commission, no one will be left behind.
CEE Bankwatch Network, along with its members and partners, has been monitoring investments in raw materials mining backed by public funds in the EU and around the world for years. This work has shown that despite the EU’s stated ambitions when it comes to changing the energy paradigm or reversing biodiversity loss, there’s still a lot to be done to stop harmful practices in the mining sector, especially in cases where such practices are supported by the EU taxpayers.
The European Commission’s agenda is sound, but to be effective it has to counterbalance the procurement of the raw materials indispensable for the green and digital revolution with safeguards for the people affected by raw materials mining and for the nature destroyed by the overwhelming pressure for cheap and fast exploitation. Therefore, the Commission must be even more ambitious and incorporate policies that ensure the use of less-exploitative and toxic-safe technologies; the restoration of the old mining sites; strict environmental, social and human rights due diligence for mining projects; and finally, the right for the communities affected by the mines and surrounding facilities to have a say. The EU cannot attempt to overcome the climate crisis at the expense of local communities, workers’ rights and biodiversity, especially in the face of the COVID-19-induced economic and social crisis. It would be a raw deal, one experienced too often in the past, which should finally be left far behind.
The European Green Deal: impossible without raw materials
Despite both the scientific consensus regarding the massive destruction to the planet caused by the current economic paradigm and the high-level attempts to address its effects, be it the SDGs agenda, the Paris Agreement or ambitions to reverse biodiversity loss, the global consumption of biomass, fossil fuels, metals and minerals is expected to double in the next 40 years4 and annual waste generation is projected to increase 70% by 20505. In 2019, the European Commission launched several strategic documents to align the European economy with the Paris climate agreement targets and the SDGs. One of them was the European Green Deal – the EU’s growth strategy – which is aimed at positioning Europe to become the world’s first climate-neutral continent by 2050 and to decouple economic growth from resource use. To ensure that the economy will actually give back to nature more than it takes away, the Green Deal requires a new policy framework.
The EU Industrial Strategy, presented in March 2020, identifies the main tool of the green agenda: digitalisation. Digital technologies such as artificial intelligence, 5G, cloud and edge computing and the Internet of things are indispensable for climate solutions – be it electric transport, smart houses or remote working. Digitalisation sounds like a clean, almost utopic, solution, but in reality, making the EU digital requires the rather dirty mining of gold, copper, lithium and other metals, as well as smelters for those metals and a complex, non-transparent information and communication technology (ICT) supply chain.
The EU’s new Circular Economy Action Plan aims at accelerating the transformational change required by the European Green Deal. The Plan lists key products’ supply chains, among them the supply chain for electronics and ICT. This industry is tackled in the Plan as waste-producing only; however, it has a very non-transparent and heavily impactful supply chain, starting with the raw material mines, and stretching to smelters and complicated manufacturing networks. With an expected annual growth of 9.6% by 2022, the ICT sector is one of the fastest-growing industries. Currently, the sourcing of the raw materials used in ICT is almost impossible to trace, and it is increasingly obvious that raw materials mining is associated with human rights abuses, socio-ecological conflicts and violations of labour rights and standards.
The untraceable ICT supply chain
The official supply chain data published by global brands such as Apple, Dell, HP and Samsung shows the full lists of smelters and refineries used by these companies. But that’s where the very limited transparency of the big brands’ supply chains ends. They claim that they are not able to determine the sources of the raw materials refined in the smelters which are part of their supply chain. In its Conflict Minerals Report, Apple claims:
Apple conducts robust due diligence on the source and chain of custody of 3TG in its global supply chain but does not directly purchase or procure raw minerals from mine sites… The challenges of tracking specific mineral quantities through the supply chain continue to impede the traceability of any specific mineral shipment through the entire product manufacturing process.
Similarly, Dell in its Responsible Minerals Sourcing Report says: Dell supports, respects and upholds the internationally-recognised human rights of all people, including all internal team members and those in our supply chain. Ensuring the responsible sourcing of minerals is also part of this global approach. Although we do not use minerals in their raw form or purchase them directly from mining companies or smelters, we engage our supply chain to perform due diligence.
Among the smelters mentioned in the official lists published by the world’s leading ICT brands, there were four situated in Kazakhstan. CEE Bankwatch Network, in cooperation with a Kazakh journalist, attempted to trace the connections between the global brands and mines in Kazakhstan providing the raw materials for ICT. In the course of the investigation, connections between three mines and the smelters used by global ICT brands were uncovered and mapped, but it was ultimately not possible to provide proof of these connections. This exercise confirmed an open secret: this part of the supply chain is the blind spot of the whole industry. It is of utmost importance to make the ICT supply chain fully transparent, in part to ensure that the electronic products, one of the foundations of the new EU green and digital approach, are not connected with conflicts, human rights abuses or environmental destruction.
Global brands underline their financial support for different kinds of initiatives aimed at better understanding the impact of the industry on the lives of people working and living in mining communities. They also support whistle-blower initiatives to empower independent, local voices to raise issues and report incidents at the mine-site level. But until the ICT supply chain is fully traceable, this support will only be a corporate social responsibility exercise without the companies taking real responsibility for the impact of their business.
The Critical Raw Materials Resilience of the EU: at odds with sustainability
Raw materials mining is associated with risks concerning human rights abuses, socio-ecological conflicts and violations of labour conditions. Many rare metals are located in countries with risky political contexts: tin, tungsten, tantalum and gold are often referred to as conflict minerals, the extraction of which has been fuelling war in the Democratic Republic of the Congo for several years. In September 2020, the Commission launched a communication10 regarding the Critical Raw Materials Resilience of the EU. It indicates that ‘resilience’ for the EU simply means securing raw materials’ supply by negotiating trade agreements or seeking to eliminate trade distortions. EU demand for these minerals is projected to increase, but concrete measures to address the human rights and environmental concerns about mining and the mineral supply chain have not been addressed. A foresight Study on Critical Raw Materials for Strategic Technologies and Sectors in the EU published together with the communication gives the critical raw materials outlook for 2030 and 2050 for strategic technologies and sectors.
For electric vehicle batteries and energy storage, the EU would need up to 18 times more lithium and 5 times more cobalt in 2030, and almost 60 times more lithium and 15 times more cobalt in 2050, compared to the current supply to the whole EU economy. If not addressed, this increase in demand may lead to supply issues.
Mines that are currently under exploration or already operating show the wide range of impacts mining can have on the environment and people, which cannot be neglected in the race to secure the supply of minerals. In response to the strategic directions proposed by the Commission at the Raw Materials Initiative, namely to ‘accelerate and facilitate procedures’ for the approval of mining projects in the EU and its neighbours, such as Norway, Ukraine and the Western Balkans, as well as in partnerships with countries in Africa and Latin America, it is crucial to underline why rapid approval for such projects is a dangerous idea.
Case 1: Strategic copper mine in Serbia violates property rights and environmental standards
Zijin Mining Group’s takeover of the Bor Mining Complex shows the dangers that pursuing mining projects in countries with weak rule of law poses for individuals’ right to property and a clean, safe and healthy environment.
Located in eastern Serbia, Bor is home to one of the largest copper reserves in the country and in the world. The Chinese company Zijin Mining Group, as a strategic partner of the Serbian government, planned to produce 55,000 tonnes of copper concentrate and 90,000 of copper cathode in 2020. One of the most contentious mines is Veliki Krivelj, an existing open cast mine located in a village of the same name, about 10 kilometres from Bor.
In the last decade, Serbian mining and spatial planning legislation has increasingly enabled the Government of Serbia to issue some of the necessary permits for ‘preparatory works for opening of exploitation of mines’ without requiring an environmental impact assessment (EIA) or the consent of local communities, both of which are required before issuing exploitation permits. This has led to the direct and systemic violation of the rights of the population to say no to any mining operation. As such, a temporary permit allows for serious exploitation works, and it has become very hard to stop the commissioning of the mine.
At the Cerovo mine, near Veliki Krivelj, a Chinese company forcibly took the property of five inhabitants and opened the mine without a permit, a developed spatial plan or an EIA for that plan. The expansion of Veliki Krivelj, even with its enormous future potential, is one of the most problematic mine expansions in Serbia. One of the most important questions is how to protect the Timok River, where inflows from the Kriveljska and Borska Rivers carry pollution from the mines, smelters, flotations and other polluting sources in the mining complex. Kriveljska and Borska are among the most polluted rivers in Europe. Serbian legislation requires that a special spatial plan for specific aims is developed prior to the expansion of any mine. Development of this plan for the mining complex in Bor and Majdanpek started in 2020. But in 2019 and 2020, Zijin had already started attempts to obtain the properties necessary for the extension of Veliki Krivelj. It has thus far only proposed buying those properties that are a few meters from the mine. However, if the mine is expanded as proposed, more than 300 households will be located in the heart of the mining operations – surrounded by constant explosions, vibrations from mine equipment, large trucks and dust from mining and transport. Houses and other structures in the village have already been damaged by mining operations in 2018 and 2019.
In 2020, villagers from Veliki Krivelj, Ostrelj and Slatina held several meetings with the representatives of Zijin, the Government of Serbia and the Serbian President’s office. They repeatedly asked the same questions: who will protect them from the negative effects of mining, who will protect their properties, and why doesn’t Zijin pay the regular market price for the properties?
Residents of the village of Krivelj also held a protest where they demanded the relocation of all 400 households of their village. Speakers stated that it is already impossible to live in villages around the mines, and they cannot imagine what it will be like when new mines will open. A representative of the communal council of Krivelj, Mr Dalibor Stanković, stated:
‘Many houses have cracks on the walls and foundations, and some roofs collapsed, dust covers the village on three sides, while the river is polluted with acidic mine waters.’
In 2020, citizens of Bor also protested against excessive pollution, which they claim has intensified since Zijin became the mine’s owner. In fall 2020, Bor’s municipal administration filed a criminal complaint against the managers of the Zijin for causing excessive sulfur dioxide pollution that is harmful to the health of the population. The Environmental Protection Agency’s (SEPA) measuring stations had recorded excessive sulfur dioxide pollution in Bor for three consecutive days, and there have been similar levels of pollution almost every day for nearly two years since Serbia sold Bor Smelting Company to Zijin. The level of sulphur dioxide in the air allowed by law is 350 micrograms per cubic metre, but on some days, average values in Bor reached 1,969 micrograms several times during the day. The conclusion was that the air is ‘very polluted’ and residents were advised against leaving their homes. The air is also ‘heavily polluted’ by PM10 particles.
In September 2020, Zijin’s smelter temporarily halted operations due to the excessive air pollution. The results of a pilot study conducted by the SEPA about the impact of industrial pollution on the health of the population in Bor, published by the Institute of Public Health of Serbia Dr Milan Jovanović Batut, show that the city’s residents are at a significantly greater risk of disease and death from cancer, and there is a higher risk of premature death from other diseases. Arsenic pollution in Bor increased by 323 times in August 2020. In October 2020, the Commercial Court in Zaječar ruled that the company Zijin Bor and one of its managers are responsible for the pollution in Bor in November 2019 and January 2020. The verdict is not final, because both parties have filed appeals – the last word will be given by the Commercial Court of Appeals in Belgrade.
Despite this ruling, the fine that Zijin will need to pay (about EUR 4 000) will be so small that it is expected that the company will continue to pollute. Thus, in Serbia, private and public mining companies are able to open mines without resolutions on property rights disputes, EIAs for mines or exploitation permits. Such cases have occurred and are ongoing not only at Bor’s copper mines, but also at the Kolubara and Kostolac coal mines and Vojvodina’s oil extraction fields.
Case 2 Labour rights abuses in Bulgaria’s mining and metallurgy sector
Workers identified several serious violations of labour rights guarantees, demonstrating a lack of implementation and oversight of labour laws in the EU’s own mining sector. Bulgaria is the third largest copper and fourth largest gold producer in Europe. According to the official data, about 25,000 workers are employed in the mining sector (which includes coal, oil and gas; non-ferrous metals; and construction materials), representing some 5% of Bulgaria’s GDP.
However, the testimonies of people employed in the mining and metallurgy companies in the Bulgarian Panagyurishte region reveal the problems with labour conditions in the gold and copper supply chains. A survey conducted in November 2019 included 61 interviews conducted with both workers and local residents. The interviewed workers were employed by Asarel Medet AD, which operates an open-pit copper mine and a gold mine; Aurubis Bulgaria AD, which operates smelters that produce copper, gold, other rare metals and sulphuric acid; and Chelopech Mining EAD, which operates an underground copper mine and a gold mine. Chelopech received support from the European Bank for Reconstruction and Development in 2005 and 2008. Core issues identified by the research include the lack of equal treatment of workers employed directly and indirectly, lack of independent trade unions, precarious and low-pay working conditions, intimidation and silencing of critics, and the negative health impact on workers and the local communities.
Case 3 Transfer of toxic mining waste materials from Bulgaria to Namibia
The disposal plan for arsenic waste from the Chelopech mine violates the international convention on waste disposal, showing how the procurement of raw materials at the expense of human health and environmental protection can have severe consequences. Canadian company Dundee Precious Metals has used continuous loans from the European Bank for Reconstruction and Development (EBRD) to improve the profitability and performance of its copper and gold mining operations in Bulgaria. Arsenic content in the precious metal concentrates is one of the main environmental and health issues connected to the operations. The company failed to ensure the extraction, stabilisation and safe deposit of the arsenic in Bulgaria and instead the concentrate with arsenic is exported to Namibia. The primary saleable product of Chelopech is a gold-copper concentrate containing, on average, 5.5% arsenic.
After the tailing dam of the nearby smelter collapsed in 1988 and because of the relatively high arsenic content of the concentrates, in 1990 the Bulgarian government issued a decree that Chelopech concentrate could no longer be treated in Bulgaria, unless arsenic capturing and treatment facilities were installed at the smelter. For this reason, the arsenic is transported by sea to the Tsumeb smelter in Namibia. The annual processed ore in the Chelopech gold mine has increased from around 0.5 million tons in 2004 to above 2 million tons in 2019.
By the final year of the mine, which is projected to be 2025, around 100,000 tons of arsenic will be extracted, processed, stored and/or released in some form elsewhere around the world. Dundee applied for the approval of cyanide leaching technology, claiming that this would also ensure the capture and stabilisation of the arsenic residue, but with no success. In addition, the project’s EIA and permit, which were respectively approved and issued by the relevant ministry, were ultimately rejected by the Bulgarian Administrative Court in 2010 due to significant deficiencies. Under the threat of not being able to process the concentrate, Dundee acquired the Tsumeb smelter in 2010.
The Tsumeb smelter in Namibia was constructed in the early 1960’s and is one of the few smelters in the world equipped to treat complex concentrates as its primary feed. Behind the neutral term ‘complex concentrate’ lies the fact that complex concentrates have high levels of one or more deleterious elements, such as arsenic, uranium, cadmium or mercury. Smelters that will currently accept complex concentrates include Tsumeb in Namibia, Altonorte in Chile, Guixi in China and Horne in Canada. For complex concentrates that contain more than one per cent arsenic, the DPM smelter in Namibia at Tsumeb is now the only smelting option.
Western Balkans has crucial EV battery ingredient – lithium
The interest in developing lithium deposits in the Western Balkans is part of a wider push to exploit the mineral across Europe. Demand for the world’s lightest metal, lithium, is forecast to grow strongly in the coming decade as car manufacturers ramp up production of electric vehicles (EVs). Europe is already an important centre for EV manufacturing, which requires lithium for lithium-ion (L-ion) batteries that are also used in electronics and energy storage for renewables. However, the continent’s EV manufacturers are dependent on imports; most of the world’s lithium is produced in Australia, the South American “Lithium triangle” of Chile, Bolivia and northwest Argentina, and China. This being the case, a growing number of companies are looking to develop lithium deposits across Europe, including in the Western Balkans, specifically Serbia, and more recently Bosnia too.
International mining Rio Tinto is developing the Jadar lithium-borates project at a deposit it discovered in the Jadar river valley in 2004. The site is estimated to contain 10% of the world’s deposits of lithium. Rio Tinto reported a maiden ore reserve in December, announcing that the Jadar project has the potential to produce both battery-grade lithium carbonate and boric acid. The feasibility study, launched in July 2020, should be completed at the end of this year, after which construction work will begin. The project includes the development of underground mines and the construction of a plant to process concentrates. The start of production is anticipated in 2023 or 2024.
“Rio Tinto’s lithium project pipeline is an important part of our vision to pursue opportunities which are part of the transition to a low-carbon future,” said Rio Tinto Energy & Minerals chief executive Bold Baatar, commenting on the project in 2020.
Also in Serbia is Jadar Resources Ltd’s Rekovac project. The project is located in the Vardar Zone, an emerging Tier 1 lithium jurisdiction which, the company says on its website, “exhibits a very similar geological setting to the Jadar Basin, which is host to Rio Tinto’s world-class Jadarite discovery”. The project area is near the cities of Jagodina and Kragujevac, 110 km from Belgrade. While Jadar Resources’ main focus is on the Yanamina Gold Project in Peru, it is diversifying its asset portfolio through the Rekovac project and other lithium assets in Austria. The region’s potential has also aroused the interest of local investors. Most recently, five companies owned by Slovenian businessman Andrej Rautner have set up a lithium exploration company in Bosnia’s Republika Srpska, Bosnian media reported in January, investing BAM11.8mn (€6.1mn).
“We will try to deal with mining if we get concessions. Everything is still in the beginning, the company has only existed for a month. The research would be in the border area between Republika Srpska and Serbia,” Rautner was cited as saying.
The businessman didn’t disclose the specific area the new vehicle plans to target, but according to local media there are lithium reserves in the Jadra area, near the border with Serbia, as well as around Ugljevik, Domaljevac and Samac, in central Bosnia.
Further north, European Metals Holdings is developing the Cinovec lithium and tin project in Czechia, which it says has the potential to be the lowest-cost hard rock lithium producer in the world. The deposit is located in a historic mining area in the Krusne Hore Mountains, close to Czechia’s border with Germany. There are other major lithium deposits in Austria, Finland, Portugal and Spain.
Lithium is used in batteries for electronic products such as mobile phones, laptops and tablets, and will also be increasingly important for the shift to renewable sources of energy such as solar power as the green transition accelerates. However, its main application at least over the next decade, accounting for the lion’s share of demand, will be in electric vehicles (EVs). EV production has been growing steadily in Europe through the continent’s main automakers setting up plants, including in Central Europe’s automotive powerhouses of Czechia, Hungary and Slovakia.
According to a study by McKinsey, while demand for new cars fell during 2020, in many countries, “consumer demand for EVs has remained relatively stable during the crisis when compared with demand for other vehicles”. It forecasts a quick recovery in the EV market in Europe and China post-pandemic. The auto market that reopens post pandemic will be a changed one, says the report: “The pandemic has shuttered plants and halted auto-assembly lines around the world. As OEMs prepare for reopening, some are prioritising EV production either to meet the expected strong demand or to fulfil regulatory requirements, such as the European Union’s strict target for CO2 emissions.”
Demand for lithium dipped in 2019 after a sharp hike in production over the previous few years, but that was seen as a market correction in response to oversupply. Looking ahead, S&P Global Market Intelligence forecasts “substantial growth” in lithium supply until 2025. It expects new mines and brine lakes, as well as higher output from existing projects “should put global lithium production above 1.5mn [metric tonnes] on a lithium carbonate equivalent (LCE) basis.”
S&P anticipates Australia will remain the world’s top producer over the next four years, while South American producers will almost triple output. Meanwhile, only a small production increase in Europe is anticipated during this period. “With potential for 25 battery gigafactories to be operational across the continent by 2025, Europe looks set to remain dependent on non-domestic raw material supply – even as the European Commission has thrown its weight behind developing the sector and ensuring security of raw material supply,” said S&P. A report by metal, mineral, carbon, chemical and EV raw materials research specialist Roskill covering the period until 2030 says that “longer-term scenarios continue to show strong growth for lithium demand over the coming decade”. Roskill forecasts demand will exceed 1.0mn tonnes of LCE in 2027, with growth of over 18% per year until 2030.
RESEERVE’s West Balkan Mineral Register launched
The RESEERVE project represents the first step in establishing fruitful cooperation between countries where there are not yet EIT RawMaterials partners. RESEERVE project has launched the West Balkan Mineral Register to provide a comprehensive and useful register of primary and secondary raw materials. The West Balkan Mineral Register focuses on metals and industrial primary minerals, mine and metallurgical waste sites in the following ESEE countries: Albania, Bosnia and Herzegovina, Croatia, North Macedonia, Montenegro and Serbia. The project aims to increase the capacity of mineral management in the West Balkan countries and ensure a sufficient flow of mineral information for European industry to expand their business and investment in the West Balkan region. The geographical coverage of European Minerals Inventory is being extended with data from the West Balkan countries belonging to the Regional Innovation Scheme (RIS) region. In line with EU mineral needs and strategic trends, West Balkan Mineral Register provides publicly available data for interested stakeholders: potential investors, mineral-related companies, research and educational institutions. The project will reduce exploration costs and investment risks, thus positively contributing to boost economic development and employment in the ESEE region. The project is also in line with the EU Green Deal aimed at transforming the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy.
West Balkan Mineral Register of Primary Raw Materials
The West Balkan Mineral Register of Primary Raw Materials relates to mineral deposits and mineral endowment in the EU neighbouring countries in West Balkan. Mineral Register facilitates the establishment of West Balkan mineral community and accelerates mineral exploration. These actions will enable the integration of West Balkan into the pan‐European mineral market. According to the EU mineral demands and its strategic tendencies, metals, industrial minerals and rocks are integrated into a common dataset, focusing on critical raw materials (CRMs). Primary raw materials data are addressed to active, abandoned and closed mines that might be interesting for further exploration/exploitation and perspective greenfields where any relevant data exit. The 473 locations of primary mineral resources are represented in the register on the European Geological Data Infrastructure (EGDI) map.
West Balkan Mineral Register of Secondary Raw Materials
The creation of West Balkan Mineral Register of Secondary Raw Materials acquire information about the mine and metallurgic waste sites in involved ESEE countries and create a common dataset for this part of Europe to improve their accessibility. Created dataset contains the following information on secondary mineral deposits: basic geographical information of each site, type of waste landfill, geometry and primary extracted elements. Evaluation and classification of potential secondary raw materials, identification of extraction possibilities and environmental impact assessment has been performed on waste deposits. Such a systematic approach presents a good starting point for mineral extractive industry, to enter into new markets. Secondary raw materials data acquire information about the mine and metallurgic waste sites in involved ESEE countries and create a common dataset for this part of Europe to improve their accessibility. The 1461 locations of secondary raw materials in the West Balkan countries are represented in the register and on the Google Earth viewer.
Adriatic and Tethyan merged group will expand footprint in the Balkans
The merged group will subsequently have an expanded footprint in two mining-friendly jurisdictions in the region as it looks to step up exploration and feasibility study activities.
Aspiring project developer, Adriatic Metals, has completed an all-scrip acquisition to the value of approximately C$15 million of fellow Balkans precious and base metals player Tethyan Resource Corp. Tethyan’s shareholders will receive 0.166 Adriatic shares for each share they hold in Tethyan. After the allotment of approximately 13.2 million new Adriatic shares, UK-based Adriatic will still have a tightly issued capital structure of about 196.2 million shares. The transaction was approved by Tethyan’s shareholders and the British Columbia Supreme Court in August and shares in the Vancouver-based junior were expected to be delisted from the TSX Venture Exchange this week.
Adriatic owns the exciting Vares underground silver-lead-zinc project in Bosnia and Herzegovina that comprises two deposits at Rupice and Veovaca. Rupice hosts a very recently updated JORC-compliant indicated and inferred mineral resource of 12 million tonnes going 149 grams per tonne silver, 1.4 g/t gold, 4.1 per cent zinc and 2.6 per cent lead for a contained 58 million ounces of silver, 527,000 ounces of gold, 489,000 tonnes of zinc and 312,000 tonnes of lead.
The A$400 million market-capped company, which has seen a remarkable 10-fold rise in its share price since listing on the ASX in May 2018, hopes to use the updated Rupice resource estimate as a catalyst to a pre-feasibility study as it looks to flesh out the project economics for a possible Vares stand-alone development, prove up ore reserves and build its confidence in the metallurgy.
Initial projections provided in the scoping study, or “SS” undertaken by Adriatic last year were compelling. The SS suggested a CAPEX of US$178.4 million for the potential development of Vares and eye-catching free cash flows in the early years of mining starting around 2023 through to 2031 of between US$100 million and US$250 million per annum courtesy of very impressive average operating costs of US$57 per tonne. Capital payback period has been predicted at an incredible eight months.
Tethyan brings a couple of intriguing brownfields assets to the table in the form of the historic Kizevak/Sastavci silver-lead-zinc project and the Rudnica copper-gold porphyry project, both in Serbia. Adriatic is aiming to deliver a maiden JORC-compliant mineral resource estimate for Kizevak/Sastavci in the March 2021 quarter.
Early signs have been encouraging with a round of confirmation diamond drilling encountering a high-grade, lead-zinc-rich mineralised structure in one of the holes at Kizevak. It returned an impressive 12.9m polymetallic intersection grading 8.2 per cent zinc, 4.1 per cent lead, 98.3 g/t silver and 0.4 g/t gold within a broader interval of 35.3m at 4.2 per cent zinc, 2.2 per cent lead, 46.7 g/t silver and 0.4 g/t gold from 124.8m.
According to Adriatic, a potential bonus in terms of operational synergies is that Kizevak/Sastavci’s metallurgical characteristics may be favourable for concentrate blending with Vares ore. Nonetheless, the low strip ratios of the project’s open pittable resources offer the company a route to maximising tonnages and generating revenues based on potentially enviable costs of mining.
Following the Tethyan takeover, Adriatic now holds advanced projects – roughly 200km apart as the crow flies – in the two jurisdictions of Bosnia and Serbia that have established mining pedigrees and infrastructure, skilled workforces and low-cost operating environments.
The company has a first-mover advantage in the region, and with the two countries attracting significant investment from the likes of Rio Tinto, Toronto-based Dundee Precious Metals, Chinese group Zijin Mining, Vancouver-based Mundoro and Vancouver-based Fortuna Silver, it’s a case of watch this space.
Adriatic Metals acquisition of Tethyan Resource Corp produces the prime polymetallic explorer and developer in the Balkans
Tethyan Resource Corp. is going to acquire Tethyan Resource Corp. and the company announced the execution of a binding letter agreement pursuant to which Adriatic Metals PLC will acquire 100% of the issued share capital of Tethyan, by way of a Plan of Arrangement under the Business Corporations Act, and has provided funding to complete the first closing of the previously announced EFPP d.o.o acquisition.
-Exchange ratio of 0.166 Adriatic shares for each Tethyan share represents a premium of 47% to Tethyan’s 20-day Volume Weighted Average Price
-In conjunction with the Transaction, Adriatic and Tethyan have entered into a convertible loan agreement, whereby Adriatic has agreed to advance to Tethyan a secured convertible loan in the amount of up to €1.3 million in three tranches; Adriatic has advanced the first €1.0 million under the Convertible Loan Agreement
-Loan enables Tethyan to close the transaction for the acquisition of EFPP d.o.o., the holder of parts of the Kizevak and Sastavci deposits, to commence confirmation drilling at Kizevak, and to meet the expenses and costs of Tethyan in completing the Transaction
-Addition of Tethyan’s Serbian brownfield development projects, Kizevak and Sastavci, and its large prospective landholding on the Tethyan mineral belt positions the enlarged Adriatic as the leading Balkan base and precious metals developer
-Adriatic plans to rapidly advance the past-producing Kizevak and Sastavci polymetallic mines in the Raska district of southwestern Serbia towards a maiden JORC compliant resource by end-Q4 2020
-Tethyan shareholders gain exposure to Adriatic’s existing exploration and development portfolio including the exceptional Vares Project and prospective regional exploration potential in Bosnia & Herzegovina
-Tethyan Board of Directors unanimously supports the Transaction and irrevocable undertakings to vote in favour of the Transaction received from approximately 55% of Tethyan shareholders
-Transaction expected to close by end-August once all conditions have been met
“We are excited that our assets will soon be part of the Adriatic story. Adriatic Metals has built an excellent reputation in the Balkans based on their development capability and positive engagement with local stakeholders. We are confident that the combined assets and team will go forward to bring high quality assets to production in a timely and sustainable manner, ensuring lasting benefits for both our shareholders and the communities in which we operate.” Fabian Baker, Tethyan’s President and CEO, said.
“Tethyan Resource Corp. have been successful in consolidating the Raska district in Serbia, and with the recent addition of the Kizevak and Sastavci licenses, the acquisition presents a unique opportunity for Adriatic to add assets to our portfolio that have the potential, over time, to match the quality of our exceptional Vares Project in Bosnia.”
“In a short time, Adriatic has built a significant presence in the region, by developing our assets with a very competent team at the helm. Applying our team and strong balance sheet to Tethyan’s assets positions us well to proceed through the project development cycle. These are past producing mines, and the historical data we have reviewed provides ample confidence that we are adding significant value to our portfolio. I look forward to working with Fabian and his team over the coming months to close the transaction and demonstrate the potential of these assets.” Paul Cronin, Adriatic’s Managing Director and CEO commented.
The Transaction will give Tethyan shareholders the ability to participate in the enlarged Adriatic as the leading Balkan polymetallic explorer and developer with four key projects (Rupice, Veovaca, Kizevak & Sastavci) covering a total land package in excess of 301km2 across Bosnia and Serbia. The Transaction allows Tethyan shareholders to retain upside to the Kizevak and Sastavci Projects whilst increasing the pace of development as Adriatic brings its strong balance sheet (cash of A$23.8 million and no debt as at 31 March 2020) and its experienced project development team to rapidly progress the projects.
Adriatic’s Vares project
Adriatic holds a 100% interest in the Vares Project in Bosnia & Herzegovina, which comprises the historic open pit mine at Veovaca, and brownfield exploration at Rupice situated 12 kilometers to the northwest of Veovaca.
Rupice exhibits exceptionally high grades of base and precious metals. The deposit is a near-surface, moderately dipping sedimentary-style base metal deposit with very high grades of gold, silver, zinc, lead, barite and copper. Adriatic have drilled more than 12,000m to date returning numerous high grade drill intersections, such as drill hole BR-36-18 which returned 72 metres at 2.5g/t Au, 211 g/t Ag, 2.5% Cu, 10.7% Pb, 18.3% Zn and 25% BaSO4.
In November 2019 Adriatic announced the results of a JORC-compliant Scoping Study, following the release of a Maiden Resource Estimate earlier in the year. Adriatic is now rapidly developing the project, intending to complete a JORC compliant Pre-Feasibility Study during 2020.
Additionally, Adriatic has attracted a world class team to both expedite its exploration efforts at the high-grade Rupice deposit and to rapidly advance the project into the development phase utilising its first mover advantage and strategic position in Bosnia.
Tethyan’s Kizevak and Sastavci projects
The Transaction enables Tethyan to proceed to close the acquisition of EFPP d.o.o., the holder of parts of the Kizevak and Sastavci deposits, and commence drilling at Kizevak.
Kizevak is a past-producing mine reported to host considerable historic silver, zinc and lead mineral resources. Drilling by Tethyan in 2018, 1 kilometre along strike from the historic open pit mine, intersected high-grade mineralisation including 12 metres at 22.03% Zn, 10.49 % Pb, 167g/t Ag and 0.18g/t Au. Historic records show that the entire corridor between the old Kizevak open pit and Tethyan’s recent drilling is mineralised.
At Kizevak, there have been at least 116 holes drilled, totalling 14,951.1m. There are also an additional 7,820m of underground exploration workings. The mine was operated as an open pit by the Serbian State between 1984 and 2000, ceasing operations due to conflict in the region. The project benefits from numerous infrastructure advantages including water, power, road and rail access all within five kilometres, and a local workforce with a long history of mining. Additionally, the land comprising the wider project area is designated for mining purposes under the Serbian State spatial plan, providing many permitting benefits and efficiencies.
Sastavci was also mined historically by open pit on a smaller scale than at Kizevak and represents a priority drilling target. The Sastavci historic open pit is located 3.5km north-northwest of the Kizevak open pit. Outcropping, steeply dipping, massive sulphide veins up to 5 metres wide are visible in the pit walls. Tethyan collected 65 rock-chip samples across the Sastavci area, which returned Zn values of +30% (limit of assay detection), 7.1% Pb, 94.3g/t Ag and 0.47g/t Au in the old Sastavci open pit.
Benefits for Tethyan shareholders:
-Ability to fund the initial €625,000 payment to EFPP in order to close the first stage of the EFPP Acquisition, of which €100,000 has already been advanced;
-Adriatic’s strong balance sheet will allow significant work to commence immediately in order rapidly progress the Kizevak and Sastavci Projects;
-Exposure to Adriatic’s existing portfolio including the world class Vares Project and highly prospective regional exploration potential.
Benefits for Adriatic shareholders:
-Addition of two high quality brownfields projects to the portfolio in established mining jurisdiction Serbia, establishing Adriatic as the leading Balkan polymetallic explorer and developer;
-Creates long term project development pipeline with Kizevak and Sastavci to follow Adriatic’s world class Vares project, plus attractive portfolio of regional exploration targets;
-Tethyan has a well-established team in-country to assist with permitting and project development and strong links with the local communities in which it operates.
Benefits for both sets of shareholders:
-Consolidates two premier polymetallic mining districts under one capable and well-financed company;
-Synergies between operations in Bosnia and Serbia strengthen exploration, development and permitting ability; and
-Potential for operational synergies once in production, particularly in downstream processes such as blending of concentrates.
Coal mines in Romania, public money used to evict people
According to the two organisations,ClientEarth and Bankwatch, the Romanian government had been unlawfully using taxpayers’ money to cover over €6 million in compensation owed by incumbent energy company Complexul Energetic Oltenia (CEO) for forcing villagers from their homes for coal mine expansions.
ClientEarth lawyers and Bankwatch Romania have raised the alarm after it was found that the state was funding coal evictions in Romania, to the tune of several million Euros. A complaint has been submitted to the European Commission.
As the operator of the mines, CEO itself is responsible for compensating evicted villagers. However, as the Romanian authorities found the landowners’ compensations claims “excessive”, they decided that the mine expansions are “national interest public utility projects” and should therefore be fronted by the State.
But ClientEarth and Bankwatch argue that the government’s payments qualify as State aid and are therefore unlawful, as the Romanian government did not notify the European Commission, as EU law requires, before relieving CEO of its obligation to compensate the villagers.
According to the lawyers, the issue is not just procedural: they say the nature of the aid also goes against EU law and should never have been granted in the first place.
ClientEarth lawyer Juliette Delarue said: “The Romanian government claims that expropriating villagers is in the national public interest. But this is not justifiable when people are losing their homes for a climate-destructive product.
“Public money should be going to communities and regions to modernise the energy system and to help reshape local economies, especially in a country that has untapped renewable energy potential, instead of propping up an industry facing severe financial difficulty and that is subject to bankruptcy.”
Alexandru Mustaţă from Bankwatch Romania added: “There’s growing consensus in Romania that coal has no long term future, but there is also a complete lack of vision for a future without it. Ignoring opportunities to transition away from coal has become the rule. The only solutions taken into account are those prolonging the status quo – regardless of how polluting, expensive or illegal they are.”
Romania is not the only EU country attempting to use public money unlawfully to keep its fossil fuel industry afloat. Bulgarian authorities are trying to do the same.
State aid issues across the Balkans
ClientEarth has also worked with partners to submit an additional two State aid complaints to the European Commission: one with Za Zemiata, against Bulgaria, and another with Bankwatch CEE against Romania.
Romanian coal company CEO and Bulgarian power plant Maritsa East 2 had been unable to afford their mandatory EU Emission Trading System (EU ETS) allowances for several years and their respective national governments had bailed them out, granting the companies interest-free loans and guarantees.
The lawyers argue that this, too, constitutes unlawful State aid. Not only that, they directly contradict the purpose of the ETS, as they disincentive CEO and ME2 from turning to less polluting activities that would cost them less in emission allowances.
Genady Kondarev from Za Zemiata said: “Maritsa East 2 is the biggest power plant in the Balkans and one of the top 10 polluters in Europe. The type of State aid it is currently receiving is fuelling the climate and air pollution crises. The Bulgarian government needs to announce a coal phase out date now to kick start the restructuring of the Bulgarian energy system so that coal regions can make a smooth transition.”
The European Commission may decide to open investigations following the environmental groups’ complaints. If the Commission finds that the payouts violate EU law, it is free to force the Romanian and Bulgarian authorities to suspend future payments and recover the full amount paid out to date.
Coalmine Pljevlja in Montenegro recorded higher net profit in 2019
Pljevlja coalmine’s operating income reached 47.17 million euros at the end of December 2019, which is by 9.1 % more than in in 2018, according to the financial report. The coalmine recorded a net profit in the amount of 9.56 million euros in 2019, which is 43.5 % higher compared to 6.65 million euros profit in the previous year.
At the same time, operating expenses rose by 3.8 %, reaching 35.88 million euros. Salaries, benefits and other personnel expenses reached 14.14 million euros, costs of materials amounted to 9.82 million euros, depreciation and provisions reached 7.57 million euros, while other expenses reached 4.24 million euros. Total assets of Pljevlja coalmine at the end of December 2019 were worth 79.86 million euros, which is 6.7 % more than a year before. The company’s long-term provisions and liabilities amounted to 16.49 million euros, short-term to 12.73 million euros, while deferred tax liabilities reached 1.19 million euros. Retained earnings stand at 13.93 million euros. In April 2018, power utility EPCG announced that it has launched a buyout bid for the entire capital (5,064,443 shares) of Pljevlja coalmine. The bid was valid in the period between 20 April and 4 May and EPCG offered to pay 6.4 euros/share of the coalmine. According to the analysis performed by Deloitte, which said that although the price of Pljevlja coalmine shares stood at 6.9 euros at the end of 2017, the fair price is 6.4 euros/share. According to the decision of the Commission for the Capital Market in early June, EPCG became the majority owner of Pljevlja coalmine.
Zijin Company in Bor, environmental issues lead to court in Serbia
The Ministry of the Environment initiated proceedings against Zijin Bor Copper for the release of hazardous substances into the air in November 2019 and January 2020. The ministry has controlled the company several times, and at least five times it has identified failures since the mining basin was privatized in late 2018. While the authorities shift responsibility to each other, the lives of 45,000 Bor citizens are endangered.
At the end of one working week, an employee at Zidjin, formerly RTB Bor, waited for an unpleasant surprise at the door of the administration building – their fellow citizens whistled and shouted: “You betrayed the city. ” With the support of residents of the surrounding towns and political activists, on November 15, 2019, part of Bor residents protested over months because of pollution coming from the mining basin. With the message “Our Health or Your Profit” and with face masks, the Chinese investor was asked to reduce production volumes and thus the air pollution that suffocates them.
“Sulfur dioxide directly damages the health,” Dr. Dragica Radosevic addressed the event. Heavy metals such as arsenic, which can also lead to malignant tumors, are even more dangerous, he explains.
Katarina Vaskovic, a protest participant, complained to the media that life in Bor was quarantined.
“Our children live in quarantine, we can only take them outside when we estimate that there is not so much smoke. Every other kid in the neighborhood gets an asthma pump, ”Vaskovic said.
The protesters supported the speakers for a full two hours.
However, on the day of the protest, Bor was not contaminated. The air did not scratch his throat, and eyes did not tear, as Bor residents otherwise claim, and there was no need to close into homes. Local clean air is explained by the decline in Zidjin’s production of copper and precious metals – because of protests and television cameras.
Data obtained by the Center for Investigative Reporting in Serbia (CINS) confirms that there was no excessive pollution on the day of the protests, as well as for the next five days, but then came back – stronger than the Air Protection Act allows.
One week after the protest, environmental inspector Emila Tosic visited Zidjin and found that sulfur dioxide (SO2) concentrations had gone up to 4.6 times the statutory limits during those two days, November 21 and 22. In some hours, the amount of SO2 in the air was 8.3 times higher than allowed, according to the inspector’s report. SO2 is a gas of sharp odor that causes frequent coughing and pharyngeal irritation. It is the cause of respiratory and cardiovascular diseases and is most harmful to children, the elderly and people with chronic lung diseases.
Pollution was measured just a five-minute walk from the mining pool gate, at a station maintained by the Environmental Protection Agency (SEPA) in the city park.
In January 2020, the inspection controlled Zidjin and found the same omissions, the documentation obtained by CINS shows.
Due to the release of hazardous substances into the air and the company did nothing to reduce pollution, the proceedings before the Commercial Court in Zajecar against the company Zidjin and the deputy head of the TIR branch causing the problem, Boban Todorovic. They are charged with an economic offense for which a fine of between 1.5 and 3 million dinars has been imposed, and the court can impose a sentence commensurate with the damage done.
Nataša Djereg from the NGO Center for Environment and Sustainable Development (CEKOR) believes that such punishment does not help:
“Our fines are ridiculous – of course it pays for all polluters to continue to pollute, especially at such large plants, to pay the fine and move on. A fine is not a measure, the penalty would be to stop production. ”
Former head of the TIR branch, Paun Jankovic, in an interview with CINS, said stopping production was not in the interest of the majority owner – currently China’s state-owned Zijin International Finance Company Limited (63%), while the Serbian government is the second largest co-owner with 36.9%. Cessation of work means less income, but it can affect problem solving, Jovanovic explains:
“There are technical solutions – to urgently eliminate the causes of this bad show. If necessary, stop production for a week, two weeks, mechanically repair what is needed and then go back to normal. ”
Zijin’s earlier omissions
This is not the first time that Zijin, formerly RTB Bor, has not adhered to the rules. Since the privatization of the mining basin, in December 2018, Inspector Tosic has noticed at least five times various omissions.
As early as April 2019, the inspector had ordered the company to take action against air pollution of the environment, human health and the environment, because it emitted excessive SO2, reports CINS reported. Zijin then explained in a letter to the Ministry of Environment that the power outage had caused pollution.
However, control a few months later, in August, showed another omission – Zijin did not have a system for wet dust removal during the transportation of tailings on the Bor mine, which also threatened human health and the environment. Zijin was ordered to solve the problem, and the company later told the Ministry that a dust suppression system had been installed, which was put to trial.
In November 2019, CINS sought an interview with Zidjin on the topic of air pollution, to which the company responded with a press release. It says that by the end of the year, the company will have a total of five SO2-neutralized dust spray machines. Documentation obtained by CINS shows that by that time, two of the machines purchased had been in operation for about two months, but pollution data showed that it had no significant effect on the reduction of sulfur dioxide – in October the number of days with more SO2 in the air it was slightly smaller.
Zijin announces other investments – a dust and exhaust gas collection plant, and by the end of 2021 the construction of an additional facility to ensure that “the emission of gases is always and fully in line with the prescribed standards”.
Bor residents are not satisfied with communication with the Ministry, as they do not receive answers on measures taken to reduce air pollution.
From a recording of a phone conversation between activist and chairman of the Dveri District Committee, Sasa Stankovic, with Aleksandar Blagojevic of the Ministry’s inspection sector, posted by Bor activists in October 2019 on Facebook page 1 of 5 million Bor, it appears that the inspection does not go out on the field exploration at all but to notify Zijin about the pollution by phone as part of the procedure.
Blagojevic explained that the inspector “called the company and told them that there were exceedances of one-hour values and that they should reduce production or put more fresh raw material than slag.” He also stressed that there is a legal obligation for the City of Bor to adopt a Short-term Action Plan that specifies when Zijin should stop production for several hours or days.
From Municipality they say the Short-term Action Plan has nothing to do with the work of the Republic Inspectorate.
“The inspectors are known to work. When any accident occurs, the inspector goes out to see what is going on, the real record, measures are taken regardless of the Short-term Action Plan. We will see when we come up with a Plan, how much we will be able to influence the work of the company, “said Ljiljana Lekic of the City of Bor’s Environmental Protection Office.
She explained that they started drafting the Plan and that representatives of local environmental associations, including those organizing protests, are involved. Still, Lekic says the plan will only provide guidance for solving the problem.
Toplica Marijanovic, formerly Deputy Director of Environmental Protection at RTB, says the action plan is not binding, and even the inspector cannot ask the polluter to implement it.
“This is an effort for the Ministry, or the state, to shift all responsibility for the state of air quality to local self-government, and local self-government has no power or ability to react in any way in industrial and mining facilities for which the state license is issued,” Marijanović said.
In the meantime, pollution is still present in Bor. SEPA issued a warning that they were dangerous to human health on January 24 and 26 due to the concentration of SO2 at two measurement sites.
While Aleksandar Milikic, Bor Mayor and SNS official, says the pressures are political because the protest is led by Alliance for Serbia member and Dragan Djilas associate, Irena Zivkovic, she, along with three other activists, including Sasa Stankovic from of the Dveri movement, in late November, filed criminal charges against the director of Zijin Bor Koper, Long Ji, the mayor of Bor, and the Minister of the Environment, Goran Trivan.
The Ministry did not respond to CINS’s questions regarding local government control over the adoption of the Short-term Action Plan, or whether it would be able to order production to be halted in Zidjin.
New owner – new pollution
According to the regulations, SO2 in one measuring point may be exceeded only three days a year. It has not been respected in Bor for years. The metering station in the city park, near the mining basin, showed SO2 pollution for an average of five months in 2014, to a total of 13 days by 2018, and then jumped to 40 with a Chinese investor, SEPA data shows.
The findings of the Bor Mining and Metallurgy Institute’s 2018 report are not encouraging. There were more than allowed SO2 and harmful PM10 particles on an annual basis, most commonly affecting blood and respiratory diseases. Arsenic was 24 times more than allowed in Bor. Pollution in Serbia is in many places above the legal limit.
High concentrations of pollutants affect the health of Bor residents.
About two-thirds of pre-school children and half under the age of 18, who in 2014-2018 sought the help of a doctor, had problems with their respiratory organs. They most often suffered from sore throat and tonsils, according to data on the health status of residents of the town of Bor published by the Institute for Public Health Timok in Zajecar.
These inflammations are the second most common disease in adults, with nine cases in every 100 inhabitants.
Although dominant, these diseases have a slight downward trend over the five-year period, coupled with declining production of the mining basin and a decrease in air pollution.
After the privatization of RTB Bor, pollution increased again.
Medgold exploration and the value of ore wealth in Serbia
The expansion of mining activities in Serbia is currently increasing. Exploitation of copper, lead, zinc, silver and gold is widely spread.
Experts in the field point out that it is important that, in parallel with the opening of the mines, a supporting industry is developed to maximize the benefits of the raw material itself, and that it is noticeable that far greater attention is being paid to environmental protection in the mining sector than it was the case earlier.
Miroslav Ignjatovic of the Association for Energy and Mining of the Serbian Chamber of Commerce tells Tanjug that there are 200 exploitation and 127 exploration fields in Serbia, where extensive research is being done.
Canadian discovery at the border
The latest news that has emerged these days is that Canadian research firm Medgold risorsiz confirmed results of rich ore deposits.
They previously indicated that they found excellent indicators in southern Serbia at the border with Bulgaria and Macedonia that rich deposits of precious metals are in the area
The company said they found about seven million tonnes of ore, with about 680,000 ounces, or 19.3 tonnes of gold, worth just over $ 1 billion in just one project site called “Tlamino”, and investigations continue.
Ignjatovic points out that this news is an encouragement for the development of the mining sector in Serbia, but it will depend on further geological testing whether there are realistic conditions for a more serious mining project. He states that a clearer picture of the prospect of the reservoir itself will be obtained in the coming period, and points out that it is noticeable that far more attention is paid to environmental protection in the mining sector this year.
“The Mining Waste Cadastre project, which lasted for three years, provided Serbia with a clear picture of this waste, which is the basis for analyzing the environmental situation and planning further steps to address the issue of this waste,” said Ignjatović.
Also, in terms of investment, Ignjatovic says that in the next three years, the highest level of investment is expected in the Chukaru Peki mine, the Jadar project, as well as investments in the Bor pits now owned by Zidjin company.
“We should not forget the development of surface mines in the branch of RB Kolubara, which in the coming period will represent the basis for a stable electric power system of Serbia and the production of energy from thermal capacities,” he added.
Otherwise, it is estimated that about two percent of Serbia’s GDP belongs to the mining sector. By structure, about 90 percent of the estimated two percent of GDP is made up of energy minerals, coal, oil and natural gas, as well as copper as a metallic mineral resource. The rest of the structure is made from lead and zinc and non-metallic minerals, mainly stone aggregate, sand and gravel and raw materials for the cement industry.
A bright future
Experts at the Geological Survey of Serbia state that the future of this branch in Serbia is certainly bright. Geologist Predrag Mijatovic says that significant investments are still needed.
“Investing in metallic raw materials research is very time consuming and it is not a process that can be completed in a year or two, it takes seven to 10 years”, Mijatovic pointed out.
As for how Serbian ore is stationed by region, eastern Serbia is dominated by copper and gold, and sometimes lead and zinc. There are also uranium deposits on Stara Planina. In central Serbia, deposits of lead, zinc, uranium, as well as gold and silver are characteristic, according to Mijatovic.
In the western part of Serbia, in the Podrinje region, there are many deposits of antimony that are no longer exploited, and there are also lead and zinc, according to the Geological Survey. Nickel and chromium are found in several places in Serbia, especially in the central part, near Arandjelovac, Vrnjacka Banja, in the west in Mokra Gora, while chromium is found in Tara, Zlatibor, Deli Jovan, and bauxite (raw material for aluminum) in Tara, Zlatibor, near Pocuta and near Babusnica.
There are also deposits of non-metals as well as coal, and in Vojvodina there are deposits of gas and oil, as well as deposits of different types of clay.
In terms of reserves, the overall resources and reserves of lead and zinc, including the mines in Kosovo and Metohija, are estimated at close to 100 million tons and coal deposits at about ten billion tons, says Mijatovic. There are less reserves of brown coal, which is exploited underground, while, for example, gold reserves cannot be estimated accurately, but it is assumed to be around a few tens of tons of gold as a metal but outside the Bor deposits. Copper resources are estimated at several billion tons, both proven ore reserves and resources under exploration.
Experts at the Geological Survey of Serbia cite an example that the Trepča mine is at half the value of the estimated ore, or half of the balance reserves according to the exploitation trend. The Kosovo Basin is, as they say at the Institute, so rich in coal (lignite) that it could contribute to the smooth production of electricity over the next 150 years.
Otherwise, Serbia imports iron ore as well as higher quality coal (brown) for heating and industrial consumption (coal).