Serbia’s Jadar mine: the energy transition and environmental concerns

Introduction

Following government plans to reboot the Jadar lithium mine proposed by mining giant Rio Tinto, thousands of protesters rallied in Belgrade over the past month. The mine is set to become the largest lithium mine in Europe, significantly boosting Serbia’s economy, and supplying 90% of Europe’s lithium needs. However, the project has also sparked nationwide protests with concerns over the potential impact of the mine on the local environment. With increasing global demand for critical minerals, the Jadar lithium mine highlights broader tensions around resource extraction and the energy transition. This article analyses the implications of the mine and explores the different stakeholder perspectives that pose risks to its commencement.

Background

With the European Union's (EU) increasing demand for lithium, driven by the transition to electric vehicles (EVs) and energy storage, developing a secure lithium supply chain is growing in importance. Portugal is the only EU state that mines and processes lithium, making the region and its green transition heavily dependent on external sources. In response to this vulnerability, the EU has introduced the Critical Raw Materials Act (CRMA), which aims to reduce reliance on imports by promoting domestic production and refining capabilities. The proposed Jadar lithium mine in Serbia, with estimated reserves amounting to 158 million tons, could play a pivotal role in this strategy, with plans to produce 58,000 tons of lithium annually – enough to support 17% of the continent's EV production, approximately 1.1 million cars. 

If all goes to plan, mining operations could begin in 2028. According to Serbia’s mining and energy minister, the government “aims to incorporate refining processes and downstream production, such as manufacturing lithium carbonate, cathodes, and lithium-ion batteries, potentially extending to electric vehicle production”. Moreover, in June 2021, amid public opposition in the Loznica region, the government emphasised that the project would involve a full-cycle approach to maximise local economic benefits. In March, Prime Minister Ana Brnabić suggested that the country could restrict or prohibit the export of raw lithium to support domestic value chain development. However, so far the specifics of the refining processes remain unclear.

Stakeholder perspectives

EU view

Since Europe currently has virtually no domestic lithium production, the EU views the Jadar lithium mine as a crucial project to bolster its economic security and support its green energy transition. The mine is expected to produce enough lithium to meet 13% of the continent’s projected demand by 2030, reducing its reliance on imports. Germany has already expressed strong support for the project, with Chancellor Scholz emphasising the mine’s importance for Europe's economic resilience.

Serbian view

The Serbian government views the project as a significant opportunity for the country's economy and its industrial development. Its mining and energy minister has emphasized that the project would comply with EU environmental standards while delivering economic benefits, including the creation of around 20,000 jobs across the entire value chain. Furthermore, Serbia’s finance minister projects that the mine could add between €10 billion and €12 billion to Serbia's annual GDP, which was €64 billion in 2022. To maximize these benefits, Serbia plans to follow the example of countries like Zimbabwe and Namibia by imposing restrictions on lithium exports, aiming to establish a complete domestic value chain for EVs. Additionally, Serbia's bid for EU membership adds a strategic dimension to the project, potentially aligning the country more closely with the bloc's energy and economic goals.

Local population view

Massive protests against the Jadar project have erupted across Serbia since June, following a court decision that cleared the way for the government to approve the mine. Many Serbians are troubled by the lack of transparency that evolved in the granting of mining rights to a foreign company. Moreover, opponents are sceptical of Rio Tinto's involvement, citing the company’s controversial history in developing countries, such as its operations in Papua New Guinea, where environmental damage contributed to a nine-year civil war. In this light, locals fear that the mine could jeopardise vital food and water sources in the Jadar Valley. For example, environmental problems caused by tailings, mine wastewater, noise, air pollution, and light pollution could endanger the lives of numerous communities and harm their agricultural land, livestock, and assets. Concerns have also been heightened by reports that exploratory wells drilled by Rio Tinto brought water to the surface that killed surrounding crops and polluted the river.

Rio Tinto view

Rio Tinto asserts that the Jadar mine is “the most studied lithium project in Europe,” having invested over $600 million in research and development to ensure its safety. As part of its efforts to gain public support, the company has conducted 150 information sessions for the local community, while Serbia's mining ministry has established a call centre to address concerns about the project. To further reassure the public, Rio Tinto has also expressed a willingness to allow independent experts to conduct an environmental review, aiming to alleviate doubts about the mine's potential impact on the ecosystem.

Conclusion

Despite the public opposition, the Jadar lithium mine appears likely to proceed, backed by strong support from the Serbian government and the EU, both eager to meet the onshoring requirements outlined in the CRMA. However, as this article has highlighted, the project faces considerable risks, including environmental challenges and persistent social and political opposition. The recent closure of the Cobre copper mine in Panama, following widespread protests over environmental damage and disputes over a new tax deal, serves as a stark reminder of the potential pitfalls. The Jadar project will need to navigate these complexities carefully to avoid similar outcomes and ensure a balanced approach to economic development and environmental preservation.