For nearly three decades, Rio Tinto has been vying for permission to commence mining operations in the Simandu Mountains of southeastern Guinea. As the company celebrates 20 years of operations in Serbia this year, it has received a significant boost with the Serbian government reinstating the spatial plan for the Jadar project, which involves extracting jadarite in western Serbia.
This decision follows a ruling by the Constitutional Court of Serbia on July 11, which deemed the government’s 2022 decision to halt the Jadar project unconstitutional. While the company has expressed approval of the government’s latest move, it remains to be seen how this development will unfold.
From its initial exploratory phase to the recent resurgence of the project, the Jadar story has been marked by periods of high anticipation and tension. This current phase, featuring a robust media campaign, appears to be one of the most critical in the project’s history.
Media campaign and public perception
In recent months, the media has been abuzz with news about lithium, highlighting new mines, investments in lithium battery factories, and the purported benefits of lithium technology. The narrative has been largely positive, with reports suggesting that Serbia risks missing out on technological advancements and economic opportunities if it doesn’t embrace lithium mining.
However, coverage has been selective. The steep decline in lithium prices—by 80% over the past two years—and the emergence of sodium-ion batteries, which are starting to power electric vehicles, have been less prominently featured. Additionally, the projected annual revenue for Serbia from the Jadar project has been inflated in the media, growing from an initial estimate of €180 million to a staggering €10 billion according to official sources.
Environmental and economic concerns
One significant issue with the Jadar project is its environmental impact. Mining is inherently disruptive and poses risks to ecosystems, particularly when conducted in sensitive areas. The transformation of one of Serbia’s most beautiful and historically significant regions for mining purposes raises substantial ecological concerns.
Economically, while the projected figures seem impressive, comparisons with domestic giants like Delta Holding and MK Group suggest that the financial benefits might not be as substantial as presented. There’s also the possibility that technological advancements could render lithium obsolete by the time mining begins, leaving behind potentially harmful environmental changes without the anticipated economic gains.
Distrust and historical issues
Rio Tinto’s track record is marred by controversies and environmental mishaps. The company has faced criticism for its operations in various countries, including the destruction of ancient caves in Australia and severe environmental damage in Papua New Guinea. These issues have led to significant social and political unrest, including a civil war in Papua New Guinea triggered by disputes over environmental damage and profit distribution.
Investor confidence in Rio Tinto is also shaky. Major funds, such as Norges Bank Investment Management, are reconsidering their stakes in the company due to environmental concerns, particularly regarding its activities in the Brazilian Amazon and other regions.
Future prospects
Despite these concerns, it seems likely that Rio Tinto will proceed with its plans in Serbia. The international community and European Union appear to be supportive of lithium mining, and there is little indication that they will intervene.
There is talk of a potential referendum allowing Serbian citizens to vote on the project, but this raises concerns about the influence of media campaigns and public opinion, which might not fully grasp the complexities of the situation.
Citizen protests may be the most viable avenue for opposition, though current public sentiment and historical precedents suggest that such resistance might be insufficient to halt the project. As with other large-scale developments in Serbia, such as Belgrade Waterfront and Majdanpek, the Jadar project might proceed with limited resistance, highlighting the ongoing challenges of balancing economic development with environmental and social considerations.
