The Jadar project: A costly gamble with negligible returns and significant risks for Serbia

The analysis of the Jadar Project presents a compelling argument against its continuation, emphasizing significant economic and environmental concerns. Here are the key points distilled from the findings:

Economic viability

1. Minimal economic benefit: The projected income for Serbia from the Jadar Project is a mere €17.4 million annually, equating to just €2.6 per capita. This amount is negligible in the context of the project’s scale and the potential environmental risks involved.
2. Infrastructure costs: Serbia would bear the costs of extensive infrastructure improvements necessary for the project, estimated to be several hundred million euros. This includes roads, railways, and utilities specifically designed to support Rio Tinto’s operations, placing a significant financial burden on Serbian taxpayers.
3. Limited returns on investment: Despite projections of high revenues for Rio Tinto, the Serbian government would not hold any ownership stake in the mining operation, meaning the bulk of profits would go to the company without commensurate financial returns to the state.
4. Unrealistic revenue estimates: The projected revenues rely on optimistic pricing for lithium carbonate, which has recently seen significant price drops. This raises questions about the actual financial returns that Serbia could expect.

Environmental risks

1. Ecological concerns: The environmental implications of mining operations, including risks of pollution, resource depletion and habitat destruction, are significant. Past incidents, such as floods in the Jadar valley, highlight the potential for environmental disasters that could have long-lasting impacts.
2. Long-term liability: Should an environmental disaster occur, the financial responsibility for rehabilitation would fall solely on Serbia, potentially costing hundreds of millions of euros.

Governance and transparency

1. Lack of transparency: Concerns about the transparency of government dealings and the decision-making process regarding subsidies and project approval have been raised, particularly regarding the €419 million in subsidies to the Slovak company InoBat.
2. Comparative analysis: The analysis contrasts Serbia’s approach with that of other countries, such as Chile and Bolivia, which have established national strategies for lithium and seek to retain greater control and ownership over their resources.

Conclusion

The authors of the analysis argue strongly for suspending the Jadar Project, citing the negligible economic benefits compared to the substantial financial and environmental risks involved. The evidence suggests that the project would ultimately yield little for Serbia while exposing the country to significant liabilities and ecological harm.