Left and Right unite against Rio Tinto lithium project in Serbia

Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) faces a crucial test this month in Serbia as leaders of a small town vote on whether to allow Europe’s largest lithium project, the $2.4 billion capex Jadar.The council of Loznica, population around 20,000 about 100 km west of Belgrade, is deciding whether to amend its official plan to allow the 250-hectare development. The hard-rock lithium project has sparked massive protests while see-sawing between official support and rejection for years.Slated to start in 2028, it would produce 58,000 tonnes a year of battery-grade lithium carbonate, about 17% of European demand and enough for one million electric vehicles. The mine might last 40 years. Rio, the world’s second largest miner by stock market value, and the government faced mass rallies again this week, swollen by an unlikely combination of causes.“Rio Tinto is the hottest issue in the country right now,” Vuk Vuksanovic, an associate at the London School of Economics’ Ideas foreign policy think tank, said by email on Friday.“The anti-lithium protests and environmentalism are the only things that at least temporarily unite left and right in Serbia. The left perceives it as a resistance against the arbitrary and illiberal governance of the incumbent coalition. The right perceives it as a struggle against Western dominance.”Court rulingLoznica council hasn’t set date for its vote, but local Balkan Insights media said on X it’s due this month. In August, Serbia’s Constitutional Court sided with Rio in overturning a 2022 government decision to block the project. Pundits note Serbian President Aleksandar Vučić might have cancelled the project’s permit in January 2022 in a ploy to win re-election that April.Serbia locks lithium deals with the EU amid Jadar’s revivalBut analysts view Vučić as pro-mining. He said in June he would revive the project, then signed a partnership with the European Union (it’s not a member) in July to supply critical minerals. His administration defeated an opposition-led motion on Oct. 10 to ban lithium exploration.Vučić’s critics say he’s tightened control over media and rewarded supporters with government jobs. Whether he would allow a local council-level vote to derail the Jadar Valley project remains to be seen. But miners have often benefitted from authoritarian governments’ willingness to push through projects.And Rio is no stranger to difficult ventures. It’s advancing the Simandou high-grade iron ore deposit in Guinea where it’s helping build a 600-km rail line and port. It’s considered Africa’s largest mining and related infrastructure project. In Arizona, the company is facing opposition to its Resolution copper project from the Apache Stronghold coalition of tribes.Big M&ARio has little experience in lithium, with most of its production in iron ore, aluminum and copper. However, this month it announced the $6.7 billion acquisition of Arcadium Lithium (ASX: LTM; NYSE: ALTM) to become the third-largest lithium miner. It has also been developing the Rincon lithium brine project in Argentina. It expects first lithium from a pilot plant, and a feasibility study and final investment decision on the wider project this quarter.At Jadar, Rio plans to apply in December for a permit allowing geotechnical work while prepping an environmental impact assessment that could take two years to complete. In third-quarter production results this week, Rio repeated comments about the project:“We continue to believe that the Jadar project has the potential to be a world-class lithium-borates asset that could act as a catalyst for the development of other industries and thousands of jobs for current and future generations in Serbia.”Rio Takes step toward M&A redemption with $6.7 billion lithium betLast month, Rio CEO Jakob Stausholm flew to Serbia to participate in public information meetings that were broadcast on television. He was combatting what the company and Serbia’s mining and energy ministry have called disinformation campaigns. Media have reported the spread of online conspiracy theories like the project will trigger sulphuric acid rain, pollute drinking water or even secretly mine uranium.Even so, Stausholm said locals have pertinent concerns about air quality and soil contamination that he and the company are working to allay. Rio seeks “to encourage an open, fact-based dialogue” in legally mandated public consultations, it said this week.Environmental oppositionThe project, which began after Rio geologists discovered the hard rock deposit in 2004, has fostered strong opposition throughout its history, said Teresa Kramarz, assistant professor at the University of Toronto’s School of the Environment. Some studies after exploration showed elevated boron, arsenic, and lithium in nearby rivers, she said.“These protests and environmental costs highlight the need for wider conversations about trade-offs,” Teresa Kramarz, assistant professor at the University of Toronto’s School of the Environment, said by email.“The idea that there’s only one way to decarbonize, and people will inevitably accept transfers of risk from one population to another or trade one type of risk for another is not going to work – particularly for those who experience disproportionate disadvantages and inequitable outcomes.”Some analysts cited by The Wall St. Journal say the current opposition since the project’s revival is remarkable for its intensity. The US State Department has said the disinformation resembles Russian campaigns, like those to discourage shale-gas drilling to maintain Russian energy dominance in Europe. Others said it’s an attempt to dissuade Belgrade’s drift to the West and potential EU membership.Cynical leftVuksanovic disagreed, while still noting the impact on the West.“The Russians are not behind it, but they take pleasure in the fact that the nationalist element of this protest is getting stronger,” he told The Northern Miner.“Moreover, even the left, civic, pro-EU segments of Serbian society are getting increasingly cynical that the West and Europe are willing to engage the incumbent government and tolerate its domestic transgressions for the sake of lithium exploitation, weakening the EU and the US’s prestige in the country even further.”Mikhail Korostikov, a visiting fellow at the Belgrade Centre for Security Policy, said vast numbers of Serbians oppose the project because they don’t believe the government is capable of enforcing environmental regulations. Even if they could, the rules aren’t strong enough, Korostikov said in a report last month for the centre.He suggested importing EU environmental structure to oversee the project and trying to create as many jobs linked to the mine as possible in areas of procurement and mineral processing. Defeating the opposition requires making the project’s benefits more significant than any environmental consequences, he said.“This will require serious courage and strategic vision on the part of all those involved in the political process, but it is essential,” Korostikov said. “There may not be another opportunity like this to integrate into the new economy and gain a bargaining leverage with the EU in the coming decades.”Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com