The EU’s Raw Materials Diplomacy: Serbia as a Test Case

First phase (2004–2022): Criticism of the mining project and a short-lived protest victory

As early as 2004, Rio Sava began the geo­logical exploration of the Jadar Valley, which is a predominantly agricultural region in western Serbia near the small town of Loz­nica. Over the following years, Rio Sava conducted around 500 exploratory drillings and discovered Jadarite, a mineral that is unique in the world due to its com­position. Jadarite is rich in lithium and boron and can be used for the production of lithium carbonate, boric acid, and sodium sulphate.

According to estimates by the German Mineral Resources Agency (DERA), the planned production volume of 58,000 tonnes of lithium carbonate per year could cover between 10 and 15 per cent of Europe’s lithium demand by 2030.

In 2017, the Serbian government and Rio Sava signed an MoU, which included the estab­lishment of a joint working group to im­plement the Jadar Project. The first pro­tests in the region emerged in 2020, when the government adopted the regu­lation for the “Spatial Plan of the Special Purpose Area for the Implementation of the “Jadar” Project of Exploitation and Pro­cessing of Jadarite Mineral”. The protesters criticised the lack of transparency and the absence of a public debate regarding the planned expansion of the mining sector in Serbia; the environmental risks associated with the extraction and processing of the mineral and the storage of industrial waste; and the uncertainties encountered by land­owners who might face expropriation if they refused to sell their property voluntarily.

In September 2021, the protests reached the capital, Belgrade. After sustained and increasingly nationwide pressure on the government, the authorities revoked all permits previously granted to Rio Sava in January 2022, including the spatial plan, and declared that the project would not be realised.

Second phase (2022–2023): Criticism of the government’s reversal and the lack of trans­parency and participation

However, shortly after, President Vučić declared that halting the project had been his “biggest mistake”. This statement – made immediately after his victory in the parliamentary elections – led critics to suspect that the previous suspension of the project had been merely a tactical move for electoral purposes.

Three further developments fuelled doubts about the finality of the project’s cancellation. A petition submitted to the National Assembly in June 2022, signed by about 38,000 people, calling for a poten­tial ban on the exploration and mining of lithium and boron in Serbia was declared “lost”. This raised concerns, since the National Assembly is legally required to respond to petitions with more than 30,000 signatures. Additionally, the Ministry of Mining and Energy did not terminate the licensing process for the mining permit as legally required. Instead, it extended the deadline for completing the required docu­mentation 18 times without providing any justification. Furthermore, in September 2023, the Serbian government signed an initial Letter of Intent with the European Commission to establish a strategic raw materials partnership, which was formalised into a more concrete MoU in July 2024. These events gave parts of the population the impression that the project was being pushed forward – despite the official halt – by the Serbian government, the EU, and espe­cially Germany, whose automotive indus­try has a strong interest in Serbian lithium.

The lack of response to the petition and the partnership agreement with the Euro­pean Commission further deepened frustra­tion over the lack of transparency and the inadequate level of participation by civil society.

Third phase (since 2024): Resumption of the project, pro­tests against the government and the EU

In July 2024 – shortly before the signing of the EU-Serbia raw materials partnership – the Serbian Constitutional Court invalidated the January 2022 decision to annul the already approved spatial plan. It justified this by stating that the government had ex­ceeded its competencies with the project’s suspension and had therefore acted un­constitutionally.

Two of the ten judges of the Constitutional Court criticised the Court’s hasty deci­sion and the fact that a ruling had been made without initiating a formal procedure – an occurrence that had only happened twice in the past 11 years. Nevertheless, shortly thereafter, the Serbian government issued a decree reinstating the previously suspended spatial plan for the Jadar Project.

This decision triggered another wave of major protests across the country, to which the government responded with increasing levels of repression in the form of police raids, arrests, and the public defamation of opponents of the project.

A bill introduced by the opposition in September 2024 to ban lithium mining in Serbia was rejected by a majority in par­lia­ment. This further intensified the frustration of the protesters, who by now were not only criticising the government’s actions but, since the signing of the partnership agreement, were increasingly directing their criticism towards the EU as well.

Environmental risks

According to Serbian law, mining projects must undergo an environmental impact as­sessment under certain conditions in order to evaluate their potential effects. The scope and content of the assessment are determined by the relevant authorities.

In November 2024, Serbia enacted new laws on Environmental Impact Assessments and Strategic Environmental Assessments. However, these laws are not yet fully aligned with corresponding EU directives, and the bylaws required for their application are still pending. Furthermore, the European Commission has repeatedly pointed out significant deficiencies in the implementation of these laws and emphasised the need for structural reforms to strengthen admin­istrative capacities at the national and local levels, in regulatory authorities, and within the judiciary.

In November 2024, the Ministry of En­viron­mental Protection defined the scope and content of the environmental impact assessment for the underground mine in the Jadar Valley. Rio Tinto is obliged to sub­mit the required study within one year. How­ever, the ministry’s decision has been criticised. Rio Tinto only submitted an application for an assessment of the under­ground mine, even though environmental impact assessments are also required for the processing plant and the tailings storage facility.

Therefore, the Belgrade-based Renew­ables and Environmental Regulatory Insti­tute (RERI) fears that Rio Tinto intends to avoid an evaluation of the project’s overall impact through this artificial segmentation, a practice known as “project splitting”, numerous cases of which have already been documented in Serbia. In some instances, companies have allegedly acted with the knowledge and support of the responsible state authorities in an effort to obscure cumu­lative environmental impacts or entirely bypass the requirement for an environ­mental impact assessment.

It is the responsibility of Serbian authorities to prevent such improper project prac­tices and to ensure a transparent and legally compliant environmental impact assessment.

According to Energy Minister Dubravka Handanović, it could take another two years before all of the necessary permits for the project’s implementation are obtained. A decision by the Assembly of the City of Loznica on the local spatial plan is also re­quired for the project’s realisation. Environ­mental activists in Serbia have already announced massive protests.

Regulatory oversight by Serbian author­ities has repeatedly failed in the mining sector in recent years. One example is the Chinese-Serbian joint venture Serbia Zijin Copper DOO Bor, which operates Serbia’s largest copper mine and smelting plant. According to experts, the relevant author­ities rarely hold Zijin accountable for regu­larly exceeding permissible sulphur dioxide emissions and polluting rivers.

Additionally, Zijin has been convicted seven times in the past four years for illegal construction activities; in five cases, only fines below the legally required minimum penalties were imposed. This has undermined the public’s trust in the authorities and in their willingness to enforce environ­mental regulations.

Amid general criticism of the integrity of Serbian authorities, a debate has emerged regarding the information that is available on the Jadar Project. According to Rio Tin­to’s current plans, approximately 220 hec­tares of land will be required for the under­ground mine and processing plant, with an additional 167 hectares needed for the industrial waste landfill.

In addition to the resulting loss of agricultural land, forests, and biodiversity, critics fear negative effects on the region’s drink­ing water reservoir and on the adja­cent rivers Drina and Jadar. These risks are to be analysed in the already mentioned environmental impact assessment, with pre­liminary drafts for the assessment having been published by Rio Tinto in June 2024.

However, doubts have been raised about the credibility of these drafts. Scientists from the Faculty of Biology at the University of Belgrade, who were originally involved in preparing a report for Rio Tinto, con­cluded that the project posed significant risks to the ecosystem and distanced them­selves from the company’s claims.

A study published in a scientific journal in July 2024 on the impact of the Jadar River and the soil near the exploratory drill holes, which had allegedly already been affected by the test drillings, further reinforced these concerns. Rio Tinto raised doubts about the study’s data collection methodology and requested its withdrawal. However, the sub­sequent revisions made by the authors were minor, and the journal did not find fault with the methodology. Rio Tinto, on the other hand, argues that the elevated heavy metal concentrations in the Jadar River were caused by the collapse of the tailings dam at the former “Stolice” antimony mine during the 2014 floods and denies any con­nection to the exploratory drilling.

Assessing this controversy is further com­plicated by the fact that, according to Rio Tinto, one of the eight authors had repeat­edly spread false claims about the project. Additionally, in December 2023, he ran as a mayoral candidate in Belgrade for a Euro­sceptic, ultranationalist, and pro-Russian opposition coalition, raising questions about his scientific independence.

Another unresolved question is who would be responsible for cleanup costs if the project were to cause an environmental disaster. Rio Tinto has attempted to counter this criticism, stating that it models ex­treme­ly rare events, such as catastrophic floods, and designs the mine’s infrastructure accordingly. Furthermore, Rio Tinto asserts that it is legally required to obtain insurance that would cover third-party damages in the event of an accident. How­ever, many Serbians remain sceptical, as the mere existence of legal regulations does not necessarily guarantee that the respon­sible authorities will actually ensure com­pliance.

There is widespread doubt among the public about both the willingness and the ability of Serbian authorities to adequately enforce environmental laws. Additionally, due to the repression of Serbian civil soci­ety, there is a lack of independent actors who can monitor the available data – espe­cially since many people in Serbia distrust the data provided by Rio Tinto. Their scep­ticism is reinforced by the fact that Rio Tinto has faced legal action and been con­victed in other countries for violations of environmental standards. As a result, many do not view Rio Tinto as a trustworthy actor.

Economic viability

The economic viability of the project has also been a subject of contention. The Ser­bian government has successfully attracted foreign investments through an active sub­sidy policy: In recent years, the proportion of targeted state aid has ranged between 2 and 5 per cent of GDP, whereas the Euro­pean average is just 0.5 per cent. In the course of Serbia’s EU accession, it would be required to significantly reduce this rate. In recent years, the country has deepened its ties with China, which has now become Ser­bia’s second-largest investor after the EU. The Serbian government’s support for the Jadar Project can also be interpreted as a signal to the EU and the United States, in­dicating its intention to better balance its international relations and strengthen its negotiating position on the global stage.

Rio Tinto has already invested €475 mil­lion in the project and expects an additional €2.55 billion in investments, making it Ser­bia’s largest foreign direct investment to date. The company plans to create an aver­age of 1,500 jobs during the four-and-a-half-year construction phase, with a peak of around 3,500 jobs. Once fully operational, the project is expected to create 1,300 per­manent positions, of which 90 per cent should be held by Serbians.

From the first year of full production, taxes and other levies could contribute around €48 million annually to the Serbian state budget, with long-term projections estimating €185 million per year, of which €24.5 million is earmarked for the munici­pality of Loznica.

Additionally, Rio Tinto plans to spend approximately €300 million annually on supplies, with 70 per cent of them expected to be sourced from Serbia.

However, a recently published report by economists and business experts casts doubt on the figures provided by Rio Tinto, arguing that the Jadar Project offers only limited economic benefits for Serbia. The authors highlight, among other issues, uncertain infrastructure costs such as for roads and wastewater systems. So far, there are no reliable estimates for the total costs nor for the distribution of expenses be­tween the Serbian government, local munici­palities, and Rio Tinto.

The government has reaffirmed its inten­tion to establish downstream industries with higher added value within Serbia. Recently, Vučić stated that at least 87.1 per cent of the extracted lithium should be processed domestically.

Currently, the government is negotiating with various companies regarding the con­struction of a cathode factory. In September 2023, Serbia signed an MoU with the Slovak battery manufacturer InoBat to build a bat­tery factory in Cuprija starting in 2025. The Serbian government has pledged €419 mil­lion in subsidies for the project. Addition­ally, companies such as Mercedes and Stel­lantis have expressed interest in establishing agreements with Serbia to develop a lithium value chain.

Thus, the implementation of the Jadar Project could serve as an impetus for in­creased European corporate activity in Ser­bia. According to EU estimates, this could create up to 20,000 jobs. However, few con­crete commitments or results have materi­alised so far. Nonetheless, further economic commitments alone will not be enough to dispel the well-founded criticisms of the project.