By Ivana Sekularac
BELGRADE (Reuters) -Serbia revoked Rio Tinto (LON:RIO)’s lithium exploration licences on Thursday, bowing to protesters who opposed the development of the project by the Anglo-Australian mining giant on environmental grounds.
Serbian Prime Minister Ana Brnabic said the government’s decision came after requests by various green groups to halt the$2.4 billion Jadar lithium project which, if completed, would help make Rio a top 10 lithium producer.
“All decisions (linked to the lithium project) and all licences have been annulled,” Brnabic told reporters after a government session. “As far as project Jadar is concerned, this is an end.”
Earlier this week, Rio had pushed back the timeline for first production from Jadar by one year to 2027, citing delays in key approvals.
Rio Tinto said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.
The company committed to the project just last year, as global miners pushed into the metals needed for the green energy transition, including lithium, which is used to make electric vehicle batteries.
The mine was slated to produce enough lithium to power 1 million electric vehicles, in addition to boric acid, used in ceramics and batteries, and sodium sulphate, used in detergents. At full capacity, the mine was expected to produce 58,000 tonnes of refined battery-grade lithium carbonate per year, making it Europe’s biggest lithium mine by output.
Brnabic accused Rio Tinto of providing insufficient information to communities about the project. In a statement, Rio said “it had always operated in compliance” with Serbian laws.
Thousands of people blocked roads last year in protest against the government’s backing of the project, demanding Rio Tinto leave the country and forcing the local municipality to scrap a plan to allocate land for the facility.
Thursday’s decision comes as Serbia approaches a general election in April and as relations between Belgrade and Australia have soured after Sunday’s high-profile deportation of tennis star Novak Djokovic from Australia over the country’s COVID-19 entry rules.
Djokovic himself spoke out in support of “clean air” in a December Instagram story post captioning a picture of the protests, which was published by digital sports platform The Bridge.
Twitter (NYSE:TWTR) users were quick to joke about Rio being deported from Serbia.
Serbia’s populist ruling coalition, led by the Serbian Progressive Party (SNS), had initially showed support for lithium and copper mining, a stance that made it come under fire, helping erode the comfortable majority the party enjoyed in a 2020 vote.
Sasa Djogovic of the Belgrade-based Institute for Market Research said the ruling party “is losing popularity and because of that it is forced to fulfil the demands by activists.”
The SNS-led coalition is expected to hold parliamentary and presidential elections on April 3, although the date is yet to be officially confirmed by President Aleksandar Vucic.
“We are listening to our people and it is our job to protect their interests even when we think differently,” Brnabic said on Thursday.
The Jadar project, one of Serbia’s biggest foreign investments, was part of government efforts to draw in investment and boost economic growth. But environmental groups in Serbia, which has been heavily scarred by industrial pollution, say the new mine will pollute land and water in area.
Earlier this month, Brnabic had said the project would be likely paused at least until after the elections.
“A compromise will be probably reached after the elections, so that there could be a renegotiation of royalties or value-sharing,” said a Rio Tinto shareholder, who declined to be named.
The project was technically complex with Rio developing technology to economically extract lithium from jadarite, a mineral that has only been found in Serbia’s Jadar valley.
“Serbia historically is not a mining jurisdiction and I don’t see how anyone else would have a go,” said analyst Ben Davis at Liberum.
Serbia revokes Rio Tinto lithium project licences amid protests