As 2021 drew to a close, thousands of Serbians were drawn to the streets to protest against one greenfield project: Rio Tinto’s Jadar $2bn lithium mining plant.

Bowing to the protesters’ pressure, the Serbian government revoked Rio Tinto’s lithium exploration licences and Serbian prime minister Ana Brnabić publicly declared on January 23 that “this is the end of the Jadar project: it’s over”.


In one fell swoop, the hopes of what would have been Europe’s biggest lithium project were dashed. Slated to supply enough lithium for the production of more than one million electric vehicles (EVs) per year, it was also set to contribute to Serbia’s gross domestic product by 1% directly and 4% indirectly.

But for the Anglo-Australian mining giant, it is not game over just yet. A spokesperson for Rio Tinto told fDi: “We are disappointed by the announcement from the government. We are committed to exploring all options and reviewing the legal basis of the decision and the implications for our activities and people in Serbia.”

Whatever the final outcome, the suspension of a globally significant lithium mining project bears out the mismatch between Europe’s bid for self-sufficiency within its green transition ambitions and its citizens’ antipathy towards greenfield mining projects.  

Lithium mining projects of varying sizes have been popping up in locations across Europe over recent years, from Cornwall in the UK to the Upper Rhine Valley in Germany and the west coast of Finland. But without more policies and lending mechanisms from the EU, Europe risks missing out on the possibility of ramping up its upstream opportunities. 

Dented lithium prospects

George Miller, senior price analyst at Benchmark Mineral Intelligence, says that the suspension of Rio Tinto’s project has “really dented the prospect for self-sufficiency and lithium supply for Europe”, while underscoring the need for companies to engage with local communities on new greenfield mining projects. 


Too often, mining companies feel that when they’ve made a deal with the government, it’s all sorted; but that’s not the case

George Miller

“It’s really the companies themselves that need to interact with the local communities and make sure they’re involved in the decision making processes and fully comfortable with the local impacts of the project, whether that be noise pollution or environmental changes to the ecosystem,” he explains.

“Too often, mining companies feel that when they’ve made a deal with the government, it’s all sorted. But that’s not the case,” he says. “There needs to be an open, friendly dialogue with the community.”

Elsewhere in Europe, other projects are underway. In Finland, where there are fewer concerns about mining projects, the mining and battery chemical company Keliber signed a bridge financing agreement worth €40m with South Africa-based Sibanye Stillwater. It expects to produce lithium hydroxide from 2024 using deposits in the municipalities of Kaustinen, Kokkola and Kronoby. Keliber received a mining permit for another mining area, Rapasaari, on March 23.

Hannu Hautala, CEO of Keliber, tells fDi that the project in Finland is not dogged by such problems. “We do not expect the same kind of opposition here [as with the Jadar project]. Our neighbours are supporting us, not resisting us,” he says.

In the Upper Rhine Valley in Germany, Australian-German Vulcan Energy Resources is looking to extract lithium directly from the ground using heat from its geothermal brine, meaning that it will be a carbon-neutral process. It expects to start production by 2024 and reach a total of 40,000 tonnes of lithium hydroxide per year from 2025.

In December, German carmaker Volkswagen clinched a deal to source lithium produced by the Vulcan Group to supply its European battery cell factories.

Mining issue, not a lithium issue

Rebecca Campbell, partner and head of global mining and metals at law firm White and Case, says that the Rio Tinto suspension is not surprising and is more of a mining issue than a lithium issue.

“We see this all the time and I would be more concerned for that project outside of Europe than inside of Europe, because of the strong imperatives for Europe to diversify its supply of battery minerals,” she says.

But Ms Campbell does point out that within the EU at least, more could be done to give access to credit to some of the smaller scale projects.  

At one end of the spectrum, there is the Rio Tinto mega project, owned by a major global mining company, which can finance development without resorting to project finance. At the other, there are other projects attached to smaller listed mining companies.

​​These “little guys”, she says, will need either to be bought out by a major mining company or raise project financing in order to bring their projects to fruition, and it is the lack of stable long-term offtake contracts that has been holding back those wanting to raise project financing in the lithium sector.

Encouraging automakers to enter into contracts with lithium producers or providing debt financing through institutions such as the European Bank of Reconstruction and Development, she believes, will have more of an enabling effect than any kind of regulation. “The EU can set all the targets it wants, but the question is how can it achieve them?” 

Big ambitions, smaller actions

Europe has the ambition to get there, but there is a lack of action, analysts say, even despite the policy moves of recent years. 

In 2020, the EU established the European Raw Materials Alliance, which brought together partners from industry, financial institutions, universities, non-government organisations and trade unions, among others, to strengthen Europe’s supply chain from raw materials to recycling.

But Max Reid, battery raw materials research analyst at consultancy Wood Mackenzie, says that there still needs to be more legislation driving the industry, not only in raw materials but also in recycling. “There are a number of lead-acid battery recyclers who are very keen to go into the lithium-ion battery sector,” he says.

But even including the Jadar project, European supply of refined lithium chemicals would only be 6% of that of China by 2030, according to Wood Mackenzie. 

Nonetheless, Mr Reid believes that the Jadar project will come off. “In 10 years time, if you think about how differently EVs are viewed now compared to five years ago ... this will be even more so, especially with reliance on other nations and will likely have some influence on how these projects are viewed,” he says. 

“The Jadar site is a big resource in Europe and that resource won’t go away.”

This article first appeared in the April/May 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.