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25/06/2024
Mining News

Concerns mount over Rio Tinto’s persistent investments in ‘Jadar’ lithium project despite cancellation

Representatives from the March from the Drina movement and the “Đorđević” law office have disclosed that Rio Sava, a subsidiary of Rio Tinto in Serbia, has continued to invest heavily in the “Jadar” project for lithium exploitation near Loznica, even after its cancellation. Bojana Novaković, an activist from the Marš sa Drine, revealed at a press conference that Rio Sava had spent €92 million over the past two years on feasibility study preparations, despite the project being halted by the Serbian government’s decision.

Rio Sava, a subsidiary of the Australian mining giant Rio Tinto, was established in Serbia to oversee the “Jadar” project, which aimed to extract lithium in the Jadar region near Loznica. However, in January 2021, following opposition from environmental activists and the public, the Serbian government canceled the project due to concerns about its impact on public health and the environment.

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Novaković emphasized the importance of transparency regarding Rio Sava’s financial data, urging the disclosure of information from the company’s financial reports filed with the Business Registers Agency (APR) of Serbia. She stressed that while Rio Tinto threatens Serbia with arbitration, the courts will evaluate not only the amount of money spent but also the purpose of expenditure, especially considering that the project has been terminated, shifting the risk to the investor.

To scrutinize Rio Sava’s financial activities, the Marš sa Drine movement enlisted the services of the “Đorđević” law office. According to Sreten Đorđević, the law office found that Rio Sava had spent €411 million by the end of 2022, with €388 million deemed as losses. Despite the project’s suspension, Rio Sava continued to spend €100 million in 2023, totaling €511 million since its inception. Notably, the company allocated €300 million for intangible services during the period of project suspension and legal disputes, primarily for consulting services and payments to related parties abroad.

Đorđević highlighted concerns about the transparency and legality of these transactions, especially regarding consulting fees paid to related parties and whether they were performed at market prices. He emphasized the need for further investigation into potential tax violations, money laundering, or other legal infringements.

Furthermore, Đorđević revealed that Rio Sava faces administrative disputes and legal challenges related to the termination of the project, including attempts to obtain permits for mining activities despite the project’s cancellation. He questioned the company’s motives and expenditures, particularly its engagement in feasibility studies when the project is halted.

In response to these revelations, Minister of Mining and Energy Dubravka Đedović Handanović emphasized the need for informed dialogue and responsible decision-making regarding mining projects in Serbia. She reiterated the government’s commitment to raising mining standards and complying with environmental and social regulations.

Despite protests and the cancellation of the “Jadar” project, concerns persist over Rio Sava’s financial activities and its ongoing efforts to resume mining operations.

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