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25/06/2024
Mining News

Expert explains why Rio Tinto should build a spa in Mačva

International expert in environmental strategic planning, Dušan Vasiljević, explained his earlier claim that the company Rio Tinto could build a spa in Mačva, comparing the economic benefits that the state could derive from spa tourism and lithium mining.

“People make a joke about my statement that Rio Tinto should build a spa, but it was not without merit. Mačva has the richest thermal waters in Serbia. A spa complex with 1,000 beds can certainly be built there, without exaggeration, as they do in Hungary, for example,” said Vasiljević in an interview with the newspaper Nova.

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He notes that in 2022, Serbia had 12 million overnight stays with 2.2 billion in revenue, meaning that each tourist spends around 180 EUR per day (on accommodation, food, and other expenses).

If a spa operates at 55% capacity throughout the year, that is 200 days, which is realistic for spa tourism, you could generate an additional 36 million euros in tourism revenue. Mačva would have broader benefits; it would stimulate the development of local agriculture, services, and small and medium-sized enterprises, according to Vasiljević’s calculation.

He emphasizes that it would be beneficial for Rio Tinto to say that they have done something positive, and at the same time, all that money generated by direct and indirect activities would remain in Serbia.

On the other hand, when it comes to lithium mining, he estimates that the state will profit at best $16 million annually.

Emphasizing that the contract between Rio Tinto and Serbia has never been seen by the public, and thus we do not know what has been agreed upon, he adds that the only certainty is that the state has the right to mineral rent.

That is the only thing guaranteed here as income. In Serbia, for this type of exploitation, the mineral rent is 5% of revenue. The price of lithium carbonate, as the end product of ore extraction and enrichment, varies and is currently around $13,500 USD. It is estimated that Jadar would produce 24,000 tons of this product annually, and when multiplied by the current price and calculated at 5%, it amounts to $16 million USD, says the interviewee from Nova.

He emphasizes that the real question is whether the state will even get that much because according to our regulations, the entity exploiting mineral resources reports how much ore it has extracted and how much revenue it has generated.

I’m not claiming that someone will deceive the state, but there is a broad scope for interpretation of how much ore each entity has actually extracted from the ground and how much they have reported. Serbia has only three republic mining inspectors. That is a very small number that cannot control all those involved in mineral resource exploitation to ensure they comply with regulations, says Vasiljević.

When it comes to the workforce, he points out Rio Tinto’s statements that the exploitation process will be automated, meaning very little manpower.

And even if there is, it is highly questionable who will work there. Existing mines do not have enough miners. Will we import miners from Nepal, from Sri Lanka, as bus drivers come from there now? If that happens, they will collect everything they earn and take it home – warns the expert.

He also adds that the state will provide infrastructure for free, and certain subsidies are expected.

If they receive 5,000 to 10,000 EUR per worker, the investor will practically have covered the costs of taxes and contributions on salaries. When you add it up, the state will, at best, get those $16 million USD annually. Is that enough for Serbia to deal with all the potential problems that such exploitation objectively brings? asks Vasiljević.

 

Source: Serbia Business.news

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