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14/11/2024
Mining News

Serbia advances electric car production and lithium mining amidst environmental concerns

Serbia is on the brink of a significant transformation, poised to become a key player in the electric vehicle (EV) sector and lithium production. Last week, the European Union approved Serbia’s plan to develop a lithium mine in the Jadar Valley, a move expected to bolster the country’s economic and environmental credentials.

This week, Serbia received a major endorsement from Stellantis, the automotive giant behind brands like Alfa Romeo, Citroën, Fiat, and Opel. Stellantis chose Kragujevac, Serbia, as the site for its new electric Fiat Grande Panda production line. The nearly €200 million investment, which includes a €48 million subsidy from the Serbian government, is set to begin full production in October, creating 1,000 jobs. Serbian President Aleksandar Vučić highlighted that the plant’s output would add 0.5 percentage points to the country’s GDP growth next year.

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Stellantis CEO Carlos Tavares emphasized the company’s readiness to compete with Chinese EV manufacturers, asserting, “This is a huge opportunity for us. We are the only country in the Western Balkan region that has electric car production.”

Strengthening the green transition, Vučić recently hosted German Chancellor Olaf Scholz and European Commission Executive Vice-President Maroš Šefčovič, who signed a memorandum of understanding for a strategic partnership on sustainable raw materials and electric vehicles. This agreement aims to foster local industries, create high-quality jobs, and ensure environmental and social standards are upheld.

In a related development, Serbia’s government restored Rio Tinto’s license to extract lithium from the Jadar Valley after a court ruling deemed the previous ban unconstitutional. The Jadar Valley mine, which Rio Tinto claims could meet up to 90% of Europe’s lithium needs, is set to advance.

Šefčovič praised the EU-Serbia partnership as a step toward driving the green transition and enhancing Serbia’s integration with the EU market. Scholz emphasized the importance of the mine for Europe’s economic security and Germany’s automotive industry.

Global demand for lithium, essential for EV batteries and other electronics, is expected to surge dramatically by 2040. Australia, Chile, and China are currently the leading suppliers, with Serbia’s Jadar Valley mine projected to produce up to 58,000 tonnes annually.

Despite these developments, environmental concerns persist. Rio Tinto asserts that the mine will adhere to strict environmental standards, but local NGOs and activists continue to protest, citing risks to Serbia’s largest drinking water source and ongoing public opposition.

While Serbia and Rio Tinto have secured EU backing, gaining local support for the mine remains a significant challenge.

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