Serbian government revokes license for Rio Tinto's Jadar lithium project

Serbia on Thursday revoked Rio Tinto's lithium exploration license, bowing to protesters who opposed the Anglo-Australian mining giant's development project on environmental grounds.

Serbian Prime Minister Ana Brnabic said the government's decision came after various green groups called for a halt to the $2.4 billion Jadar lithium project, which, if completed, would help make Rio Tinto one of the top 10 lithium producers.

"all decisions (related to the lithium project) and all licenses have been cancelled," Brnabic told reporters after the government meeting. "as far as the Jadar project is concerned, it's over."

Earlier this week, Rio delayed the first production of the Jadar by one year to 2027, citing key approval delays.

Rio Tinto said it was "extremely concerned" about Serbia's decision and was reviewing its legal basis.

The company only worked on the project last year because global miners are promoting the metals needed to transform green energy, including lithium, which is used to make batteries for electric cars.

Brnabic accused Rio of providing insufficient information to the community about the project. Rio Tinto said in a statement that "it has been abiding by" Serbian law.

Last year, thousands of people blocked roads to protest government support for the project, demanding that Rio Tinto leave the country and forcing local municipalities to cancel plans to allocate land for the facility.

Thursday's decision came as Serbia approached a general election in April, and relations between Belgrade and Australia deteriorated after tennis star Novak Djokovic was high-profile expelled from Australia because of the country's covid-19 entry rules.

The Serbian populist ruling coalition, led by the Serbian Progressive Party (SNS), initially showed support for lithium and copper mining, a position that came under fire and helped weaken the party's majority lead in the 2020 vote.

Sasa Djogovic, of the Belgrade-based Market Research Institute, said the ruling elite "are losing popularity and are therefore forced to meet the demands of the radicals."

The coalition led by SNS is expected to hold parliamentary and presidential elections on April 3, but the date has not yet been officially confirmed by President Alexander Vucic.

"We are listening to the voices of our people, and even if we think differently, it is our job to protect their interests," Brnabic said on Thursday.

Earlier this month, Brnabic said Rio's Jadar development might not be suspended until at least after the election.

"A compromise may be reached after the election to renegotiate royalties or value sharing," said one Rio shareholder, who declined to be named. "