EU And Serbia Sign Battery Materials Deal Amidst Controversy

The European Union and Serbia are set to finalize a deal on battery materials during a “critical raw materials summit” on Friday. The summit in Belgrade will be attended by German Chancellor Olaf Scholz, Serbian President Aleksandar Vucic, and European Commission Vice-President Maros Sefcovic.

The memorandum of understanding is a strategic move for the EU, given the crucial role of lithium in electric vehicle batteries. Serbia’s vast lithium deposits near Loznica are of particular interest, especially after Belgrade recently allowed work to resume at a contentious mining project operated by Anglo-Australian mining giant Rio Tinto.

The Serbian government green-lit the mining project earlier this week, reversing a 2022 decision to revoke Rio Tinto’s permits following mass protests over environmental concerns. This reversal came after Serbia’s constitutional court ruled that the permit cancellations were unconstitutional, clearing the way for the project’s restart.

President Vucic, whose party secured a parliamentary victory in December, has emphasized that environmental protection will be a priority, having secured new assurances from Rio Tinto. German government spokesman Steffen Hebestreit noted that the deal is set against the backdrop of a “sustainable lithium extraction project” in Serbia.

Rio Tinto estimates that Serbia’s lithium reserves could produce about 58,000 tonnes annually, sufficient for 1.1 million electric vehicles. However, opponents of the mining project remain concerned about its environmental and public health impacts. Critics argue that Serbia’s environmental regulations are inadequate and that the mine poses significant risks for the EU’s green transition.

The lithium deposits near Loznica were first discovered in 2004, but public outcry over environmental and health concerns led to a halt in the project. President Vucic has suggested that mining could begin as early as 2028.

Ahead of the summit, Vucic announced that the deal would include provisions to limit the export of raw lithium and ensure that most of the exports would be processed into Serbian-produced batteries or components.

Serbia, a candidate for EU membership since 2012, faces challenges in its accession process, particularly concerning its relations with Kosovo. The Serbian government stated that the new partnership would strengthen political ties and support long-term economic growth, aiding Serbia’s efforts to join the EU.