Raw materials - Scholz in Belgrade: Lithium-Agreement with Serbia
Federal Chancellor Olaf Scholz (SPD) will call into life an EU partnership with Serbia for the extraction of lithium for electro cars at a EU-Partnership event in Belgrade on Friday. During his visit, he will participate in the signing of an agreement that aims to enable environmentally friendly funding for the valuable metal in the Jadar Valley, where one of the largest European reserves of the extremely scarce and valuable raw material, essential for battery production, lies.
Scholz flew directly from the European summit in the UK to Belgrade in the Serbian airspace, which was escorted by two Serbian fighter jets – a special honor for the German guest. His arrival was broadcast live on Serbian television, and Vucic personally welcomed Scholz at the airport, despite his late-night landing. This is also unusual.
EU sets itself against China
For both sides, the raw material agreement is significant. Serbia's goal is to build a value chain for electromobility from the extraction of the raw material to battery production. This means state revenues, investments, and jobs, but also closer ties to the EU for the country that seeks EU membership.
For Scholz, the agreement is part of his China strategy, aimed at reducing dependence on the second-largest global economy. China controls a large portion of the global lithium mining and processing. One cannot at the same time lament the situation and not want to engage in lithium mining ourselves, Scholz said before departing for Belgrade. "This must happen in many places around the world, but it must also be done in a way that benefits the economy while keeping the environment clean."
China had also shown interest in the lithium mining in Serbia, with President Xi Jinping visiting Belgrade in May. That they have managed to secure the project as Europeans is celebrated as a significant success from the German side, which could potentially also have repercussions for other raw material projects.
Lithium for over a million electric cars per year
The agreement has a longer history. Three years ago, the Australian mining giant Rio Tinto announced plans for a billion-dollar investment. According to the company's estimates, the planned mine could produce 58,000 tons of lithium per year, which would meet the demand of approximately 1.1 million electric vehicles, accounting for about 17% of European production.
Mercedes-Benz and Stellantis are already in negotiations with Rio Tinto over a stake in the project. These companies, along with others, will sign an intentional declaration of cooperation with the Serbian government on Friday.
Environmentalists worry about water supplies
However, the project is highly controversial. Environmentalists criticize, among other things, that lithium mining contaminates groundwater with heavy metals and poses a threat to the drinking water supply of local residents. In the Chancellery, it is argued that the involvement of German companies is the best way to ensure an environmentally friendly mining operation.
The Serbian government opened the way for the project just a few days ago. It referred to a recent Constitutional Court ruling. This court had declared the 2022 annulment of the spatial planning procedure for the Lithium Project as unconstitutional.
Environmental activists view this decision as a favorable one towards the government. The criticism of the project is one of the most important issues of the Serbian opposition. This opposition accuses the West of turning a blind eye to Vucic's erosion of democracy and the rule of law, as well as his close ties to Russia, due to Lithium.
Background report by BIRN, English
- The journey of Federal Chancellor Olaf Scholz from the European summit in Southern England to Belgrade was a significant one, as he was headed for an EU-Partnership event to discuss lithium extraction for electric cars.
- The Federal government of Germany is keen on securing lithium, a crucial raw material for battery production, from the Jadar Valley in Serbia, known for having one of Europe's largest reserves of this scarce and valuable metal.
- Serbia aims to establish an electromobility value chain, from raw material extraction to battery production, through this project, which could lead to substantial revenue, investments, and job creation.
- Maros Sefcovic, a high-ranking European Commission official, will also be present at the Belgrade event, emphasizing the EU's increased interest in Serbia's electromobility initiatives.
- The agreement is critical for Scholz as part of his China strategy, aiming to reduce dependence on China, which has substantial control over global lithium mining and processing.
- The Chinese President Xi Jinping had shown interest in Serbia's lithium mining earlier, but securing the project as Europeans is seen as a significant achievement by the German side, potentially influencing future raw material projects.
- The anticipated production of lithium from the proposed mine in Serbia is vast, enough to power over a million electric cars annually, making up about 17% of European production.
- Mercedes-Benz and Stellantis are among the companies interested in a stake in the project, planning to sign an intentional declaration of cooperation with the Serbian government at the upcoming Belgrade event.
- Concerns about water contamination due to lithium mining and its potential impact on local drinking water supplies are raised by environmentalists, despite German involvement being seen as a way to ensure environmentally-friendly extraction methods.
