Serbia and EU ink strategic lithium partnership amid controversy

The Government of Serbia and European Commission Vice-President Maroš Šefčovič signed a memorandum of understanding on strategic partnership in the field of sustainable raw materials, batteries, and electric vehicles in Belgrade on Friday.

The document was signed in the presence of Serbian President Aleksandar Vučić by the Minister of Energy and Mining, Dubravka Đedović Handanović. In addition to representatives of the Serbian government and EU authorities, German Chancellor Olaf Scholz also participated in the meeting.

The European Critical Raw Materials Act specifies a list of 17 strategic elements, such as cobalt, copper, nickel, and lithium, as well as an extended list of 34 critical materials. These raw materials are crucial in the ecological and digital transformation as the EU makes efforts to transition away from fossil fuels. For Serbia, the key raw material is lithium, which the country may have the largest reserves of in Europe.

Lithium and its compounds are used in the production of heat-resistant glass and ceramics, durable alloys in aviation, lithium cells, and lithium-ion batteries. They are a crucial component in the production of batteries for electric cars.

President Vučić said on Friday that "in Serbia, the exploitation of lithium will not be possible without full environmental and human protection." He added that he received guarantees from the EU that "the metal extraction project will be carried out in accordance with the highest standards."

The Serbian government previously stated that the partnership for sustainable raw materials would contribute to the decarbonization of energy in line with the European Green Deal and the Green Agenda for the Western Balkans. "Cooperation will result in Serbia's economic development and accelerate the country's accession to the EU," it added.

Chancellor Scholz, whose country is the largest car manufacturer in the EU, emphasized that "today we are discussing a breakthrough issue for mobility." He added, "Lithium is an essential component of this change; batteries are crucial in this regard, and lithium is essential for their production." Scholz noted that Serbia has an important role to play.

This is an important project and a contribution to maintaining sovereignty and independence in raw material supplies, said Scholz, commenting on the signing of the memorandum of understanding.

Earlier this week, the Serbian government unblocked a lithium extraction project in the Jadar Valley in the west of the country that had been halted two years ago. The project was suspended after massive protests by activists and citizens pointing out the negative environmental impact of the mine.

On Friday, in front of the Palace of Serbia where the meeting with EU and German representatives took place, Serbian opposition MPs held a conference at which they said that "by signing the agreement, they are signing a death sentence for the Jadar Valley."

Friday's meeting in Belgrade was commented on before its start by newspapers from Germany and Austria. "Serbia wants to supply Europe with lithium while at the same time developing close relations with Russia and pursuing policies that could threaten the security of the Western Balkans. Belgrade is playing a double game in which the West feels lost," assessed the German "Die Welt."

The Austrian "Standard" noted that "Scholz is ready to embrace an autocrat to obtain an important raw material."

Germany is Serbia's most important country both politically and economically. If the German government stops insisting on democratic standards for its own interests, the high price will be paid by the citizens of Serbia, the newspaper stated.

Member of the German Bundestag Knut Abraham of the Christian Democratic Union (CDU) warned that "Vučić, like Putin before him, can conduct aggressive policies towards his neighbours with impunity due to his economic ties with the West."

Geologists estimate that the Jadar Valley may contain the largest lithium deposits in Europe. Researchers from the Economist Intelligence Unit noted that "lithium extraction could be highly profitable for Serbia."

The country holds 1.3% of the world's known metal reserves. The estimated value of Serbian lithium is CAD 5.8 billion, and its extraction over ten years could provide hundreds of jobs and a steady stream of revenue for the government, analysts emphasized.