(Bloomberg) -- Serbia and the European Union signed a framework agreement on providing critical raw materials across the bloc as the Balkan nation seeks to leverage a planned lithium mine to become a hub for electric vehicle production.
The venture that aims to solidify supply chains of critical raw materials to Europe has been overseen by German Chancellor Olaf Scholz and Serbian President Aleksandar Vucic, who sealed an agreement in Belgrade on Friday. The move comes after reactivation last week of a $2.4 billion project by global miner Rio Tinto Group to develop Europe’s biggest lithium mine.
Mercedes Benz AG chief Ola Kaellenius and representatives from Stellantis NV, carmakers that have built EV battery links with a joint venture, also signed a letter of intent in Belgrade to invest in developing EV battery outputs.
Creating a broader lithium industry — rather than just exporting the raw material — has been a key demand of the Serbian government in backing Rio’s so-called Jadar project as it seeks to capture value from its natural resources and support the EU’s green transition.
European Commission Vice President Maros Sefcovic, who accompanied Scholz to Belgrade, said that Serbia would “occupy a central place in the most important strategic supply chains.” With the EU already the top investor in Serbia, “even more European companies will be lining up to invest” in the country, he said.
The EU has been wholly reliant on lithium imports that are a crucial component to batteries. The bloc has pursued the development of its own EV supply chain to ease dependence on imports from Asia. Should the mine be developed, it will be a major boost to Rio, Serbia’s economy and Europe’s ambitions toward a carbon-free future.
“This is not a chance we’re going to miss,” Serbian Finance Minister Sinisa Mali told reporters before the signing, estimating the creation of 20,000 new jobs. Lithium mining will help add €6 billion ($6.5 billion) in investment to the Serbian economy, Vucic said after the ceremony.
Project Halt
Serbia halted the Rio project in 2022 to defuse protests by environmental activists, but its top court lifted the ban last week, even as opponents pledged to block roads and railways to prevent possible pollution from the planned mine.
Already on Friday, protesters gathered outside the government headquarters at two separate rallies, some chanting against Scholz and Vucic. “Serbia is not for sale,” read one of the banners at the protest.
Scholz defended the project in comments to reporters Thursday, saying that the mining would be carried out in a way which won’t create “substantial damage to the environment”. He said that people cannot criticize new mining projects in Europe while mining of certain materials was restricted to a few countries - “among them a very big country in the East.”
--With assistance from Chris Reiter.
(Updates with comments from EU vice president in fifth paragraph and details on protests in 9th graph.)
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