Economist Nebojša Katić: Rio Tinto to benefit from Jadar lithium project, not Serbia

In his article published on the web page of Radio Television of Serbia (RTS), economist Nebojša Katić analyzes the economic benefits that the government expects from Rio Tinto’s proposed lithium mine. In addition, he expresses suspicion that insisting “only on the environmental consequences of this project can come back like a boomerang.”

Katić points out the upcoming environmental impact study could”‘prove’ lithium exploitation does not endanger the environment or that it endangers it marginally.” He made the assumption in an opinion piece published on the website of public broadcaster RTS.

The economist introduces a hypothesis that the environmentalist point of view in the anti-mining campaign could be shaken by the expert assessment. It could affect the strength of the arguments against opening the lithium mine, Katić added.

The revenues would not remain in Serbia, according to Katić

He also emphasizes that the potential economic benefit from the Jadar project would certainly not go to Serbia but to Rio Tinto. “Once again: the key question is whether the mine’s economic and strategic benefits can compensate for the damage it would cause to the people and nature – this applies to all investments, not just the mines,” Katić wrote.

The growth in the gross domestic product wouldn’t come near to the numbers that are being floated, as much as EUR 10 billion a year, he claims. Katić referred to an article in the Financial Times, where the sum was cited as what the mine would add to Serbia’s GDP. “The figures are based on the calculations of the Serbian government, and according to them, the Jadar project should increase the gross domestic product by about EUR 10 billion a year, or by an incredible 22 percent of the current GDP,” Katić points out.

An article in the British media outlet quotes Rio Tinto’s projection that the mine would add 1% directly to Serbia’s GDP increase and another 4% in an indirect way. At the same time, the report adds the government has even higher expectations. It envisages a boost of EUR 10 billion to the economy per year from the “benefits from making Jadar part of a battery metal supply chain from mining to EV production”, FT writes.

Katić asserted revenues from possible exploitation and exports would increase Serbia’s gross domestic product but that, as a rule, the revenues belong to Rio Tinto and that they would not remain in Serbia.

“Serbia will have mining royalties from that, maybe Rio Tinto will pay some taxes, and some will even get a salary working for Rio Tinto. That is where the financial benefits for Serbia will end, and they will be incomparably lower than the statistical GDP growth,” Katić wrote.