Serbia’s Đedović: We have billions under our feet in strategic minerals

Minister of Mining and Energy of Serbia Dubravka Đedović Handanović acknowledged that every mining project carries environmental risks, but also stressed that every investor has to negotiate with the state about every permit. She expressed the belief that green mining of lithium is possible and said that the government intends to use strategic minerals in the economy’s best interest. “We have billions under our feet,” she told RTS.

Serbia is rich in ores of lithium, boron, cobalt, nickel, gold and silver as well as in coal, which is also a strategic raw material, Minister of Mining and Energy Dubravka Đedović Handanović claimed. “We have the opportunity, we are rich, we have billions under our feet, literally, in various strategic minerals. And we want to use them in the most efficient way in the interest, above all, of our industry, production, economic development,” she pointed out in an interview with public broadcaster Radio-televizija Srbije.

Reflecting on Rio Tinto’s controversial project for underground exploitation of lithium ore jadarite and a processing unit, Đedović Handanović agreed that mining always brings risks. “But we have a choice. Primarily in permitting, as concerns mining, we take into consideration both the feasibility and exploitation studies, we take the project design for mining into account,” she stated.

Of note, the government formally blocked the investment proposal just over two years ago after the most widespread protests in Serbia since 2000. But Rio Tinto continued with some of its activities and disputed the related decisions at the Administrative Court.

At the same time, top officials led by President Aleksandar Vučić left the door open for the project. Additionally, the government is approving exploration and other permits for an increasing number of potential mining investments. They include lithium, boron and precious metals.

Asked whether green lithium mining is possible, Đedović Handanović expressed the belief that it is. Also, the minister responsible for the sector opined that Serbia can become one of the three biggest producers in the world of the critical material for electric car production. The objective is to cover 20% of demand in the European Union, in her words.

No development without environmental impact

Importantly, Serbia is counting on a strategic partnership under the EU’s upcoming Critical Raw Materials Act (CRMA).

Lithium carbonate remains the predominant raw material for the production of batteries for electric vehicles as well as for storage within the electric power system and for solar power for self-consumption. Still, its market prices have been stagnating for the past few months around the levels held before mid-2021. That’s when they started to surge, reaching a peak after little more than a year later and reversing course.

The main producers are currently hesitating to proceed developing some lithium mines or they are exiting such projects altogether. In the meantime, alternative solutions are slowly emerging. They are based on, for example, sodium or calcium, and even gravitation.

“You can’t develop without affecting the environment. The only question is how you will protect it in an adequate way, so that those impacts are as low as possible,” Đedović Handanović asserted. She underscored that her job is to take into account all the risks that a project carries as well as its good sides. In the minister’s view, that way one needs to “take decisions responsibly and primarily in the interest of the citizens, state and economy.”

Critical raw materials are also required for wind generators and solar panels, she noted.

Legal framework for mining to be improved

This year Serbia will get a strategy on developing mineral raw materials after not having one for 15 years, Đedović Handanović revealed. “We initiated a change in the Law on Mining [and Geological Explorations] to maximize the protection of the interests of, above all, our country, our citizens,” she told RTS.

The minister explained that the new legal solutions would include concession models and that the period of exploitation would be limited. The government will demand a higher, strategic share, Đedović Handanović said.

“To see how the expenses are distributed, how income is distributed. It means, simply, to put the state in a better position. We are already doing that, because everyone must in any case negotiate with the state to even get any kind of a permit,” she stressed.

Rejecting Rio Tinto can cost Serbia

Exploration activities in mining last very long and they are very expensive, including in the domain of oil and gas, Đedović Handanović added.

“If we know that a yes to Rio Tinto costs us some of these environmental standards, do we know that a no to Rio Tinto also implies costs? I was looking over their financial reports. [Serbian subsidiary] Rio Sava has been here since way back in 2001, even if some often say it was from 2004. Their accumulated losses amount to EUR 300 million. Which company can count on losses of that size? And, is it only the one that expects great earnings here or it expects to charge the state dearly for it if the business doesn’t materialize?” she warned.

The minister denied again the speculation that Serbia intends to privatize power utility Elektroprivreda Srbije (EPS). Asked who would want to buy a company without a single kilowatt from solar or wind, she pointed to two such projects in the Kostolac coal hub. Moreover, hydropower plants had a 36% share last year, she said. “It is our capacity, jewel, which EPS is running adequately,” Đedović Handanović added.

Following years of poor management and a series of outages and fires that culminated with a nearly total collapse in the electric power system in December 2022, the government vowed to reform EPS.