Raw data

The Serbian authorities granted the Spanish company Rio Tinto the concession to exploit a lithium mine in 2017. In the summer of 2022, large protests were organized, and the exploitation permit was revoked. During the protests, the 24,000 demonstrators shouted “We won’t give up Serbia” and “Rio Tinto, out of Serbia.” In July 2024, a court ruled that the revocation was unconstitutional, and the license was restored.

If the $2.55 billion investment in the Jadar Valley is realized, the European demand for lithium will be met by 90%. The Serbian government estimates that this investment will be the largest in the country and will contribute 4% to the GDP. The project could create over 2,000 jobs in construction and 1,000 jobs in mining.

Context
The World Bank has estimated that global production of cobalt, graphite, and lithium will increase sixfold by 2050.

In March 2024, the Council of the European Union adopted the “European Critical Raw Materials Act,” which highlights the economic importance of 34 critical raw materials, of which 17 have been declared strategic. Lithium is classified as strategic.

This document aims at “increasing and diversifying the supply of raw materials, strengthening circularity and recycling, and supporting research and innovation regarding resource efficiency and the development of substitutes.” As a result, the exploitation of Serbian lithium will play a significant role in the European Union’s green transition projects.

Global Lithium Market
The most important metal in battery production is lithium. The world’s largest producer is Australia, but China processes more than 50% of it.

Fig. 1 – Global Lithium Production (source: ourworldindata.org)

Fig. 2 – Chinese Monopoly on the Processing of Several Critical Minerals (source: statista.com)

Lithium and its compounds have many industrial applications: in the glass and ceramics industry, lubricants, steel and aluminum production, battery manufacturing, and components in the nuclear and military industries.

New Sino-Serbian Relations
The strengthening of economic relations began in 2014 when the then Chinese Premier attended the inauguration ceremony of the Pupin Bridge in Serbia. In 2016, Serbia and China signed a strategic partnership agreement. In 2019, Serbia purchased military drones, surface-to-air missiles, and air defense missile systems from China. In 2023, the Serbian president visited Beijing, where 18 economic agreements were signed, including a free trade agreement that came into effect on July 1, 2024.

In January 2024, China and Serbia signed a memorandum of understanding in which China invested 2 billion euros in a wind farm, a photovoltaic park, and a hydrogen production facility.

The most important event occurred in May 2024, when President Xi Jinping embarked on a European tour visiting Belgrade, Budapest, and Paris. This tour is part of Xi’s approach to provide an alternative to the influence of the United States, the European Union and the Russian Federation in the area.

How is Serbia “Playing”?
Serbia refused to sanction the Russian Federation after the war in Ukraine began. The Serbian Prime Minister’s Progressive Party has been in power for 12 years and has drawn criticism from the West for “sitting on two chairs” in its foreign policy. Belgrade’s strategy is essentially a balancing act between the United States and the European Union on one side, and Russia and China on the other, keeping “trade and diplomatic options open.”

When we look at Serbia’s trade partners, we see that exports are dominated by European countries: Germany 13%, Bosnia and Herzegovina 7%, Italy 7%, Hungary 6%, Romania 4% (2022 – source: The World Factbook). In terms of imports, European partners are also dominant: Germany 11%, China 8%, Hungary 8%, Russia 7%, Italy 6% (2022). We observe that Russia and China are minor partners.
The situation is similar regarding foreign direct investments, with EU countries dominating at over 70%.

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