BELGRADE — German Chancellor Olaf Scholz and European Commission Vice President Maroš Šefčovič locked down a series of deals on Friday granting the EU and European carmakers exclusive access to Serbian lithium and paving the way for the construction of one of the largest lithium mines on the Continent.

“This is an important European project and contributes to Europe remaining sovereign and independent in the supply of raw materials in a changing world,” Scholz told journalists in the Serbian capital.

Šefčovič and Dubravka Đedović Handanović, Serbia’s mining and energy minister, signed a deal to formalize the EU supply chain and value-added processing for lithium mined by Rio Tinto, a British-Australian mining consortium.

Lithium, sometimes dubbed “white gold” due to its high demand in the green energy transition for use in the batteries that power electric vehicles and its distinctive white color, is plentiful — and so far untapped — in Serbia’s western Jadar region.

Letters of intent were also signed with representatives of leading European automobile producers such as Germany’s Mercedes-Benz and French-Italian automaker Stellantis.

Yet despite the potential it holds for the EU, the project is unpopular in Serbia.

Plans to extract Serbia’s exceptionally pure “Jadarite” lithium, which could involve clearing lush fields and forests in the Jadar region and contaminating water supplies, are highly controversial and sparked extensive protests from 2021 to 2022, uniting political factions in an otherwise divided ideological landscape.

Who benefits?

The project is particularly unwelcome due to the perception that electric cars produced with its lithium would solely benefit EU citizens, leaving Serbia, a candidate country with uncertain prospects of full membership and severe pollution problems, without the benefits yet bearing the brunt of the environmental consequences.

Viktor Berishaj, a senior policy officer at the German EuroNatur foundation, said that, despite EU regulation mandating that mining activities in third countries undergo thorough inspections to minimize their environmental impacts, “Serbia currently lacks the necessary legislative and regulatory framework to meet these stringent requirements.”

“The Draft Law on Environmental Impact Assessment, though submitted to the Serbian parliament in October 2023, remains unadopted and contains critical gaps, such as not preventing the issuance of construction permits before the completion of the EIA,” Berishaj explained.

Opposition to the project, including roadblocks across the country and thousands of protesters, was so strong that despite signing a deal with Rio Tinto in 2020, the government ultimately decided to cancel plans for the mine's construction in January 2022.

But after securing another mandate in December's national elections, the Serbian government decided to revive the project and legitimize it by passing the baton to the Constitutional Court. On July 11, the court declared the government's decision to ban the project unconstitutional and reinstated its progress.

Stand with me

During the opening session of the Critical Raw Minerals Summit on Friday, Serbian President Aleksandar Vučić acknowledged the lack of support for the project in the country, but stressed that he believes “people will increasingly stand with their country and their government once they see the level of commitment and diligence with which we have approached this project.”

Scholz emphasized the importance of the environmental concerns, assuring that Germany would monitor the development of the unconstructed mine closely and pledged to “provide ecologically acceptable solutions and the knowledge of our [German] mining engineers every step of the way.”

He also stressed that the project, expected to bring €6 billion in new investments, would play a key role in integrating Serbia in European and global markets.

“Countries that are lucky enough to have natural resources that the entire world needs should be given the chance to profit from those resources within the EU, the G20, the G7, the World Trade Organization,” said Scholz.

Civil society actors are also concerned that the project, as outlined in the documents signed on Friday, will be personally overseen by Vučić.

Leading opposition figures, including Marinika Tepić from the Party of Freedom and Justice, criticized the signing of the deals, alleging that the president and the ruling party deceived voters by failing to make any mention of the lithium deal during campaigning for the general election last December.

“The [ruling] Serbian Progressive Party has no legitimacy for such a decision and policy. Extraordinary parliamentary elections need to be held where the citizens would declare whether they are in favor of such a policy,” said Tepić.

According to the details of agreements signed with the EU, the president would personally oversee the development of the project and “meet on a regular basis [with European Commission Vice President Šefčovič] to monitor progress and decide on next steps.” This has raised fears among activists that the EU may overlook what they view as Serbia’s growing slide into autocracy under Vučić and his Serbian Progressive Party in return for his ability to quash opposition to the mine at home.