Auction underway: Debating the economic viability of Rio Tinto’s Jadar project

NEWS 13.10.202414:14 0 komentara
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After years of debate over the environmental impact of the Jadar project, questions around the economic viability of Rio Tinto's potential investment have emerged in Serbia. Businessman Zoran Drakulic and several economics professors shared their views, drawing an immediate response from Rio Tinto. A high-ranking U.S. State Department official also unexpectedly joined the discussion, presenting figures that needed verification.

A single digit separates two financial analyses. Drakulic, Mijatovic, Popovic, and Soskic claim that every Serbian citizen would receive €2.6 annually from lithium, totaling €18.2 million. Rio Tinto, however, argues their analysis is incorrect, claiming Serbia would gain ten times that amount.

„The direct benefit will be €180 million per year in taxes,“ said Ched Bluett, Executive Director of the Jadar Project.

Rio Tinto bases its projections on a lithium carbonate price of $15,600 per ton, expected in the coming years. The current price is $10,700 on the Shanghai Metal Exchange.

„Yesterday I saw this U.S. Undersecretary for Ecology, who is now involved in our GDP calculations. He’s dealing with our economy? And he tells us that if this project moves forward, Serbia will flourish,“ said Aleksandar Jovanovic Cuta.

The U.S. Undersecretary for Environment expects Serbia to profit much more, hoping for additional lithium-related projects beyond mining.

„Regarding your question… One to three percent, I need to verify the source. But I’ve seen it could even be higher—four percent. We’ll provide that information,“ said Jose Fernandez.

Mr. Fernandez couldn’t recall the exact source, but it was found that his optimistic GDP growth estimate came from Serbian President Aleksandar Vucic.

„Mining and processing lithium could raise GDP by €0.7 billion or one percent. Lithium cathode production could account for 2.06% of GDP. Mining, processing, and battery production altogether could raise GDP by four percent,“ Vucic stated in July.

The Serbian government has not disclosed the study from which Vucic read or which institution provided these projections. Currently, there is an independent study by Drakulic and professors, Rio Tinto’s interested-party study, and the U.S. Undersecretary’s forecast, whose source is the Serbian President.

„I’m curious why Mr. Fernandez is speaking about Rio Tinto’s project. First of all, Rio Tinto is not an American company. So, I don’t know why they are so concerned about us. Perhaps it would be better for us to worry about ourselves, and for them to worry less about us,“ said columnist Bogdan Petrovic.

Petrovic, a columnist for Nova Ekonomija, does not deny that Fernandez’s assessment may be realistic, but says that achieving it would require significant progress beyond mining.

„There’s talk of producing a million cars from Jadar’s lithium… If Serbia were to get two or three car factories and a battery factory, then it’s possible that GDP growth could reach four percent. However, we have no guarantees for that,“ Petrovic said.

Hungary has guarantees, having bet on China and already securing contracts for two electric car factories and a lithium battery plant, despite not having a lithium mine.

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