Tag: Rio Tinto

  • Rio Tinto Faces Pressure From Investors Over Water Contamination Claims in Mongolia and Madagascar

    Rio Tinto Faces Pressure From Investors Over Water Contamination Claims in Mongolia and Madagascar

    Rio Tinto (RIO.AX) is facing scrutiny from investors over its water management practices at its mines around the world. The primary concerns stem from the water quality at two of its mines: the Oyu Tolgoi mine in Mongolia and the QMM ilmenite mine in Madagascar. These concerns have been raised by LAPFF, an organization representing UK pension funds, which is urging Rio Tinto to conduct independent audits of its water practices.

    The Oyu Tolgoi mine, located in the South Gobi Desert, is one of the world’s largest copper and gold mines. However, it has been dogged by accusations of water contamination since it began operations in 2013. Local communities have reported that their livestock have fallen ill or died after drinking water from rivers and streams that have been polluted by the mine’s operations. Rio Tinto has denied these allegations, but they have agreed to invest in a new water treatment plant to address the concerns.

    The QMM ilmenite mine, situated in southeastern Madagascar, is another major source of contention. This mine produces ilmenite, a mineral used in the production of titanium dioxide, which is a white pigment used in paints, plastics, and other products. However, the mining process generates wastewater that contains high levels of sulfates and other pollutants. These pollutants can harm aquatic life and contaminate drinking water supplies. Rio Tinto has been accused of not doing enough to mitigate the environmental impact of the QMM mine, and there have been reports of local communities suffering from skin and respiratory problems due to water contamination.

    In response to these concerns, LAPFF has called on Rio Tinto to conduct independent audits of its water practices at all of its mines. The group is also urging the company to adopt stricter water quality standards and to invest in more sustainable water management practices. Rio Tinto has stated that it is committed to water stewardship and transparency and that it is already taking steps to improve its water management practices. However, the company has not yet agreed to conduct the independent audits that LAPFF has requested.

    The issue of water contamination at Rio Tinto’s mines is a complex one, with no easy solutions. The company has a responsibility to ensure that its mining operations do not harm the environment or the health of local communities. However, it must also balance this responsibility with the need to remain profitable. Finding a way to achieve both of these goals will be a challenge for Rio Tinto in the years to come.

  • Jadar and Rađevina Appraisal: Revealing the Valuation of Strategic Resources and Future Outlook

    Jadar and Rađevina Appraisal: Revealing the Valuation of Strategic Resources and Future Outlook

    The answer to the question of how much Jadar and Rađevina cost has not been provided, nor will it be given as long as the destruction of the landscape and the relocation of the population are considered inevitable damage that has not been assessed, and lithium, known as “white gold,” is considered more valuable than anything else. When something is not assessed, it is considered trivial, or until it is assessed, it has no value (price). This question was raised at a meeting at the Serbian Academy of Sciences and Arts (SANU) titled “Jadar Project – What is known?” Even then, no answer was given, or it was avoided as if Jadar were located on another lifeless planet.

    What was known then, and still remains unclear today, is the approximate technology for obtaining lithium carbonate and borates from the Jadarite ore through leaching with concentrated sulfuric acid. The assessment includes the cost of production, the planned duration of exploitation, and likely the company’s profits from the exploitation. Additionally, it is probable to consider the mining royalty that the state will collect according to existing regulations, which is approximately five percent of the foreign company’s realized profit.

    If we were to elaborate on the initial question, it would be about the value of natural and human-made biological resources on the surface of the mineral deposit, as well as surface and even more so underground water resources that would be extensively used in the lithium extraction process. This value is in comparison to the “white gold” that will primarily benefit the profit of the foreign mining company. The fact that water, as a natural resource, is vital for the future of any society is neglected. Finally, not least, the population that lives and earns a livelihood from these resources is also overlooked.

    Indeed, the complete disregard for the value of biodiversity, ecosystem services provided by natural vegetation, especially forest ecosystems, and agricultural land is concerning, especially at a time when climate disruptions (climate change) are evident as a global problem with increasing challenges for any human community.

    Paradoxically, by ignoring the significance of nature in mitigating the effects of climate disruptions, mega-projects that lead to increasingly visible negative consequences are favored. The problem of accumulating carbon dioxide in the atmosphere, which enhances the greenhouse effect and global warming, cannot be effectively addressed by technologies like carbon dioxide vacuum cleaners or by depositing waste biomass in anoxic parts of the sea (e.g., the Black Sea), which are offered as salvation. Meanwhile, the assimilation potential, which is the only means capable of binding and/or depositing excess carbon dioxide in biomass and soil, continues to be ruthlessly destroyed.

    Not to mention the oceans, which perform this function more efficiently than terrestrial ecosystems, thanks to the enormous surface they occupy. It is now time to recognize that forests, as the most productive part of terrestrial ecosystems, cannot be valued solely based on the quantity of wood mass, but also through functionality. Even from an anthropocentric perspective, considering ecosystem services crucial for every human community whose survival ultimately depends on these services. It is imperative that in the future, they must be comprehensively evaluated, taking into account multiple benefits, and that the practice of belittling, neglecting, and trivializing them must cease.

    Whether we like it or not, human communities at any spatial scale depend on nature, whether it be original or modified over thousands of years of human civilization, primarily through artificial selection of wild plant and animal species for various human needs, especially for sustenance. Not to mention the enormous potential that biological diversity holds. American ecologist Leopold compared biodiversity to a vast library that remains unread, and every day, books are deteriorating and disappearing from its unique collection. Whether the idea of preserving biodiversity and valuing it will become an obligation and prove effective is a big question mark.

    The care for the preservation of nature and biodiversity as its foundation cannot be solely the concern of biologists, ecologists, and nature enthusiasts.

    Past experiences indicate that the idea of sustainability and sustainable development, which is prevalent in various international and domestically adopted documents, is often just a dead letter on paper. The preservation of biodiversity is fundamentally part of the sustainability agenda. In practice, everything goes against this idea – from the exploitation of natural resources as quickly and extensively as possible, with a lack of restraint when it comes to the profit of those who use resources in an uncontrolled manner.

    In that context, the idea of building mines in the Jadar region, as well as all projects that envision and prepare the territory of Serbia as a state for mining and dirty technologies, should be considered. It is not surprising that foreign companies are rushing to Serbia when they see how the state and a significant part of the population treat their own environment. The excuse that this is necessary and that all countries have gone through this Machiavellian phase of natural resource destruction, and that they will only realize later, as society becomes wealthy, that the “devil has taken the joke,” simply does not hold water.

    Advocates for building mines in the Jadar region attempt to minimize environmental damage by pledging adherence to the highest ecological standards in mining, often using the catchphrase “green mining.” Systematically labelling something as “green” when, figuratively speaking, only chlorophyll in plants is green, creates the illusion that the problem either is or will be solved, and this is far from making sense. A more accurate term would be “environmentally responsible mining.” Such practices are rarely implemented globally, and they involve minimizing all damages to the greatest extent possible. For instance, in environmentally responsible mining, the waste material (tailings) generated from processing ore is returned to the exploited part of the mine after treatment. It is clear that such practices significantly increase the costs of exploitation, making it less and less profitable.

    The issues surrounding the construction of mines in the Jadar region cannot be isolated from the behavior of foreign mining companies towards natural resources in other countries, typically former colonies or developing nations. What is happening in Serbia in this regard closely resembles the conduct of foreign mining companies, aided by the stance of the state that everything is up for sale. One only needs to look at the environmental conditions in Bor and Majdanpek and the projected future for the Žagubica area to clearly see the approach of foreign mining companies, especially Chinese ones, regarding environmental protection in Serbia.

    Indeed, such companies often behave as if they are a state within a state. It is worth mentioning that Chinese companies hold around 14% of shares in Rio Tinto. These are all examples of environmentally irresponsible but highly profitable mining practices, the consequences of which will be evident for hundreds of years after exploitation. The remediation or masking of these consequences is not easy, quick, or inexpensive.

    Can someone imagine the environment of Bor and Majdanpek after the completion of exploitation, and the first association not be, looking at the abandoned surface mines, that everything resembles the landscape of a lifeless planet? Or, let’s not consider such massive devastations, but the quarries that sprout in Serbia like mushrooms after rain, and after exploitation, nature is left to revitalize them on its own, which will be a very long and slow process. Behind all these mentioned mining endeavours stands the Big Brother called profit, where what is being destroyed has a price only in the raw material being exploited with the prior consent of the guardian or host, which is the state.

    What’s the reason for such a rush towards Serbia’s mineral wealth?

    The fundamental question naturally arises: why such a rush for Serbia’s mineral wealth? For what reasons do foreign mining companies come to Serbia, and what is it that attracts them so much? I believe the answer is quite simple and boils down to the fact that the state’s attitude toward environmental preservation is the last “missing piece” and is evident at nearly every turn, from air pollution and wastewater, which serves as waste collectors, to garbage dumps and waste scattered in various locations, destruction of nature, lack of law enforcement, poorly conducted environmental impact studies, various projects that exist only on paper, the population’s attitude towards the environment in which they live, and the list goes on, as it would indeed be quite extensive.

    On the other hand, the noticeable dysfunctionality and incompetence of institutions, the lack of transparency in decisions and finances, and the corruption that plagues this society make Serbia a severely ill patient.

    In a nutshell, Serbia is a country where non-transparent agreements often lead to hasty and ill-considered projects. Speaking about the Jadar project with the residents of Gornje Nedeljice, the President of Serbia stated that “we do not have the right to ruin the lives of a greater number of people than originally planned,” directly highlighting how uncritically and thoughtlessly the Jadar project was approved and handed over to Rio Tinto to begin resettlement and persuade the population with neatly packaged propaganda and irresistible offers.

    On the other hand, it is clearly demonstrated what a neglectful attitude the state has towards the environment and natural resources, including the population that lives and earns a living there. In short, everything started haphazardly, as is often the case when there is no clear insight into the technological process and its consequences, except for the declaration that everything will be according to the latest standards, which is a commonplace in Rio Tinto’s propaganda portfolio. The meeting at the Serbian Academy of Sciences and Arts (SANU) highlighted all the deficiencies and ambiguities of this project, especially those involving the actors engaged by Rio Tinto in the preparation of the study, related to the projection of the industrial-mining process and facilities, the disposal of mining waste left after the production of lithium carbonate, as well as the infrastructure of the complex, water borrowing for the process, and so on.

    The experts from the Mining and Geological Faculty and the “Jaroslav Černi” Institute, as expected, unequivocally gave the green light for the mining project, while those from the Biological and Forestry Faculty, who assessed the biodiversity and natural and human-made values on the surface of the mining deposit, gave a negative assessment of this project.

    Serbia must put an end to such thoughtless and superficially assessed projects and consider how it will progress further. In any case, the practice of selling off resources and planning excessive and oversized projects, as is currently happening, should cease. Serbia’s developmental opportunity lies in organizing and improving many aspects of society. To begin with, one of the secure developmental opportunities could be the restoration of the neglected environment, as there is a significant and long-term task ahead in that regard, given the prolonged negligence. At least, let our air and waterways become cleaner, and let’s stop the reckless conversion of agricultural and forest land into construction and industrial areas.

    The case of the planned mine in Jadar is a paradigm of environmentally and socially irresponsible behaviour, which, if realized, would be evidence that the old practice of selling off and managing natural resources continues to the detriment of the harmonious and balanced life of the population that has inhabited and endured in that part of Serbia for centuries, in a beautiful, gentle, and fertile region. Therefore, the value of the Jadar region far exceeds the money from lithium carbonate that Rio Tinto will reap, and which, as is often the case, will leave devastation in its wake after exploitation.

  • Serbia wants talks with Rio Tinto over Jadar lithium project

    Serbia wants talks with Rio Tinto over Jadar lithium project

    Serbia wants to hold further talks with Anglo-Australian miner Rio Tinto about its lithium project in the country, President Aleksandar Vucic said on Wednesday, adding that there should also be more public discussion over whether it should go ahead.

    Belgrade revoked licences for Rio’s $2.4 billion Jadar lithium project in Western Serbia in January 2022 after massive environmental protests. If completed, the project could supply 90% of Europe’s current lithium needs and help to make the company a leading lithium producer.

    Regarded as a critical material by the European Union and the United States, lithium is largely used in batteries for electric vehicles (EV) and mobile devices.

    Speaking on the sidelines of the World Economic Forum in Davos, Vucic said he had “a difficult conversation” with representatives of Rio Tinto earlier on Wednesday.

    “We are facing the question of whether the company will file a lawsuit against us or not,” Vucic told Serbian reporters. “I asked them not to take measures to protect their interests.”

    In 2021 and 2022 Serbian environmentalists collected 30,000 signatures in a petition demanding that parliament enact legislation to halt lithium exploration in the country.

    Green activists have repeatedly warned that the mining projects will cause more pollution in Serbia, already one of Europe’s most polluted countries.

    Vucic said he had sought Rio’s assurances about environmental standards and said that the next government – expected to be formed by May following December elections – should address the issue.

    “(Rio) must offer the cleanest solutions, which could be satisfactory to our people, the highest standards in the world for the nature and the people who will work there,” he said.

    In an emailed response, a Rio Tinto spokesman said: “We continue to believe the Jadar project … could act as a catalyst for the development of other industries and tens of thousands of jobs for current and future generations in Serbia.”

    The company is focused on consultation with all stakeholders to explore options related to the project’s future, the email added.

    To bolster economic growth and revenue, the Serbian government has offered mineral resources to foreign investors including China’s Zijin copper miner and Rio Tinto.

  • Rio Tinto filed nine lawsuits against Serbia

    Rio Tinto filed nine lawsuits against Serbia

    Rio Tinto’s Serbian subsidiary Rio Sava has filed nine lawsuits against the country’s government in connection with the abolishment of its Jadar project.

    News of a legal dispute between Rio Tinto and the state of Serbia is a new twist regarding the company’s lithium mining and processing project. Serbia halted it in January 2022, but environmental activists and residents of the Jadar area believe that both Rio Tinto and Serbia’s authorities have not given up on the investment.

    Information about the lawsuits emerged two weeks after a media report that Serbia and the European Commission signed a letter of intent in September to initiate a strategic partnership for batteries and critical raw materials including lithium.

    The Nova news outlet learned that under the jurisdiction of the Administrative Court, there are four cases against the decision of the Government of Serbia to abolish the project, two suits against the Ministry of Agriculture, Forestry and Water Management, and three against the Ministry of Finance.

    Of note, Rio Tinto said on several occasions that it plans to sue Serbia.

    With two lawsuits, Rio Tinto is disputing the government’s decision to annul the approval of environmental impact assessments, issued by the Ministry of Environmental Protection, the court revealed.

    The state Administrative Commission has rejected Rio Sava’s appeals, which resulted in the two remaining cases, the report reads.

    Since the beginning of October, Rio Sava fired about 80% of its employees

    Two lawsuits concern the Ministry of Agriculture’s inspection measures, according to the article. The cases that the Anglo-Australian mining giant launched against the Ministry of Finance are related to tax issues, it adds.

    In addition, Nova.rs reported, without identifying its source, that Rio Sava fired 80% of its workers since the beginning of October.

    The plan is to keep twenty employees only until the administrative procedure for the layoffs is completed and then to close the firm, which means Jadar project is finished, the website wrote.

  • Rio Tinto–backed firm InoBat selects location for battery gigafactory in Serbia

    Rio Tinto–backed firm InoBat selects location for battery gigafactory in Serbia

    A Slovakian startup has made the decisive choice of a suitable location for its gigafactory, which will be dedicated to the manufacturing and recycling of batteries. This strategic move follows earlier preliminary agreements that were signed with the Government of Serbia.

    InoBat, the esteemed startup, has recently entered into a memorandum of understanding with Serbia’s Ministry of Finance and the Municipality of Ćuprija, a town situated in the central part of the country. This memorandum solidifies their commitment to construct their second gigafactory in this region.

    The startup proudly announced, “We are delighted to reveal Ćuprija as the chosen location for our Serbia Giga Factory and recycling project, codenamed Lion. This project has been in development for the past two years in collaboration with the International Financing Corporation (IFC).”

    InoBat further elaborated that Lion will mark their second gigafactory in the region of Central and Eastern Europe. The company is already in the process of developing the Voderady research and development pilot line, as well as a mini-giga factory in Slovakia.

    It is worth noting that one of the esteemed shareholders of InoBat is Rio Tinto, a prominent entity in the industry. Furthermore, the Government of Serbia has expressed its readiness to offer an enticing incentives package totaling EUR 419 million for the Lion project. This state-of-the-art facility will focus on assembling energy storage solutions, electric vehicle batteries, and recycling batteries. InoBat has committed to aligning its activities with the comC2C circular value chain development platform.

    Back in November 2022, InoBat had already entered into preliminary agreements with the Government of Serbia regarding the construction of a gigafactory. Notably, one of the investors in InoBat, Rio Tinto, has been actively involved in the development of a lithium mining and processing project in Serbia. Although the project faced significant public opposition and protests, there are hints that it might be revived, making the collaboration with InoBat even more likely.

    InoBat has also forged a partnership with China-based Minth Group in Serbia. The CEO of InoBat, Marian Bocek, expressed the reason behind selecting Ćuprija as the location, highlighting the welcoming and enthusiastic local community, as well as a proactive municipal government. He added that the potential for co-developing a distributed power smart grid and utilizing renewable sources of electricity for their own consumption was an additional advantage.

    Tara Lindstedt, a board member and Chief Development Officer (CDO) of InoBat, commended the progress of the Lion project. She mentioned that earlier this year, InoBat had signed a memorandum of understanding with Minth Group, a collaboration that spans the battery value chain in Europe, starting with Serbia.

    Jimmy Wong, the Managing Director for Europe at Minth Group, proudly asserted that his company, based in China, has eight sites in the Balkan country. This strong presence further influenced InoBat’s decision to establish their second facility in Serbia.

    The Prime Minister of Serbia, Ana Brnabić, expressed her satisfaction with InoBat’s investment in Serbia, as it will contribute to job creation in the new decarbonized circular economy. Maria Paulina Mogollon, the InoBat Manager of Upstream and Advisory for Manufacturing, Agribusiness, and Services (MAS) in Europe and Latin America, expressed her belief that the Lion project will firmly establish Serbia as a prominent player in European low-carbon and circular renewable energy storage solutions, as well as electric vehicle battery value chains.

  • The distinguished head of state of Kazakhstan had the honor of receiving Jacob Stausholm, the Chief Executive Officer of Rio Tinto

    The distinguished head of state of Kazakhstan had the honor of receiving Jacob Stausholm, the Chief Executive Officer of Rio Tinto

    The meeting provided an opportunity to discuss the implementation of joint investment projects within the realms of geological exploration, mining, and metallurgical industries.

    During the fruitful exchange, Kassym-Jomart Tokayev was apprised of Rio Tinto’s plans to expand its operations in Kazakhstan. Jacob Stausholm also provided an update on the progress of projects related to the exploration of copper deposits in the Kostanay and Karaganda regions.

    The President acknowledged Kazakhstan’s substantial reserves of vital minerals and raw materials that are currently in high demand for the advancement of cutting-edge technologies. Kazakhstan is actively undertaking measures to expand the scope of geological exploration work while embracing globally recognized best practices that contribute to significant geological discoveries.

    Rio Tinto, with a market capitalization of $99 billion USD, stands as the largest Anglo-Australian mining and metallurgical company. Its diverse portfolio encompasses assets primarily located in Australia (35%), Canada (34%), Europe (13%), and the United States (11%). The company’s business segments encompass various commodities, including iron ore, aluminum, copper, bauxite, diamonds, uranium, and industrial minerals.

    This meeting between the head of state of Kazakhstan and the Chief Executive Officer of Rio Tinto underscores the mutual interest in fostering fruitful partnerships and capitalizing on the vast potential of Kazakhstan’s mineral resources. It sets the stage for further collaboration and the realization of shared objectives in the realm of sustainable economic development.

  • European battery companies call on EU for more support

    European battery companies call on EU for more support

    The companies said the European Union’s current plans and funds were not enough for the necessary investments in the bloc’s battery industry for electric vehicles and renewable power storage – a pillar of the shift to green technologies.

    “Today China controls not only large shares of cleantech manufacturing but also 50-90% of the critical minerals processing capacity needed for those, as well as many global resources,” said the letter to Commission President Ursula von der Leyen, signed by 16 companies and organisations.

    They included miner Rio Tinto, chemicals group Solvay and battery materials makers Umicore and Northvolt.

    “The U.S. is fast catching up with its mammoth investment package under the Inflation Reduction Act, while Europe’s investment climate has been further worsened from the ongoing Ukraine conflict,” the letter added.

    The companies called for a European Critical Minerals Fund, which would operate on an EU level and which could directly finance companies.

    They also urged the commission to expand its innovation fund with targeted support for the critical minerals sector.

    Existing EU funding streams are “a patchwork of insufficient, uncoordinated and complex schemes” which focus mostly on research and development, they said.

  • The geopolitical dimension of the Jadar Lithium project in Serbia

    The geopolitical dimension of the Jadar Lithium project in Serbia

    On March 16, the European Commission published a proposal for a new Law on Critical Raw Materials. EU wants to compete with China and the USA in the production of green technologies, as well as to reduce the emission of harmful gases by 2050. Critical raw materials are primarily rare metals necessary for modern green technologies, and lithium is among them. EU members are obliged to carry out geological research and mapping of new deposits in order to reduce import dependence on China through the exploitation of critical raw materials. It is also planned to form a Committee for Critical Raw Materials, which will have the right to declare certain exploitation projects as strategic and reduce the maximum period for issuing permits for the operation of such mines to 24 months. Serbia is not mentioned in the new law, but cooperation with exporters such as Namibia, Chile and Canada is announced. As Serbia is home to one of the largest lithium deposits in Europe, it is not excluded that the Jadar project will also have a geopolitical dimension. Especially since Serbia opened negotiation chapter 15 on energy on December 14, 2021, in the midst of protests against amendments to the Law on Referendum and the Law on Expropriation, which, it was believed, served to speed up the implementation of the Jadar project. Meanwhile, BIRN obtained a report from the meeting between the representatives of the Rio Tinto company and the head of the EU Delegation in Serbia, Emanuel Gioffre, held on March 25, 2022, two months after the end of the project was allegedly put on hold. The company’s representatives then said that they support the local one, but that they are afraid of the results of the national referendum.

    A fairy tale of accelerated growth

    With its GDP per capita of 7,803 euros, Serbia is 2.6 times behind a medium-developed country such as Slovakia, and even 4.7 times behind the EU average. In other words, the GDP per inhabitant of Serbia would have to grow by 10 percent per year on average over the entire decade just for Serbia to reach today’s Slovakia. Or 13 percent per year to be similar to what it was then (or only slightly less if we take into account the Balasa-Samuelson effect that would act on the appreciation of the dinar and which would eventually help to equalize the GDP per capita faster), assuming that Slovakia in that period grows a modest 2.5 percent. It is immediately clear that this kind of growth is simply not possible – neither without the Jadar project, nor with ten such projects in the next ten years. The President of Serbia has repeatedly said that the exploitation of lithium would contribute to GDP growth of 3.5 to 4 percent. “We would have 3.5-4 percent higher growth on an annual basis,” he literally said. Growth higher by 3.5-4 percentage points per year means that, say in 2022, growth would be around 6.05 percent (actual growth of 2.3 percent plus 3.75 percentage points), and growth higher by 3.5-4 percent would mean that it would be 2.39 percent (2.3 percent times 1.0375). I reasonably assume that the president meant percentage points, not percentages, as he said, for two reasons. First, the difference in economic growth between 2.3 and 2.39 percent, although welcome and many times closer to the real effects, is far from the economic miracle needed for Serbia to catch up with the middle developed European countries. Second, politicians – even when they know the difference between a percentage and a percentage point – almost always use a percentage in both cases to be more “understandable”. And now let’s demystify the claim that the opening of one company, no matter how big it is, could accelerate economic growth by 3.5-4 percentage points and thus enable Serbia to catch up with the mentioned countries. Admittedly, not to catch up with them, because Serbia needs growth of 10 or more percent for 10 years in a row. And Serbia has never achieved such a growth rate. Not during one year, let alone continuously. In fact, such rates can only be achieved by extremely underdeveloped countries with a growing and young population, such as China (two decades ago) or African countries. In addition, history is dominated by examples that show that through the direct exploitation of mineral raw materials, few countries, and even fewer populations, developed (became happy), and that instead of economy, corruption mostly develops. This is also shown by the countries of South America, which are incomparably richer in ores.

    Having shown that even an increase in growth by 3.5-4 percentage points alone is insufficient to fulfill the fairy tale, we will now show to what extent it is impossible and improbable to achieve it through the Jadar project. First, the information that this project would increase growth by so much is not even in the study on economic effects, prepared by Rio Tinto. The study evaluates the economic effects significantly more modestly – the project would increase the GDP by 2.8 percent in the phase of full realization – that is how much it would participate in the formation of the GDP. Therefore, if the Jadar project were to be realized, and everything else in Serbia remained unchanged, the GDP per inhabitant would increase from 7,800 to 8,029 euros. The opening of the mine would help, therefore, to cross only one-eightieth of the way to the “then Slovakia”! At the same time, all these assumptions in the Rio Tinto study refer not only to direct, but also to indirect (development of domestic suppliers and subcontractors) and induced effects of the project (generation of GDP through spending of income generated in the company). Assumed indirect effects (not directly dependent on the project) actually make up most of the assumed effects – out of 5,120 new jobs, only 1,170 are predicted to be created in the mine, and the remaining almost 4,000 are related to indirect and induced effects. This is not necessarily too optimistic, but, nevertheless, a project of this size must require serious planning – which new investments would it attract, which domestic suppliers could it hire, do they need support to increase capacity, acquire new equipment, and the like – otherwise these effects would be completely absent.

    Let’s take a step back, to the claim that the opening of one company can make up for Serbia’s 30-year lag by accelerating growth. The statement that the opening of one company could accelerate growth by 3.5-4 percentage points indicates economic illiteracy or deception. Because it would have to be a company with the economic strength and size of EPS, three Ziđina or six Michelin factories. And every year for the next ten years. At the same time, the business assets of EPS, together with Kolubar, are 4.5 times larger than the planned investments in the Jadar project, while the number of employees in EPS is 30 times larger! Considering the similarity of the industry, a convenient comparison with the Jadar project is China’s Zijin, as it had comparable investments and has six times more direct employees. At the macro level, Ziđin generates about one percent of Serbia’s GDP, and in the past, a record year for them, it participated in exports with 4.5 percent, and very similar effects are expected from the Jadar project. It is indisputable that the revitalization of the Bor mine was of great importance for the local economic activity – 20 percent of the employees and more than half of the wages paid in the Bor area. In the case of the Jadar project, the effects would be similar, but still somewhat smaller, since the surroundings of Loznica have a different economic structure and there would be a shutdown of certain economic, primarily agricultural, activities. By no means should we leave out the effect on the environment either – despite Ziđin’s alleged efforts to reduce pollution, Bor is the “black point of the Balkans”. The problem of growing pollution coincides with the start of work and increased production. Would it be the same in the case of Jadar, is one of the main questions to which there seems to be no credible answer.

    The fiscal moment is also important. As a major investor, Rio Tinto would effectively be exempt from paying corporate tax up to the amount it invested in the project – paradoxical but true, just like Ziđin. To conclude, the effects of those two investments would be comparable, they have positive sides – although not close to hyperbolic claims, for the fulfillment of which a clear strategy and a more meaningful fiscal policy are needed. Both investments, unfortunately, have negative effects, primarily on the environment. This analysis is neither for nor against the Jadar project per se. The situation in which Rio Tinto finances economic and environmental impact studies certainly has a negative effect on the credibility of the facts. Telling fairy tales has an equally negative impact. Maybe it would really have more significant economic effects, but there is no one to plan them and convince us of that. It might not have an irreparably negative impact on the environment, but no one can guarantee that. This is also the key development problem of Serbia. At this moment, I am closer to the point of view that Serbia is not institutionally mature for something like this.

    Economist Nebojša Katic also wrote about the economic effects of the Jadar project more than a year and a half ago. “If Rio Tinto start with exploit and export of ore from Serbia, export revenues will increase Serbian GDP, but these revenues belong to Rio Tinto and, as a rule, do not stay in Serbia.” Serbia will have mineral rent from that, maybe Rio Tinto will pay some taxes, and some will even get a salary working for Rio Tinto. This is where the financial benefits for Serbia will end and they will be incomparably less than the statistical growth of GDP,” Katic wrote in the author’s text, with the remark that “economists really like indirect effects because they can estimate, magnify and manipulate them as much as they want, or as much as they are paid”. The words of Luka Erceg, a native of Canada, originally from Loznica, master of law and economics and director of a company in the USA that manages investments, have even greater specific weight. All the more so since until 2013 he ran a company for the production of lithium in the USA, about which he also spoke to the leading world media, the New York Times, Bloomberg and CNN, and in 2012 he spoke about strategic minerals in the US Congress. “The Jadar project will never be able to compete economically with lithium extraction projects from salt water, which are being developed around the world.” I would recommend that Serbia explores old oil and gas sources, because in many of them, economically profitable amounts of lithium have been found,” Erceg claims for NIN.

    “Extraction from salt water is more economical and can withstand falling prices.” If we insist on the Jadar project, it will be shut down in a few years, because lithium from salt water will lower the price. More and more such will arrive from the “lithium triangle”, which consists of Argentina, Bolivia and Chile. Furthermore, lithium for car batteries is not obtained from rocks, because it has too many impurities,” explains Erceg, noting that everyone forgets that lithium batteries last for ten years, and that they can be recycled afterwards. “That’s why eventually we won’t need to produce as much lithium as we do today, because even after recycling it will be able to be used as if it had just been taken out of the mine.” It would therefore make more sense for Serbia to encourage factories for the production and assembly of lithium batteries, which are large and heavy, so local production has advantages. Such a technologically advanced industry would also be stimulating for students of engineering, electrical engineering, chemistry… and that is why it is better to deal with it than ores. I would praise the government for developing technological industries and in general I would recommend it to focus on “knowledge industries,” because the lithium mine will not create many new jobs,” Erceg points out. “After all, it is not impossible to have a lithium mine like the ones that exist in Australia.” But look at the pictures of the disasters those mines have created. At the same time, what exists in Australia does not exist in Serbia. Australian mines work because ore is sent to China for processing. When the ore is processed there, there are also battery manufacturers nearby. Where will Jadar send his ore or his lithium?” The already fantastic story of Serbian officials about lithium billions could hold water as much as possible while the demand and prices of that metal on the world market were breaking records month after month. Meanwhile, the situation has changed dramatically. On April 28, global media reported that the price of lithium carbonate had fallen to an 18-month low, from a record high of $86,170 to around $52,000 per metric ton. In March of this year, somehow just at the time when Vučić brought back to the public the story of the greatest missed opportunity, the price fell by 64.22 percent compared to March 2022. And at the same time, world agencies do not cite the key reason for such a price drop only a weak demand, but an abundant supply.

    At that time, experts estimated that the drop in lithium prices would be reflected in the drop in prices of electric cars, if their sales would not increase. And then, when the sale of electric cars increases, one could also expect a recovery in lithium prices… But that was obviously a long shot. Meanwhile, the decline continued on the first working day of this week, on September 4, a ton of lithium carbonate cost $27,861 on the world market, and just a month before that it was $37,612 or 35 percent more. The dramatic decline is even better evidenced by the fact that the price of lithium a little less than two years ago was almost three times higher than it is now. This time, lower demand contributed to the decline, not much higher than the lowest at the beginning of the pandemic, in April 2020. Despite this, Serbian officials have not changed their story, as if they are still basing their calculations on record lithium prices. It was as if time and everything else had stopped. Everything except an effort to revive the fairy tale about the economic effects that Serbia would have if the Government decided to change its position and still enable lithium mining. However, Minister Momirović was right when he said that “we will only see how this story unfolds in the coming period, but we cannot ignore the perspectives it opens up.”

  • Mongolia, Rio Tinto have resolved nearly all copper mine tax issues – PM

    Mongolia, Rio Tinto have resolved nearly all copper mine tax issues – PM

    Mongolia has settled almost all of its outstanding tax issues with Rio Tinto over development of the giant Oyu Tolgoi copper mine and is confident that the remaining issues will be resolved, the country’s prime minister told Reuters.

    The partners spent years mired in a tussle over development of the Gobi Desert mine which is the country’s biggest foreign investment and is set to become the world’s fourth largest copper mine by 2030 as demand heats up for the metal key to the energy transition.

    A resolution to the outstanding tax issues would avoid an arbitration process and would signify the restoration of relations with one of Rio’s top partners that were at one stage so poor they threatened to derail the mine’s development.

    “In the past, we had more than 10 issues that we had to address with Rio Tinto on the Oyu Tolgoi project, but we have successfully resolved more than 90% of them,” Mongolian Prime Minister L. Oyun-Erdene said in an interview during a visit to Washington.

    “There are still some remaining issues but we are confident that we can continue our talks and discussions with our investors so that we can resolve them,” he added.

    Rio Tinto last year bought out majority mine owner Turquoise Hill for $3.3 billion in an effort to simplify development of the mine which will produce more than 500,000 metric tonnes per year. It now owns a 66% stake and the Mongolian government the remainder.

    Rio last year agreed to waive $2.4 billion in debt owed to it by the government and commit to a structure that did not require additional loan financing after development costs blew out to $7.06 billion from $5.3 billion slated in 2016.

    Rio Tinto said at its results that discussions with Mongolia’s government were ongoing. Rio started producing copper from underground operations in March and the copper mine is expected to be a pillar of profit in coming years.

    L. Oyun-Erdene credited Rio Tinto’s board for attending the Mongolia Economic Forum in July, which allowed them to “see the real situation and make proper decisions,” praising the leadership of Chairman Dominic Barton in particular.

    “I’m confident that will not have any disputes in the future and we can successfully resolve all those issues,” he said.

    “And this will serve as a clear demonstration that Mongolia is open to business and investment and also it will contribute to investors’ greater knowledge of Mongolia’s investment climate.”

    Rio said last month that it had submitted an offer to resolve the tax dispute, and CEO Jakob Stausholm said that the “transformed relationship with the Mongolian government and the people of Mongolia is creating serious momentum”.

    (By Simon Lewis, David Brunnstrom and Melanie Burton)

  • Rio Tinto commits $150 million to Centre for Future Materials led by Imperial College London

    Rio Tinto commits $150 million to Centre for Future Materials led by Imperial College London

    LONDON, July 31, 2023–(BUSINESS WIRE)–Rio Tinto has committed $150 million to create a Centre for Future Materials led by Imperial College London to find innovative ways to provide the materials the world needs for the energy transition.

    The ‘Rio Tinto Centre for Future Materials’ will fund research programmes to transform the way vital materials are produced, used and recycled, and make them more environmentally, economically and socially sustainable.

    Under the partnership, Rio Tinto and Imperial will together define a set of major global challenges that need to be addressed. These will form the basis of the first research programmes the Centre pursues, in partnership with a selection of international academic institutions.

    The Centre will be established in the second half of 2023, with the first research programmes funded in 2024. Rio Tinto will contribute $150 million over 10 years to fund the Centre.

    Rio Tinto Chief Executive Jakob Stausholm said “For the world to reach net zero, we must find better ways to provide the materials it needs. No single player can do this alone, and research and development plays a vital role. Imperial College London is one of the world’s leading institutions focused on science and engineering – I cannot wait to see the progress we make, as we bring together the best of industry and academia, with shared ambition.”

    Professor Mary Ryan, Vice Provost (Research and Enterprise) at Imperial, said “All aspects of human society rely on materials – from housing to transport, energy, communications and health. We need to create sustainable ways to extract, process, and reuse these resources.

    “Moving to a truly sustainable society requires a holistic approach to these complex industrial processes. This is inherent to Imperial’s approach. We will tackle these challenges and design future innovations that are resource and energy efficient, nature positive, humancentric and just. By working hand-in-hand with other leading international institutions, we will create a truly multidisciplinary, global effort to drive the next industrial revolution in harmony with nature.”

    The $150 million commitment has been made in Rio Tinto’s 150th anniversary year. It will be delivered in 10 annual instalments and will fund research that empowers diverse, inter-disciplinary teams to deliver innovative, and transformative solutions with environment, society, and governance at their core.

    The Centre builds on Rio Tinto’s long-standing support of research and innovation. It will complement an Innovation Advisory Committee of global experts in their fields that Rio Tinto recently established to accelerate its innovation portfolio and provide external insights and guidance on emerging and disruptive technologies.

    The Innovation Advisory Committee includes members with experience in academia, industry and government. More information on the Committee can be found at riotinto.com.