Serbia and the European Union have reached a tentative deal that has the potential to significantly reduce Europe’s reliance on China for lithium, a crucial resource in the production of electric vehicle (EV) batteries. Although the deal has faced opposition from environmentalists and opposition groups, German Chancellor Olaf Scholz commended the agreement, emphasizing the importance of Europe’s sovereignty and the need to discover new sources of raw materials.
As the largest carmaker in Europe, Germany aims to secure a stable supply of lithium for its EV manufacturers. Presently, China dominates the lithium-ion battery supply chain. The agreement between Serbia and the EU marks a significant step toward diversifying this supply chain and reducing dependence on imports from China. Chancellor Scholz highlights that this project is not only environmentally friendly but also stimulates economic activity and prosperity by extracting buried raw materials.
Serbia’s constitutional court recently overturned a previous ruling that had canceled a $2.4 billion mining project initiated by Rio Tinto, a British-Australian mining giant. This project is located in the Jadar valley, which is believed to be Europe’s largest lithium deposit. The Serbian government’s decision to revive the excavation plans came after widespread protests in 2021, where citizens expressed concerns about potential environmental hazards. These protests constituted a significant challenge to President Aleksandar Vucic’s increasingly autocratic rule.
During the signing ceremony in Belgrade, heavy police presence prevented protesters from approaching the government building. President Vucic, however, expressed optimism about the lithium excavation project, stating that it would only proceed if automakers and battery producers in Germany and other EU countries establish factories in Serbia rather than solely exporting raw materials. Vucic believes that this development will bring significant positive change and propel Serbia into the future.
Although Serbia is formally seeking EU membership, it has maintained strong ties with China and Russia. Despite Russia’s aggression in Ukraine, Serbia’s alignment with China and Russia has raised concerns among some observers. Nevertheless, the memorandum of understanding signed between Serbia and the EU is seen as a major victory for President Vucic and his hard-line policies.
The European Commission vice president, Maros Sefcovic, described the agreement as a historic opportunity for both Serbia and the EU. This deal not only strengthens the strategic partnership between Serbia and the EU but also reinforces Europe’s commitment to sustainable raw materials, battery supply chains, and the promotion of electric vehicles.
The agreement between Serbia and the EU marks a significant milestone in Europe’s pursuit of lithium independence. By diversifying its supply chain and reducing reliance on China, Europe aims to bolster its economic and strategic position in the global EV market. This endeavor aligns with the EU’s ambitious goals to become a leader in green technology and combat climate change. With this agreement, Serbia takes a step closer to EU membership while simultaneously attracting investment and economic opportunities from German and other EU-based automakers and battery producers. This project signifies not only a turning point for Serbia but also a crucial leap forward for Europe as it strives for greater self-sufficiency in the production of electric vehicle batteries.