The world wants more lithium, but doesn’t want more mines
(Bloomberg) – Prices for lithium, the cornerstone of electric vehicle batteries, have hit an all-time high this year, amplifying concerns that there won’t be enough metal to fuel the abandonment of combustion engines. In this climate, it should be a good time to build a mine.
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The Rio Tinto group discovers the opposite. Months after unveiling plans for a $ 2.4 billion mine in western Serbia, local opponents staged a movement that rocked the government and paralyzed towns as thousands marched through the streets. Authorities subsequently suspended a land use plan for the proposed mine, although they did not completely reject the project.
“The whole Jadar project is just another way for multinational companies, with the help of our state, to make profits and cause damage to the Serbian people,” said Slavisa Miletic, a living activist. near the planned mine.
The opposition Rio faces is replicated around the world, and industry executives see it as their biggest challenge going forward. Southern Copper Corp. struggles to secure government support for a controversial $ 1.4 billion project in Peru, and Lithium Americas Corp. was taken to US federal court over its Nevada mine project.
Historically, mining provided jobs and economic development to generally poor areas, with taxes and royalties to fill government coffers. But too often, people living nearby have paid the price for environmental degradation and occasional disasters.
It’s changing. Residents retreat, deciding that the economic benefits do not outweigh the costs to their quality of life. Governments are also increasingly reluctant or unable to override these concerns.
“It has become more difficult to build a mine today than ever before,” said Ben Davis, mining analyst at Liberum. “It’s much easier to organize the opposition, often in rural and isolated communities.
To appease criticism, the Serbian government proposed a referendum on the mine, but that itself has become controversial, with the opposition saying recent legal revisions have tipped the scales in favor of the government – and Rio -.
Protesters also blasted an effort to speed up ownership changes for public and private projects. Outrage forced President Aleksandar Vucic to send the proposal back to parliament for reshuffle.
“Environmental issues have long been neglected in Serbia because the economy and standard of living have dominated for years,” said Bojan Klacar, director of the Belgrade-based Center for Free Elections and Democracy, or CESID. “The priorities have changed.
A few thousand Serbs demonstrated for a fourth weekend in several cities, demanding an unconditional ban on lithium exploration and mining by any company, not just Rio Tinto. At the biggest rally, in the capital Belgrade, activists vowed to step up their protests if their demands are not met by next month.
When Rio, the world’s second largest miner, announced the project in July, it seemed like a slam dunk for new CEO Jakob Stausholm.
Lithium is a product of the future essential to global decarbonization. The biggest automakers, from Tesla Inc. to Volkswagen AG to Toyota Motor Corp., need an ever-growing supply of battery materials to accelerate the deployment of electric vehicles, BloombergNEF expecting demand for the minerals contained in lithium-ion packs is multiplied by five by 2030.
A global lithium price index has more than tripled this year, and BNEF predicts lithium-ion battery prices will rise next year for the first time since 2010.
In addition, the mine would be built on farmland, not on virgin forest, and only a 10-hour drive from the epicenter of German automobile manufacturing. The project, which Rio believes could create more than 2,000 jobs, is slated to open in 2026 and reach full production in 2029.
Still, this laundry list of supposed benefits doesn’t matter to many. Mining’s grim past includes a plethora of deadly disasters, from cyanide leaks to dam collapses.
Last year, Rio’s CEO was kicked out after the company destroyed an ancient Aboriginal site in Juukan Gorge in Australia.
“We have a history of things in our organization that we are not proud of, and Juukan is No. 1 on this list,” said Sinead Kaufman, head of the Rio unit that plans to build the Serbian mine.
And it’s not just lithium that’s becoming the problem. Copper is an essential metal for the energy transition, with demand expected to grow by nearly 50% over the next decade, according to Chilean miner Antofagasta Plc. Mines typically take around 15 years to go from discovery to production.
Even so, many of the best prospects are in limbo. Rio’s proposed Resolution copper mine in Arizona, which could meet a quarter of U.S. demand, is under review by the federal government after opposition from the San Carlos Apache tribe, whose leader refused to meet with the Rio CEO earlier this year.
“Despite mining’s contribution to almost every aspect of modern life, the industry is still seen as an industry that takes more than it gives,” said Mark Cutifani, CEO of Anglo American Plc, in a speech in London this month.
Rio’s challenge now is to convince the Serbs that the Jadar mine will no longer be like the mines of yesteryear. The company says it will be built to the highest standards, reuse almost all of its water, and use electric trucks.
“A mine that is going to be built in the 2020s, that is going to last for decades, will be very different from something that was built 50 years, even 20 years ago,” said Kaufman of Rio. “This is the message we need to get across.
(Updates with another weekend demonstration in Serbia, in 11th paragraph)
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