In London, Rio’s shares were down more than 3% deur 3:55 am. EN, slightly underperforming their peers.
Serbian Prime Minister Ana Brnabic told a news conference in Belgrade that the decision came after requests by various green groups to halt the $ 2.4 billion Jadar lithium project that had planned to start production in 2027.
Thousands of people blocked roads last year in a protest against the government’s backing of the project, demanding Rio Tinto leave the country and forcing the local municipality to scrap a plan to allocate land for the facility.
The decision came days after ties between Australia and Serbia hit rock bottom as tennis star Djokovic was deported before he could play in the Australian Open.
Djokovic spoke out in support of “clean air” in a December Instagram story post captioning a picture of the anti-mining protests, which was published by digital sports platform The Bridge.
Twitter users were quick to joke about Rio being deported from Serbia.
Rio said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.
The Australian government said it regrets Serbia’s decision to revoke Rio’s licenses.
“We note the strong economic benefits of the significant investment by Rio Tinto in Serbia. Australian resources companies have an outstanding reputation around the world, particularly when it comes to their expertise,” the government said in a statement to Reuters.
Rio has already spent $ 450 million in pre-feasibility, feasibility and other studies on Jadar to understand the nature of the deposit, the company said in a project fact sheet in July.
“The level of opposition to it has really ratcheted up over the last six months,” Credit Suisse analyst Saul Kavonic said of the Jadar mine.
“We’ve been highlighting for a while now there would be about $ 2 a share at risk if the government cancels it,” Kavonic said.
Hierdie week, Rio pushed back the timeline for first production from Jadar by one year to 2027, citing delays in approvals.
‘Even greater shortage’
At full capacity, the Jadar mine was expected to produce 58,000 tonnes of refined battery-grade lithium carbonate a year, making it Europe’s biggest lithium mine by output.
Experts said the world’s shortage of lithium had been forecast to last for another three years at least, but with the cancellation of the Jadar project, the shortfall would now last for several years.
“We’re at the point now where lithium supply is going to set the pace of electric vehicle rollout,” Kavonic said.
Robust global demand for the metal far outstripping supply growth has pushed lithium prices to a record in recent years.
Lithium futures, which started trading on the CME in May last year, have jumped 171% to a record $ 38/kg on Thursday, according to Refinitiv data.
In China, cash prices of lithium hydroxide monohydrate are trading around a record 262,500 yuan ($ 41,387.47) per tonne, up by more than 400% from a year ago.
Its state planner said on Friday that restrictions on purchases of new energy vehicles including EVs will be gradually removed in a “kragtig” push to promote “green consumption,” a plan likely to further increase demand for lithium.