Chancellor Olaf Scholz visits Serbia tomorrow in search of a deal allowing Germany’s auto industry access to vital supplies of lithium, the key substance in manufacturing the batteries used to power electric vehicles. The EU is trying to reduce its dependency on China’s near dominance of the supply chain for lithium-ion batteries. Germany is Europe’s largest car manufacturer.
Earlier this month, Serbia’s constitutional court reversed a ruling to cancel a 2.195 billion euros approx. excavation project in western Serbia being undertaken by the British-Australian mining giant Rio Tinto. The decision to cancel plans to excavate what is understood to be the largest lithium discovery in Europe came after thousands of protesters in Serbia blocked major roads and bridges in 2021 to show their opposition to the Rio Tinto project amidst concerns about the potential threat to the environment. At the time, the demonstrations constituted a major challenge to the growing autocratic rule of Serbia’s President Aleksandar Vučić.
Activist leaders have warned there will be renewed protests should the government implement its latest lithium excavation plans, defying Serbia’s interior minister who has promised that police will not allow any more blockades of roads or railway lines.
According to the German government’s spokesperson, Steffen Hebestreit, Chancellor Scholz and European Commission vice president Maros Sefcovic are to attend “a critical raw materials summit” tomorrow, where they will sign a memorandum of understanding (MoU) between the EU executive and Serbia for a “strategic partnership” on sustainable raw materials, battery supply chains and electric vehicles. Speaking to reporters in Berlin, Hebestreit cited the Serbian government’s positive response to criticism, saying it was important to recognise that higher environmental and sustainability standards had now been set for the controversial project.
Vučić and other Serbian officials have made clear that the lithium excavation will go ahead provided Germany and other EU states build factories for manufacturing their car batteries in Serbia, rather than the direct export of the raw materials to those countries. Prime Minister Miloš Vučević declared that the tentative deals awaiting signature meant that “we have an advantage in our hands.”
