Thewesternbalkans
After Serbian President Aleksandar Vučić hosted his Chinese counterpart Xi Jinping in Belgrade in May, two months later he bowed to the EU by offering the union Serbia’s lithium reserves. The European Union and Serbia have signed on 19 July a memorandum of understanding over the supply of battery materials during a “critical raw materials summit”. This step is intended to reduce dependence on lithium supplies from China and strengthen European economic security.
Serbia has vast lithium deposits near the western city of Loznica, where a mining project run by the Anglo-Australian mining giant Rio Tinto has been developed.
Lithium is a strategically valuable metal crucial for making electric vehicle batteries, making it key for helping Germany’s flagship automotive sector shift to greener production.
Vučić’s move is a typical example of Serbia’s policy of balancing between East and West – Serbia does not apply sanctions against Russia, but Vučić meets with Zelensky and Ukraine fights with Serbian ammunition; Belgrade maintains friendly relations with Beijing, but will help China’s European rivals in the auto industry by giving lithium to the EU.
Of course, China will not suffer much from the lack of access to one of the world’s many lithium deposits. Rio Tinto has said Serbia’s Loznica mine could produce an estimated 58,000 tons of lithium annually, which is a drop in the ocean for China’s huge needs for this raw material. Serbia is important to China mainly as one of the few political allies in Europe. On this basis, Vučić weaves his political intrigue and raises his price: “The partnership (with the EU) will further strengthen political relations and promote long-term economic growth in Serbia and the EU, contributing to Serbia’s efforts to join the EU”, the Serbian government said in a statement on July 18 about the deal.
The signing of the lithium deal with the EU and President Vučić’s promise not to sell lithium to China will help the EU reduce its dependence on China. Brussels also hopes the lithium deal will distance Belgrade from China and Russia. However, some critical voices in Germany warn against becoming dependent on Serbia, which for Berlin is not an ideal partner, as it does not participate in the sanctions against Russia, implements a free trade agreement with China, and has internal problems related to the supremacy of the law, freedom of speech, authoritarian rule.
For Serbia, the potential environmental damage from lithium production remains.
The criticism of the Serbian opposition forces against the cooperation agreement with Brussels on the supply of critical raw materials is not only related to environmental challenges. Allegations are that the agreement was prepared in secret from the public, was not debated in parliament and voters were deceived. In fact, there were small debates in Serbia 3-4 years ago that showed the disapproval of a large part of the population towards lithium mining. The opposition is against the mining of lithium, which would bring the country closer to the level of African countries – with cheap labor and export of raw materials.
Insisting that it was the negotiation of the lithium deal that caused the EU to turn a blind eye to election theft, the opposition in Serbia is calling for new early elections. Thus, the rulers’ deal with Brussels opened a new front in the fight with the opposition, which believes that the issue of lithium mining will be one of the reasons for the fall of the current regime in Belgrade.
In some Balkan nations there is a saying: He who sits on two chairs falls to the ground (in the case of Serbia, at least on three chairs…). No matter how skillfully Vučić maneuvers between different camps on the world stage, the dynamic development of events in international politics may put him in a position to damage his relations with Moscow (which may stop turning a blind eye to Serbian arms sales to NATO, which then falls into Ukraine), to cool relations with China (because of lithium) and not be able to keep Kosovo (because of the EU membership condition).
The signing of the cooperation agreement with Brussels on the supply of critical raw materials will not speed up the accession process of Serbia to the EU and compensate for what Belgrade has missed over the years. The agreement concerns a small segment of economic relations between Serbia and Germany and has no relation to the opening and closing of negotiation chapters. There will certainly be a short-term reduction in Serbia-EU/Germany tensions, but the agreement will not replace the key issues of Serbia’s European integration – the rule of law in Serbia, relations with Russia, the Kosovo problem.
