German Chancellor plans lithium deal with Serbia following Rio Tinto decision

German Chancellor Olaf Scholz plans to visit Serbia this week to secure supplies of lithium, which is critical to the country's energy transition and its auto industry.

Scholz is likely to arrive in Belgrade on Friday to sign the agreement with Serbian President Aleksandar Vucic and cabinet ministers, according to the sources, who asked to remain anonymous because details are not yet final.

A German government spokesman declined to comment. The Serbian government did not immediately respond to a request for comment.

The potential deal comes a week after Serbia's highest court overturned a 2022 government decision to halt Rio Tinto Group's $2.4 billion lithium project over concerns about its environmental impact. This will be the largest lithium mine in Europe.
Vučić said the mine could potentially produce about 58,000 tons of lithium per year. However, it will not start operating until 2028, and then only with strong guarantees regarding environmental protection measures.

The European Union is entirely dependent on lithium imports, a major source of concern when the bloc drafted landmark legislation last year aimed at boosting supplies of the critical mineral.

But progress has so far been limited by broad agreements with allies such as Australia, and critics say a faster flow of direct funding is needed to help developers weather a severe downturn in battery metals markets.

Serbia's agreement with Germany, Europe's largest economy, comes as the former Yugoslav republic seeks EU membership.

Lithium will help Germany speed up its transition away from polluting gas and coal and electrify its auto industry. There are also several domestic lithium projects being pursued by startups such as Vulcan Energy Resources Ltd.