Rio Tinto Group is building a lithium mine in Serbia, and the company is going to spend a whopping $2.4 billion on its development. Rio’s Jadar project marks the first big move into lithium by a mining major, according to Bloomberg. You might recall the company, due to its destructive mining practices in Australia.
Rio Tinto is the world’s second biggest miner, behind only BHP, which partially explains the scope of the project and how much Rio is spending. For contrast, another company trying to mine lithium in Nevada planned to invest $400 million, or about $2 billion less than Rio. Jadar is a big project, set to produce almost 64,000 tons of lithium per year when it reaches full production capacity in 2029. For more contrast, one of the largest lithium miners operating right now, Ganfeng, is opening a mine in Argentina that will produce just over 22,000 tons per year. Big difference.
Except there are serious environmental concerns about the extraction of lithium that underscore the importance of being mindful of the environment, even as these megacorps start mining. And it’s really not clear that Rio Tinto will do so responsibly; they don’t have the best track record when it comes to dealing with the local environment and its stewards.
The company has been at odds with Aboriginal groups in Australia after reportedly destroying historical artifacts — among other acts of environmental destruction — so those skeptical of the company’s environmental good-will have every reason to doubt Rio’s commitment to the environment.
Rio knows this and it’s trying to head off these concerns with its own information campaign about myths and facts pertaining to the mine. A Rio Tinto researcher and geologist, Nenad Grubin, also addressed the issues in a statement:
We know there are concerns about the project, and the future of the mine. And we’re listening to the people raising these concerns with us. We take our obligations to the environment very seriously. We’re investing over $100 million on environmental protections. The future mine needs to be safe for people and the environment, or there will be no mine. It just isn’t good business not to address both the local environmental concerns and peoples’ safety.
Rio is adamant this is a net win for the environment, but we should be wary of the caveats in the green transition. The only thing certain is that the shift away from fossil fuels to renewables is going to be lucrative, per Bloomberg:
It also comes at a time when the biggest miners are looking to shift away from fossil fuels, increasingly shunned by investors. Rio sold its last coal mine in 2019 and is the only major miner to be fossil-fuel free. And its peers are slowly following. Anglo American Plc has agreed to sell its last thermal coal mines, while BHP is in the process of exiting thermal coal and is considering getting out of oil and gas.
Following the money, $2 billion worth, will easily point us to projects on the scale of Jadar, but we should be just as concerned about how these companies conduct their so-called green business.
Rio Tinto expects to start construction of the mine soon, after it’s concluded a number of environmental impact studies. The company says if it can get regulatory approvals, it plans to start mine construction in 2022.