Anglo-Australian miner Rio Tinto is indefinitely suspending development of Jadar, its flagship European lithium project in Serbia, as part of cost-cutting measures and in line with its new chief executive's initiatives to streamline operations.
Rio instead will prioritize other shorter-term opportunities and reduce costs, according to reports confirmed by the company, which no longer could justify the required expenses and resource allocation given delays the permitting process.
The company has been trying to commission the project since its discovery in 2004. It signed a memorandum of understanding with the Serbian government in 2017 to advance it, but was stopped by permitting issues and staunch opposition by local communities. Jadar, wholly owned by Rio Tinto, is one of the largest confirmed greenfield lithium resources in the world at 16.6mn metric tonnes (t) of lithium-borate ore with an average grade of 1.8pc lithium oxide, which is high compared with similar resources.
Rio Tinto had committed $2.4bn to the project.
Some market participants have long expressed skepticism over Jadar's chances.
"I never believed it would happen for many reasons, from technical to social, and licensing perspectives," one market source told Argus. "Rio was basically losing money every year keeping it, so stopping it makes sense," said another one.
The move comes less than three months after the company announced a global restructure of its operations under the guidance of newly appointed chief executive Simon Trott.
Lithium is one of Rio Tinto's main divisions after the restructure. Earlier this year, the company finalized the $6.7bn acquisition of Arcadium Lithium, Argentina's largest producer.
Rio is also primed to be one of Chile's largest lithium producers after securing two major mining concessions.
