(Bloomberg) -- Serbia’s constitutional court overturned a government decree that in 2022 abruptly blocked Rio Tinto Group’s $2.4 billion lithium project in the country amid political controversy and protests by environmental activists.
The Belgrade-based court said the move was unconstitutional and the “government exceeded its authority.” The judges announced the decision on Thursday in a session that wasn’t announced in advance, but saw several activist groups gather outside the court building amid rumors the ban would be lifted.
In January 2022, then-Prime Minister Ana Brnabic put a stop to the project after parts of the public grew concerned that mining and processing the metal vital for battery production would heavily pollute the western part of Serbia where the mine was planned. The project is named Jadar, after a valley where lithium deposits were discovered.
The 2022 decision highlighted how it has become increasingly difficult to build new mines in places like Europe, even as governments try to secure supplies of critical minerals like lithium that are important for the energy transition. Still, lithium prices have plunged in the past couple of years as the market whiplashed from fears of shortages to an oversupply.
Rio Tinto welcomed the new ruling, and believes that Jadar “has the potential to be a world-class lithium-borates asset that could act as a catalyst for the development of other industries,” the company said by email.
The court said its ruling is not about “reviving” the project, but about the scope of the government’s authority.
The country’s dominant politician, President Aleksandar Vucic, has repeatedly expressed regret that the project was halted, saying it was a missed opportunity to boost Serbia’s economy. Last month, he said authorities may soon let the Anglo-Australian miner resume preparations to open the mine in 2028.
The project potentially producing 58,000 tons of lithium a year would proceed only with firm guarantees from Rio Tinto that it will meet strict environmental standards, Vucic said in an interview with the Financial Times.
--With assistance from Thomas Biesheuvel.
(Updates with comment from Rio Tinto in fifth paragraph)
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