Work at one of Rio’s biggest lithium projects is about to be paused. Here’s why.
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The Jadar project, located in Serbia, has been the focus of intense debate within the European country, with protestors hitting the streets to voice concerns about its environmental impact.
Jadar’s development plans were reportedly suspended by the local government last week. Now, Rio will have to interrupt the project’s momentum to host public dialogue over the mine.
At the time of writing, the Rio Tinto share price is $100.23, 1.02% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is also up today, having gained 0.65% in early morning trading.
A quick note before we start: All quotes have been translated from Serbian.
Rio Tinto share price maintains positive trajectory
The managing director of Rio Tinto’s Serbian subsidiary, Vesna Prodanović, has reportedly told the local media outlet, Beta that the company will be stopping works to “acquaint residents with all aspects of our project and answer all questions”.
Fortunately for investors, the Rio Tinto share price remains on a positive trajectory today and is up 2.87% so far this week.
However, this delay could be detrimental to the company’s push into lithium. According to Rio Tinto, the Jadar project is one of the world’s largest greenfield lithium projects.
Rio plans to use the minerals from Jadar to create batteries for electric vehicles and renewable energy storage.
In a recent investment seminar, Rio Tinto stated it expects the first production of lithium from Jadar to occur in 2026. Though, that’s dependant on receiving final permits and approvals from Serbian stakeholders.
Prodanović told the publication that, so far, only a memorandum of understanding has been signed for the project.
Jadar’s target production is up to 58,000 tonnes of battery-grade lithium carbonate, 2.16 million tonnes of boric acid, and 255,000 tonnes of sodium sulphate each year.
Rio Tinto management commentary
Discussing the pause at Jadar, Beta quoted Prodanović as saying:
It is extremely difficult in such an intense anti-mining and negative campaign to have a reasonable debate on any topic.
Prodanović reportedly told Beta that the company has been buying land for the project since August 2020. It supposedly had to do so to obtain building permits.
It’s the second time news of Rio Tinto’s lithium push has made headlines this week. On Wednesday, Rio Tinto announced a $1.15 billion acquisition of the Argentinian Rincon lithium project.
Over the year to date, the Rio Tinto share price has fallen 13%.
The post Rio Tinto share price gains despite reports $3.3b lithium project to be halted appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.