Germany's New Lithium Deal Reduces Europe's Dependence on China

07 Aug, 2024

Germany's New Lithium Deal Reduces Europe's Dependence on China

German Chancellor Olaf Scholz visited Serbia to discuss a major lithium mining deal that could lessen Europe's reliance on China. This deal is particularly important for Germany, Europe's largest carmaker, which is working to secure lithium for electric vehicle (EV) batteries amid the European Union's efforts to reduce dependency on Chinese imports. Lithium is essential for EV batteries, and currently, China dominates this supply chain.

The focus on lithium intensified after Serbia's constitutional court recently overturned a previous ruling that canceled a $2.4 billion mining project by Rio Tinto in the Jadar Valley. This site, believed to be Europe's largest lithium discovery, has faced significant opposition from environmentalists and Serbian citizens who protested against the project due to potential environmental hazards. These protests represented a major challenge to Serbian President Aleksandar Vucic’s administration.

During Scholz's visit, a memorandum of understanding was signed between the EU and Serbia to establish a strategic partnership on sustainable raw materials and battery supply chains. The agreement includes commitments to high environmental and sustainability standards. Serbian officials have emphasized that the mining project will proceed if EU countries invest in local battery manufacturing, ensuring that Serbia benefits from this significant opportunity.