Rio Tinto ‘welcomes’ Serbia lithium court ruling, while Citi says buy Arcadium Lithium instead
![The Jadar lithium project](https://images.thewest.com.au/publication/C-15331299/acafb97ed42f241f770bb805d01797056ca2bbbc-16x9-x0y25w1074h604.jpg?imwidth=810&impolicy=wan_v3)
Rio Tinto has secured a major legal victory in Serbia that paves the way for a “world-class” lithium project to be brought to life.
The Serbian Constitutional Court on Thursday night ruled that a decision made by the European country’s government two years ago to revoke Rio’s spatial plan permit for the Jadar lithium project was unconstitutional.
Following massive protests organised by environmental campaigners, the government in January 2022 revoked Rio’s permit for the $US2.4 billion ($3.5b) lithium project.
In a statement, a Rio spokeswoman said the company “welcomes the decision” of the court.
“We continue to believe the Jadar project has the potential to be a world-class lithium-borates asset that could act as a catalyst for the development of other industries and thousands of jobs for the current and future generations in Serbia,” she said.
“We are focused on consultation with all key stakeholders.”
The mega project could hypothetically start operating from 2028 and potentially supply 90 per cent of Europe’s current lithium needs. Rio committed funding for Jadar in 2021 but strong community opposition, legal hurdles and a weak lithium market have slowed progress.
Analysts from Citi reckon Rio should abandon Jadar altogether and instead focus on acquiring Arcadium Lithium — which was born out of a merger last year between ASX-listed Allkem and US-based giant Livent.
“We calculate conservatively the cost to build a lithium company with equivalent capacity to Arcadium at some approximately US$7.7b ($11.4b), around approximately two times Arcadium’s enterprise value to find and develop this capability from scratch,” a note to clients said.
“We calculate the Jadar project internal rate of return at approximately 12.1 per cent and one per cent net asset value accretion versus acquiring Arcadium with a 16.4 per cent internal rate of return and 3.1 per cent net asset value accretion.”
Rumours have been swirling for months that Rio has been interested in buying Arcadium as a counter-cyclical push into lithium.
The Rio spokeswoman said the company does not comment on deal speculation.
Arcadium has multiple lithium carbonate mining projects in Argentina and a large lithium hydroxide plant in the US state of North Carolina.
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