Reuters: Rio Tinto could sue Serbia

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    Reuters: Rio Tinto could sue Serbia

    The Rio Tinto company could sue the Serbian government under the bilateral investment agreement between Serbia and the United Kingdom for violating the provisions on fair and equal treatment, reports Reuters.

    According to Reuters, Rio Tinto says that although they are aware of the political tensions surrounding the project, the decision of the Serbian Government to suspend the project is a surprise because of which the company is in a hurry to find a strategy for the future.

    Given the upcoming elections, Belgrade has suspended the project after major anti-mining protests, shattering Rio Tinto’s hopes of becoming one of the world’s top 10 lithium producers.

    The company, which claims to have always respected Serbian law, is assessing the legal basis for the Serbian authorities’ decision.

    Rio Tinto could sue the Serbian government under the bilateral investment agreement between Serbia and the United Kingdom for violating fair and equal treatment provisions if the government continues the process and formally terminates the permit without a valid reason, as lawyers specializing in international trade disputes told Reuters.

    However, it is unlikely that the arbitration tribunal would force the Serbian government to re-issue the permit, while that would harm Rio Tinto, because the relations between the two parties would become irreparable, lawyers say.

    “It is very unusual for a large mining company to sue the state. A lawsuit under the bilateral agreement is always the last option,” said Peter Leon, a partner in the law firm Herbert Smith Freehills.

    According to Reuters, Rio Tinto said that it would not give new comments on this issue.

    If the new Serbian government supports this decision, it would make Rio Tinto leave without taking further action, legal experts also say.

    Rio Tinto has already spent hundreds of millions of euros

    The agency concludes that the company has already spent US$450 million on various studies, and it has invested years in developing technology for the economic extraction of lithium from jadarite, the mineral that has so far been found only in the Jadar Valley.

    Last year, the company delivered a pilot lithium processing plant in four 12-meter-long containers to Serbia.

    The project in Serbia was planned to be the largest lithium mine in Europe, to produce 58,000 tons of refined lithium carbonate from which batteries are made, which is enough to power a million electric vehicles, Reuters adds.

    In Serbia, the best scenario for Rio Tinto would be to regain lithium mining permits after the April elections, Reuters continues, adding that “the populist ruling coalition led by the Serbian Progressive Party is experiencing a drop in support gained in the 2020 elections due to supporting mining in Serbia.”

    Izvor: Agencije

    Foto: Pixabay

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