The European Union and Serbia signed a deal on Friday to develop a lithium mining project and production chains for batteries essential for electric vehicles.

"There will be no project without full protection, and we know it will happen because we are bringing the best experts from Europe to Serbia," said Serbian President Aleksandar Vucic ahead of the signing ceremony.

A memorandum of understanding was signed by Serbia's Mining and Energy Minister Dubravka Djedovic-Handanovic and EU energy chief Maros Sefcovic after a critical raw materials summit.

The agreement comes days after Belgrade gave the go-ahead for work to resume at a controversial lithium mine.

Europe moves ahead in global lithium race

German Chancellor Olaf Scholz was in Belgrade on Friday for the signing of the deal. He welcomed the move and said it would help Europe maintain its independence and offer opportunities to boost the production of batteries and electric vehicles, seen by many as a key to achieving environmental goals.

"It is important that such a decision was taken today," Scholz said, adding that it "increases resilience and promotes industry."

Europe has fallen behind other major global players in securing access to lithium, and other key materials. China in particular has made it a central industrial policy, allowing Chinese battery companies to become some of the biggest in the world.

Europe's own lithium source

The Jadar mine is believed to hold Europe's largest reserve of lithium, with the potential of providing up to 58,000 tons of lithium per year, enough to build 1.1 million electric vehicles, Serbian media has reported.

The project is being led by Australian mining giant Rio Tinto, with car manufacturers Mercedes-Benz and Stellantis pursuing negotiations for a stake in the project.

However, the mine is also a source of controversy for locals — as is the case for many lithium mines around the world. There are fears that the operation could pollute water supplies and impact the local community.

But the deal could also be a major boost for Serbia, especially in terms of its relations with the EU. While Belgrade has an official candidate status, its relations with Brussels have soured in recent years.

It is also expected to bring in billions in foreign direct investment.

ab/fb (AFP, Reuters)