21st January 2022
I’ll admit I’m not the first person to point out that the Serbian government’s revocation of the licenses for Australian mining giant Rio Tinto’s Jadar lithium project came remarkably quickly after the Australian government kicked the pride of Serbia, Novak Djokovic, out of the country. To be fair to the Serbian government, there’s more behind its decision than petty revenge for slights to its national pride; protests against the $2.4 billion operation have been roiling since last year, with activists blocking roads and bridges around Serbia and at Rio’s London headquarters in December. Inevitably though, Novak himself has touched this issue – he shared an Instagram story in support of the protests last month. But this is a mining newsletter, so let’s forget about diplomatic scuffles and the sporting heroes who can apparently trigger them, and instead take a closer look at what Rio, and Serbia, have lost with the cancellation of Jadar.
Firstly, it’s hardly news that most market watchers see a serious boom for lithium on the horizon, with demand expected to skyrocket as the battery storage and electric vehicle industries take off in the coming decades. Rio’s head of economics, Vivek Tulpule, said in October that 60 more Jadar-sized projects might not be enough to fill the supply gap predicted to emerge by 2050, and the company has therefore been positioning itself to take advantage of the looming shortage. In 2018 it made an attempt to acquire a $5 billion stake in the world’s second-largest lithium miner, Chile’s Chemical and Mining Society (SQM), and since then has invested $10 million in a demonstration plant that has produced battery-grade lithium from waste at its Boron mine in California, where the company stumbled across the metal while looking for gold. However, that was supposed to be small bananas compared to the jewel in Rio’s lithium crown: Jadar.
The deposit is a truly remarkable one from both a geological and exploration perspective. The greenfield discovery was unearthed by Rio geologists near the town of Loznica in the Jadar valley of western Serbia in 2004, and incredibly, the main ore mineral, Jadarite, was unknown to science before being accepted by the International Mineralogical Association in 2006. It contains all the elements of interest at the project (lithium, boron and sodium), and mineralised lenses up to 50 m thick containing the new mineral lie within layers of sedimentary rocks that were deposited in an ancient basin. There are likely decades’ worth of Master’s and PhD theses to be written about jadarite: how the crystals nucleated, where the valuable metals might have come from, and descriptions of the environment in which it formed are all topics that spring to mind. Hopefully the cancellation of Rio’s permits does not mean that the answers to these questions are now buried forever.
The Jadar project alone was supposed to rocket Rio into the world’s top 10 lithium producers with 5% of global supply; the plan was to produce 58,000 tonnes of lithium carbonate per year after it hit full production in 2029 in addition to boric acid and sodium sulphate. That’s enough to get one million electric vehicles on the road, multiplied by an expected mine life of 40 years. So what went wrong?
From an outside perspective it’s hard to disentangle how much of the recent Serbian anti-mining protests were driven by genuine environmental concerns and how much by simmering anti-corporate and anti-foreign sentiment. For example, that Instagram story posted by Djokovic mentioned preserving clean air for people’s health, but you’d think efforts to increase the accessibility of electric vehicles would be a good move in that direction. The populist wave that swept other European nations around same time as it hit the US is now at full force in Serbia, with one commentator stating that the ruling elite in the country was losing popularity and was increasingly beholden to the demands of the population. Not that there’s anything wrong with listening to your citizens, but as other countries have found out over the past few years, capitulating to their every whim doesn’t always lead to the best governance.
The populist ruling party elected on that sentiment in 2020, the Serbian Progressive Party (SNS), and the coalition it leads were initially supportive of mining investment in Serbia, but the recent large-scale protests, which also targeted the Chinese-owned Bor copper mine, have pushed Prime Minister Ana Brnabic in the opposite direction. The SNS and its coalition partners are seeking to hang on to their comfortable majority from 2020 in a new parliamentary and Presidential vote expected in April. Before the hammer fell yesterday, Rio had already faced delays in the permitting process that saw it announce last week that first production at Jadar had been pushed back a year to 2027, but things got so much worse when Brnabic said that all the project’s licenses had been annulled. She stated that “As far as project Jadar is concerned, this is an end,” and that Rio had not provided sufficient information to local communities about the project. To this Rio replied that they had always operated in compliance with Serbian law. The company says they are “seriously concerned” about the decision and are reviewing its legal basis, which seems like a restrained response under the circumstances. There’s clearly some political cynicism at work here, whether in response to domestic sentiments or Australian immigration decisions; not even a month ago, when it was politically expedient, Brnabic said that any decision on Jadar’s fate would likely be deferred til after the April elections.
It’s a shame for Rio, obviously, because they’ve poured hundreds of millions into Jadar, and it’s a shame for science because the geologist in me believes we could learn a lot from this very special deposit. That’s not to mention the loss to the market of increasingly valuable lithium that can fuel a green energy revolution and the associated environmental gains. But this decision is also a shame for Serbia. The mining sector there is growing rapidly, providing jobs and economic development to an economy that could certainly use them, and the government predicts that mining could go from its current 2% contribution to GDP to 4-5% within ten years. But looking at this decision, how can the country expect any miner, large or small, to feel secure investing in its resource sector? Without investment, how can mining contribute to Serbia’s prosperity? It can’t. That’s not to say opposition to mining projects on environmental grounds should be dismissed out of hand; far from it. But it should take more than vague Instagram posts by science-averse jocks to scupper projects like Jadar.
Around the Traps
Incredible news from Filo Mining (TSX:FIL, OTQX:FLMMF), who have announced an intercept spanning over 1.2 km grading 1.26% CuEq at their Filo del Sol project on the Chilean-Argentine border. The new intersection at the high-sulphidation epithermal copper-gold-silver deposit lies entirely outside the current mineral resource with a high-grade zone still open in three directions and at depth.
One of the most diverse and exciting juniors in Ontario is Conquest Resources (TSXv:CQR), who have properties covering everything from uranium to gold via copper, IOCG deposits, PGEs and more. Frank Gagnon from CQR sat down with Katie Pilbeam from Proactiveinvestors at Mines and Money London in December, resulting in a video sure to give you valuable insights into the company’s work. Check it out below!
One active junior moving quickly on the Peruvian gold rush is Palamina (TSXv:PA, OTCQB:PLMNF), and they’ve just notched up the assay results from the first drilling at their Usicayos project. The orogenic gold system at the surface has been confirmed to continue to depth, and they hit a visible gold intercept into the bargain.
Aurion Resources (TSXv:AU, OTCQX:AIRRF) has more than one joint venture with B2Gold (TSX:BTO), and one of those is the Helmi project that has just produced some nice gold numbers over significant intercepts. They’ll be spending CAD$10 million on this project this year, so it’s worth keeping an eye on.
Another company on the lookout for the yellow metal in Finland is Firefox Gold (TSXv:FFOX, OTCQB:FFOXF), and they’ve just announced that their winter drill programme is on track with around 3,800 m drilled so far across three projects. Next on the list is the Sarvi project, which is set to get its first drilling by the company before the end of the month.
Of course, the current champion among northern Finnish gold juniors is Rupert Resources (TSXv:RUP, OTCQX:RUPRF), who lead the way with their incredible multi-million ounce Ikkari deposit. And the good news just keeps coming: they’ve just released results that returned some higher grades from infill drilling than their reported resources estimate contained, and which extended the gold-copper Heinä Central target. The company has six rigs turning this winter across Ikkari and regional targets.
Streetwise Reports takes a look at what makes Gsilver (TSXv:GSVR) an exceptional junior miner: they have actual cash flow. It’s a good insight into an agile strategy that has yielded quick results, with a mine and processing facility already in operation.
The news keeps coming for Mawson Gold (TSX:MAW, PINK:MWSNF, FRA:MXR), who have another announcement out this week. The company has acquired an option for 85% of the promising Skelleftea North gold project in Sweden, which has the potential for nice synergy with their flagship Rajapalot project in Finland, just four hours away.
That’s your news for the week, best wishes to all of you for a lovely weekend.
- Jane Lockwood