Mining in ‘Europe’s backyard’: A curse or blessing?

Rich in minerals, the Western Balkans are becoming a popular destination for mining companies serving the European market. EU member states need the minerals for Brussels’  ambitious decarbonization drive. Some citizens say the EU is hypocritical: whilst EU-citizens drive cleaner electric cars, their nations are left with the environmental damage. 

A blooming sea of white myrobalan plum flowers cover the eastern slope of the Majevica, a mountain range close to the town of Lopare, around 25 km from the city of Tuzla, the third largest city in northeast Bosnia and Herzegovina. But it may not be long before the mountain meadows would be stripped of their floral glory, and pristine forests would be cut down, because beneath its rocks, a valuable white substance is hidden: lithium, a chemical element sought after by electric car manufacturers across the European Union (EU).

Buried under the Majevica mountain range lies more than hundred million tons of lithium carbonate, boric acid, potassium, and magnesium sulfate. The Swiss-based company Arcore, which found it in 2022, believes that the deposit has “huge potential for greater independence and supply of critical raw materials throughout Europe over several decades.” The company signed a deal with Canadian company Rock Tech Lithium, which is building a lithium hydroxide converter in Germany, the first of its kind in Europe. The lithium would be sold to the German car giant Mercedes, which would make electric car batteries with it. 

Germany, like many other countries in the EU, is in the market for lithium and other raw minerals like barite and magnesium. In the next decade, with its Green Deal, the EU hopes to implement ambitious environmental plans, for example the deployment of solar panels under the ‘Fit for 55’ package and the ban of all new petrol and diesel cars by 2035. But to fuel the EU’s decarbonization, it needs raw materials now sourced from countries like Congo, Argentina and Chile. The EU hopes to find raw resources closer to home.

In Lopare, citizens are worried about the EU’s hunger for raw minerals even if the excavation has not yet started. Arcore still has to raise several hundred million euros before the start of the project. The company has so far only drilled boreholes on Majevica, to test what minerals they will drill for. But this has already brought pollution, says Andrijana Pekić, a teacher and activist of the association Guardians of Majevica: “The water analysis shows heavy metals were found in the wells in a village near Lopare, where local people get their drinking water from”. An Arcore representative told other residents in Lopare, Pekić recalls, that: “the water is poisonous; it contains heavy metals and manganese, so it is absolutely not for use”.

There is another reason why Arcore should not be allowed to mine, says Pekić: the law of Republika Srpska, one of the two entities ruling Bosnia and Herzegovina, stipulates that Majevica should become a protected area by 2025. Endemic and rare plant species – like the yellow flowered Gregersen’s spurge and Symphyandra hofmannii, endemic to Bosnia – grow on the mountain range. Since the state, by signing the Convention on Biological Diversity, committed to protect 17% of the territory by 2020, ecoactivists hope that their request will be honored. Only three percent of Bosnia and Herzegovina’s nature is currently protected. 

With so much money at stake, will the government respect its own laws?

In February 3.700 citizens in and around Lopare (the town has around 2.700 residents), signed a petition against the mine. The head of the municipality, Rado Savić of the Serbian Democratic Party (SDS), submitted the petition to the parliament of Republika Srpska, ruled by President Milorad Dodik’s Alliance of Independent Social Democrats party (SNSD) in the same month. The mining project has been halted until the proceedings are completed. “If the government respects the Law on Concession, they will ask for our opinion. Then we will come out with a negative opinion, because we think it is not good to do this for several reasons and we listed them in the declaration”, says Savić’s colleague Željko Kerović, the head of the Economic and Social Activities department of the Municipality of Lopare.

For now, the government of Republika Srpska seems hell-bent on exploiting its natural resources to fatten its depleted state coffers. President Milorad Dodik, who has been ruling the entity for nearly thirty years, makes no secret that he would support it. Dodik, whose secessionist threats have made Western governments sanction him and his family, is desperate for a new influx of money. Still, on state controlled TV Dodik says he will only allow mining if certain conditions have been met: “the condition for doing anything (in Lopare) is to build factories for processing, ecologically at the highest standards.”

But Dodik’s word is not worth much, according to ecoactivists. “I hope the government will keep to its own laws”, says Pekić. The government has already broken their own laws, which makes ecoactivists distrust the intentions of the ruling party. The company that did geological research has the right to submit for a mining permit within two years of exploration (which should have been on 31 July 2024). The Ministry of Energy and Mining of the Republic of Srpska, however, already changed the deadline to February 17, 2025. If the company does not submit the request on time, the mining rights will be given to the Republic of Srpska. 

According to environmentalists in Lopare, Dodik’s government has delayed the deadline to prevent losing voters in the area in the entity’s elections in October. Others say that the government knows that the company can not fulfill all requisites for the permit by July.

Arcore has not responded to multiple requests for an interview. In a press release, however, the Swiss-based company says it will use “the latest technology and the highest safety standards to minimize the environmental impact on air, soil and water”. According to the company, around a thousand direct jobs and 3.000-5.000 indirect jobs will be created if the mine gets the greenlight by the government. The area is “sparsely populated” and the mine would pose “no threat to drinking water supplies,” says Arcore.

The “local community” would be expected to gain approx. 6 million euros in royalty from the project, according to Arcore. The concession fee will be divided between the budget of Republika Srpska (which would receive 10%; or 600.000 euros) and the local government on whose territory the concession activity is performed (Lopare municipality, which would receive 90% or 5.4 million euros, more than doubling its current budget). The municipality would receive the bulk of the royalties as it is considered an “extremely underdeveloped area” in terms of economic development, according to entity level concession law.

‘The EU is pursuing an extremely hypocritical policy towards the Balkans’

Mining has long formed the economic backbone of Bosnia and neighboring Serbia. When both mineral rich countries were still part of the Socialist Federal Republic of Yugoslavia (1945-1992), the industry was booming. Millions of people from rural areas migrated to the cities to work in factories; the economy was flourishing. But during the war (1991-1995) the industry collapsed. The post-war years were marked by privatization and a massive loss of jobs. Now, the industry is on the up. Across Bosnia and Serbia – pushed by the European Bank for Reconstruction and Development (EBRD) – new mining projects are opened.

Marko Ristić, a professor at the Forestry Department of Belgrade University in Serbia, fears the EU’s hunger for minerals from the Balkans: “We support that mining is in the public interest, meaning that it serves the interests of the majority of people in any community and does not endanger public health. But, what is intended for Bosnia and Serbia is to become a cheap resource base for the European Union because most of these mineral resources that they would exploit here are also available in the EU. However, they don’t want to do it in the EU because they value the health of their people and preserve their environment”.

“They see the Balkans as a cheap resource base, and what prevails is that they count on the weakness of political systems here; the corruption of so-called political elites and very low environmental protection standards”, says Ristić. The professor does not believe there is such a thing as “green mining”. Most existing lithium mines that are operational are located in deserts in Chile and Argentina and are far from human settlements, he says. The only exception is a small lithium mine in Portugal, from which ore is extracted for ceramics. 

‘Unfortunately, the EU is pursuing an extremely hypocritical policy towards the Balkans, I mean both Bosnia and Herzegovina and Serbia because they allow their companies to operate under standards and apply technologies that are not possible in EU countries. Figuratively speaking, we are on our knees. Serbia is a candidate for EU membership, Bosnia and Herzegovina has been granted candidate status, and they can simply evaluate us. They simply set conditions for our potential, about who knows how distant future membership in the EU, and they very banally and brutally exploit it”, says Ristić.

Ristić points towards the Jadar lithium mine in Serbia – not far from Lopare, at the other side of the Drina river – where environmentalists, politicians, and farmers, have long fought against Rio Tinto. The British-Australian mining company had signed a controversial deal with the Serbian government, to establish a lithium mine in the Jadar valley. Large-scale environmental protests triggered an election in Serbia in 2022 and ultimately caused the pause of the project. According to environmentalists, however, the new government which was formed in May – still under the control of the ruling SNS party of Aleksandar Vučić who initially sealed the deal with the Anglo-Australian mining giant – hopes to resume the Jadar mine. The Jadar mine draws from the same geographic deposit as the Lopare project.

A British silver mine brings environmental and social concerns

In Vreš, a small town in the center of Bosnia, some say a new mine developed by a British company is a blessing, others swear it is a curse. Derelict socialist apartment blocks stand next to huge industrial factories corroded by rust. Only a few pensioners wander the quiet streets. It has been like this since the closure of the steel mill, which employed thousands, at the beginning of the war (1992-1995). During that time, Vareš lost almost two third of its inhabitants, looking for a better life in the capital of Sarajevo or Europe. Foreign visitors have described it as a “ghost town” and as a “perfect location for shooting horror movies.”

Now the new metal mine of Adriatic Metals, a multinational company registered in London with the largest foreign investment in Bosnia since the Dayton Peace Agreement (1995), offers a reason for careful optimism. About 800,000 tons of metal ore with 65,000 tons of lead-silver and 90,000 tons of zinc will be mined annually in the new mine, hidden in the forested mountains not far from the town. In 2020, the European Bank for Reconstruction and Development bought a 2.6 percent stake in the project, investing 6.84 million euros in the mining company. Company representatives estimate that the company’s contribution will be a 2 percent increase in the country’s GDP. Most will be for metal smelters in the EU.

Not everybody is happy with mine. Environmental activists say the concession fees are way too low and speak of a “neo-colonial relationship” with Brussels. “Our politicians adapt the model to companies, so that in the end they don’t pay the real price for the damage they will commit. With us, things work so that whichever investor comes, they will grant him a concession”, says environmental activist Anes Podić from the Eco Action Association in Sarajevo. The cantonal government lowered the concession fee from 5.000 euros to 75 euros per hectare and only charged 2 euros per ton of ore.

They also don’t make a distinction between the type of metal excavated. According to the cantonal law, 70 percent of the concession fees are for Vareš and 30 percent to the cantonal budget. This means the town of Vareš and Zenica-Doboj Canton will receive the same fees for both lead and silver.

“Yes, the concession fees are really low, but that’s not my fault, but the fault of the Bosnian government”, says Paul Cronin, the CEO of Adriatic Metals. According to the mining entrepreneur, his company will bring jobs and education opportunities. Even though the company has already invested 2.8 million euros in the training of new employees, it currently employs only around 300 people and 250 subcontractors in the town of 6000 people.

Podić says that the promise of new jobs in Vareš is exaggerated, because according to official data, only one more person was employed in Vareš in 2022 compared to 2019. 

Due to recent media pressure, the government has announced that it will form a special commission with the company to determine a new concession fee. “Now it’s time to reconsider the price. The proposal to increase the concession fee came at the initiative of the company Adriatic Metals itself, in order to find better solutions”, says Prime Minister of Zenica-Doboj Canton, Nezir Pivić. Pivić’s Party of Democratic Action (SDA), negotiated the concessions fees with the foreign company but Pivić did not want to admit the mistakes of his predecessors who made decisions on the low concession fees. It may take a while to see what the effect is of this promise: “The commission was not yet formed because we are trying to form it with a group of international and domestic experts, who will know how to recognize and give the best world compensation standards in this industry”, says Pivić.

Whilst in Vareš the start of the export of precious metals is being prepared, in the neighboring city of Kakanj, citizens are worried that the new mine, located on the border of the two municipalities, will threaten the city’s drinking water supplies. The stream from which the water is taken is only a few hundred meters away from the mine. In April last year, water samples showed elevated levels of cadmium. Exposure to low levels of this metal in the air, food, and water over time may build up cadmium in the kidneys and cause kidney diseases and bone erosion. Cadmium is considered a cancer-causing agent. Local government representatives suspect that work in the mine led to this. Adriatic Metals claims it is impossible as the mine is not connected to the stream by underground water channels.

“The company said that our water was polluted before their actions, which is a notorious lie. It’s shameful what they say and what they do”, says Hajrija Čobo, an environmental activist from Kakanj. Last December, she received a notice that the company filed a lawsuit against her for defamation of the company: “There is a lot of evidence for pollution, not only footage from the field, where excavators are in the bed of the river that comes into our water catchment, but also laboratory findings that show an increase in cadmium in drinking water.”

In Vareš, councilor Mirnes Ajanović from the Social Democratic Party (SDP) is one of the few local politicans who publicly criticizes the company: “For now, this problem is escalating in Kakanj, but it’s only a matter of time before it starts escalating in Vareš. From Rupice, then along the transport road to Veovača above the town of Vareš, where the ore will be grinded, separated and processed, massive tailings will accumulate for the next 15-20 years. Rain will cause leaching from the tailings to the underground water sources, with toxic elements ranging from cadmium to mercury”, he warns. According to him, the mine won’t bring long term development for locals in the area: “Vareš gained about a hundred jobs, and no one wondered how many jobs we will lose in the tourism and agriculture sectors in the future.”

Will everyone benefit when minerals are found?

“The Western Balkans has an enormous amount of crucial minerals, many of them mined, that could be of importance to the EU”, says Miloš Bošnjaković. The enterpreneur gained experience in the industry in Western Australia but returned to his native Bosnia nearly a decade ago in search of precious metals. He was part of Adriatic Metals when the company discovered the metal ore deposit in Vareš. Now, his company Lykos Metals Limited, explores minerals across Republika Srpska: “I think of Bosnia as an unexplored, or not explored area.” The Balkans have some of the largest mining reserves on the continent, the entrepreneurs say, but there are also other advantages in exploring here: “It is my experience that government officials are more than happy to give you a permit”.

When it comes to environmental concerns, Bošnjaković – who himself has faced “problems with environmentalists”, believes that the EU has to do more “to help”. “I think that the European Union should do a little bit more to help us to explain to ordinary people why minerals are so important. If these environmental people are going to stop everything, how are we going to produce goods like mobile phones tomorrow?”, Bošnjaković wonders, and added: “the people in the EU and in Bosnia will benefit together. Bosnian people will work and will be educated in the process. Everyone will benefit when we find critical materials.”

But Adi Selman from Karton Revolucija, a youth movement of environmental activists from the city of Tuzla, who does not agree with Bošnjaković. In March, in Tuzla, in the Federation of Bosnia, Karton Revolucija organized a public forum to discuss new mines in the region. This event is unusual because environmental activists and citizens from Republika Srpska also attended the forum. In an ethnically divided country, such collaborations are not common. However, the prospect of new mines united divided communities. The event even got three speakers from Serbia. One of them was the leader of the political party Ecological Uprising, Aleksadar Jovanović Ćuta, who also spoke about the lithium mine in Serbia. 

“Now we are connected by a common story,” explains Selman, who hopes that environmentalists will win the fight for nature: “What’s great is that for the first time we saw that people can fight together for access to information, equally, honestly, without any nationalistic tensions, but simply fighting for our rivers, forests, air and what we breathe, what we eat and what we see. For our life. Which, really, is an incredible and maybe even positive thing about this fight. Because this is a fight with no divisions between Bosniaks, Serbs and Croats. This is an honest fight, so that we can all stay alive and breathe.”