Rio Tinto moves big Jadar lithium and boron deposit in Serbia to the front burner
Rio Tinto has upgraded the status of the big Jadar lithium and boron deposit in Serbia to that of its most likely growth project, revealing that if it gets approvals and the economics support it, it will start construction in 2020 and reach first production in 2023.
The announcement, made in Serbia on Monday night, makes Jadar (a potential top-three global lithium producer) the only unapproved medium-term growth project in Rio’s portfolio.
The supply it could bring to the market may be a concern for Australian lithium producers and hopefuls, whose shares have been running hot lately on expected growth in demand for lithium-ion batteries as intermittent renewable power and electric cars take more market share.
On Monday in Serbia, Rio signed a memorandum of understanding with the government to progress Jadar, 140km west of Belgrade, through the approvals process.
“Rio Tinto is expected to make its final investment decision and start construction in 2020,” the miner said.“First production, based on a new processing technology of Jadarite that the company has developed, is expected to commence in 2023, assuming that feasibility studies confirm viability and all necessary approvals are obtained.”
Jadarite is the unique mineral, containing lithium and boron, that Rio discovered in 2004 within the Jadar deposit.
Rio says the project has enough lithium to supply more than 10 per cent of global lithium demand.
Rio currently has two growth projects in construction, the Amrum bauxite mine in Queensland and the Oyu Tolgoi copper and gold underground mine in Mongolia. It is also developing the Silvergrass iron ore project, designed to sustain production rates.
But beyond this it has no medium-term growth projects it has said will go to the board for approval in the next five years, apart from, now, Jadar.
Rio’s departing chairman Jan du Plessis talked up Jadar at the company’s April annual general meeting in London, linking it to the new Ventures business that Rio has started under Energy and Minerals boss Bold Baatar.
“On Jadar, I think that what distinguishes us from some of our competitors ... is we have a group of people who are encouraged to think about the future in a different way,” Mr du Plessis said.
“What might be the products that people in the future would want to supply that we as a company can supply them with?” he said, adding Jadar fit the bill.
Hartleys head of research Trent Barnett said it was unclear the impact that Jadar could have on lithium prices and on the batch of ASX companies surfing the wave of growing battery demand.
“There is uncertainty as to how big lithium market demand will be, with forecasts ranging from 500,000 tonnes a year to well over 1 million,” Mr Barnett said, saying that if it was the higher end of the range, Jadar’s contribution could be needed.
He warned that if Rio developed Jadar chiefly for its boron, and lithium became a byproduct not dependent on prices, this could weigh on the lithium market if demand was not strong, although obviously not for several years given the indicative development time frame.
The project, on which Rio has so far spent $US90m, holds 21 million tonnes of borate resources and 2.5 million tonnes of lithium oxide resources.
Under current plans, Jadar will be an underground mine, with the opportunity for future expansion if demand warrants it.
Borates are building blocks for fibreglass, glass, ceramics, fertilisers, detergents, wood preservatives and other projects.
Until November last year, Jadar was under the watch of Mr Bold’s predecessor Alan Davies, who was sacked for unspecified reasons around his involvement in a payment to a consultant employed to deal with the Guinea Government that is now subject to corruption investigations.
Mr Davies this year took a board seat on ASX-listed Global Geoscience, which is developing the Rhyolite Ridge lithium-boron project in Nevada.
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