Rio Tinto shelves Serbian lithium project

(Sharecast News) - London-listed mining giant Rio Tinto has shelved its massive Jadar lithium project in Serbia in a cost-cutting move as it focuses on other near-term opportunities. According to an internal memo seen by The Wall Street Journal, Rio Tinto said it would transition Jadar - the $2.4bn lithium project regarding as potentially one of the world's largest greenfield lithium projects - to "care and maintenance".

The company, whose new chief executive Simon Trott promised at his appointment in August to cut costs and streamline operations, said the decision was made "as part of our focus across the overall portfolio to simplify and prioritise near term opportunities".

Rio Tinto is one of the world's largest lithium producers, following the $6.7bn purchase of Acradium Lithium last year.

The miner still views Jadar as strategically important, previously saying that the scale and high-grade nature of deposits provides the potential to supply lithium into the electric vehicle value chain "for decades".

However, it has faced ongoing permit challenges with the Serbian government, along with backlash from the surrounding communities.

"Given the lack of progress in permitting, we are not in a position to sustain the same level of spend and resource allocation," this week's company memo said.

Trott is expected to outline the miner's strategic direction to shareholders at a scheduled capital markets day in London on 4 December.

Rio Tinto was trading 0.3% higher at 5,427p by 1226 GMT.