Serbia’s critical minerals push tests Europe’s green supply strategy and governance standards

Serbia is moving to the front of Europe’s search for critical raw materials, positioning its mineral reserves—especially lithium and copper—as potential inputs for electric vehicles, renewable energy systems and advanced electronics. Yet the same momentum that makes Serbia attractive to investors also raises pressing questions about governance, environmental protection and whether democratic accountability can keep pace with extraction.

A March 2026 policy brief by the Balkans in Europe Policy Advisory Group (BiEPAG), supported by the European Fund for the Balkans (EFB), frames Serbia as a “test case” for balancing resource development with sustainable growth and democratic oversight. The analysis places Serbia at the intersection of European industrial strategy, geopolitical competition and EU enlargement policy—meaning outcomes in Serbia could influence both investor confidence and the credibility of EU plans for critical minerals.

Europe’s Critical Raw Materials Act meets a Balkan supplier

The EU’s Critical Raw Materials Act (CRMA), adopted in 2024, is designed to strengthen supply chain resilience by increasing domestic production and building strategic partnerships with reliable international suppliers. Serbia’s geological endowment and its EU accession trajectory make it a natural candidate for cooperation under this framework.

The BiEPAG brief notes that critical minerals such as lithium, copper and rare earth elements are central to technologies spanning batteries, renewable energy systems and defence. Serbia’s proximity to EU markets adds commercial appeal compared with more distant suppliers. Still, the brief cautions that partnership success will depend on whether Serbia can improve governance, ensure transparency and align regulatory frameworks with EU standards.

Lithium promise—and political friction—around Jadar

Serbia hosts deposits of lithium, copper, gold, silver and zinc, with an estimated total value of about $200 billion. Lithium is highlighted as particularly important: the Jadar Valley deposit contains jadarite, described as one of Europe’s most significant lithium discoveries. If developed fully, it could position Serbia as a key supplier to Europe’s electric vehicle and battery industries.

At the center of this narrative is the proposed Jadar lithium project. Recognized as a strategic initiative under the CRMA, it has been cited as having potential output of up to 58,000 tonnes of lithium carbonate annually—targeting battery-grade demand. But public opposition has been widespread. The project was halted in 2022 after mass protests and placed under care and maintenance in 2025; despite that status change, it continues to symbolize both economic opportunity and governance challenges tied to large-scale extraction.

Copper already transformed Bor through foreign investment

While lithium draws global attention, Serbia’s copper sector has already undergone major change. The Bor mining basin has been revitalized through foreign investment and is described as one of Europe’s most important copper production hubs.

Chinese investment—particularly via Zijin Mining—is credited with modernizing operations, increasing production capacity and supporting export growth. This has helped strengthen Serbia’s role in supplying European manufacturing industries.

However, expansion has also brought environmental and social concerns. Reports cited in the brief include air and water pollution risks, deforestation pressures and public health worries—issues that underscore why regulatory oversight remains central to maintaining public trust alongside industrial scaling.

Strategic importance doesn’t automatically mean broad-based gains

Despite its role in Europe’s critical minerals agenda, mining’s macroeconomic footprint in Serbia remains limited. The BiEPAG analysis estimates mining at roughly 3% of GDP. Employment is also relatively constrained for a sector attracting large capital flows: around 38,000 workers are reported.

Foreign direct investment is described as crucial to expansion. In 2024, mining accounted for about 28% of total FDI inflows, driven primarily by investments linked to copper and gold operations.

At company level profitability appears strong: mining companies generated substantial net profits that often exceed wage payments and tax contributions. That imbalance points to a core concern raised by the brief—whether fiscal arrangements allow resource wealth to translate into wider economic benefits rather than concentrating gains within firms.

Governance gaps are at the heart of investor risk

The policy brief identifies governance weaknesses as a primary challenge for Serbia’s mining sector. It cites regulatory inconsistencies, limited enforcement of environmental standards and insufficient transparency in concession agreements.

Serbia’s Law on Mining and Geological Explorations provides the legal framework for resource development, but gaps remain—particularly around environmental impact assessment procedures—and there is incomplete alignment with EU directives. The brief argues that institutional capacity and regulatory coherence will be decisive for sustainable mining practices; without stronger oversight, it warns that public trust could erode while progress toward EU accession could be hindered.

Civic mobilization shapes “social license”

Environmental activism is portrayed as a defining feature of Serbia’s mining landscape. Protests against lithium extraction have mobilized citizens across dozens of cities, reflecting concerns over environmental degradation alongside worries about transparency in decision-making.

The brief links these dynamics to the concept of a “social license to operate,” suggesting that public participation is not merely an obstacle but an ingredient for long-term project viability. It also argues civic engagement has contributed to strengthening democratic institutions and promoting accountability.

A structural risk: “authoritarian extractivism”

A key term introduced by BiEPAG is “authoritarian extractivism,” describing a governance model where political elites centralize decisions, weaken democratic oversight and prioritize extraction for economic or political gain. In Serbia, this dynamic is said to surface through debates over regulatory transparency, public consultation practices and institutional independence.

The brief concludes that addressing these issues will be essential if mining is meant to support sustainable development rather than deepen governance vulnerabilities.

EU integration hinges on aligning rules—and expectations

Serbia’s mining sector is closely tied to its European integration ambitions. The EU has signed a Memorandum of Understanding with Serbia on sustainable raw materials and battery value chains—reinforcing Serbia’s strategic relevance within Europe’s green transition plans.

The BiEPAG analysis emphasizes that aligning national legislation with EU environmental and governance standards will be necessary both for investor confidence and for advancing accession negotiations. If reforms are implemented effectively, it argues Serbia could become a more reliable supplier of critical minerals while strengthening its role as a partner in Europe’s transition away from high-carbon industrial pathways.

A crossroads for Europe—and for how extractive wealth is governed

Serbia sits at the forefront of Europe’s effort to secure critical raw materials through domestic development abroad rather than relying solely on distant sources. Its lithium potential around Jadar Valley alongside Bor’s established copper output offers clear industrial upside—but only if long-term performance matches investor expectations on transparency, environmental sustainability and equitable distribution of value.

The BiEPAG brief frames this moment as both an opportunity and a responsibility: managed effectively, Serbia could serve as an example of sustainable resource governance supporting regional development; mismanaged outcomes risk undermining public trust while slowing progress toward European integration.