Serbia at a turning point in Europe’s critical raw materials strategy

Serbia has emerged as one of Europe’s most strategically significant destinations in the global race for [[PRRS_LINK_1]]. As the European Union accelerates its green and digital transitions, the country’s abundant mineral reserves—particularly lithium and copper—position it as a potential cornerstone of Europe’s industrial future. Yet the rapid expansion of the mining sector has also sparked intense debates over governance, environmental protection, and equitable economic development.

A policy brief published in March 2026 by the Balkans in Europe Policy Advisory Group (BiEPAG), supported by the European Fund for the Balkans (EFB), highlights Serbia as a central test case for balancing resource extraction with democratic accountability and sustainable development.  The study underscores that Serbia’s mining sector sits at the intersection of European industrial strategy, geopolitical competition, and EU enlargement policy.

As Europe seeks to secure its supply of critical minerals, Serbia stands at a pivotal crossroads—one that will determine not only its economic trajectory but also the credibility of the European Union’s Critical Raw Materials Act and enlargement agenda.

A strategic pillar of Europe’s Critical Raw Materials agenda

The European Union’s Critical Raw Materials Act (CRMA), adopted in 2024, aims to strengthen supply chain resilience by boosting domestic production and forging strategic partnerships with reliable international suppliers.  Serbia’s geological wealth and EU accession status make it a natural partner in this initiative.

Critical minerals such as lithium, copper, and rare earth elements are essential for electric vehicles, renewable energy systems, advanced electronics, and defence technologies. Serbia’s proximity to EU markets, combined with its significant resource base, gives it a competitive advantage over more distant suppliers.

The EU’s strategic partnership with Serbia on sustainable raw materials and battery value chains reflects this alignment of interests. However, the BiEPAG analysis warns that the success of such cooperation will depend on Serbia’s ability to strengthen governance, ensure transparency, and align regulatory frameworks with EU standards.

Serbia’s mineral wealth: A foundation for industrial transformation

Serbia’s mining sector has gained renewed attention due to its vast reserves of critical minerals. The country hosts significant deposits of lithium, copper, gold, silver, and zinc, with an estimated total value of approximately $200 billion. 

Among these resources, lithium holds particular importance. The Jadar Valley deposit—containing the unique mineral jadarite—represents one of the most significant lithium discoveries in Europe. If fully developed, it could transform Serbia into a key supplier for the continent’s electric vehicle and battery industries.

The Bor mining basin, revitalized through foreign investment, further strengthens Serbia’s strategic role. As one of Europe’s largest copper production centers, Bor contributes significantly to regional supply chains and industrial output.

These resources position Serbia as a critical link in Europe’s transition toward a low-carbon economy, enabling the production of batteries, renewable energy technologies, and advanced manufacturing components.

The Jadar lithium project: Promise and controversy

At the center of Serbia’s mining narrative lies the proposed Jadar lithium project. Recognized as a strategic initiative under the CRMA, the project has the potential to produce up to 58,000 tonnes of lithium carbonate annually, supplying a substantial share of Europe’s battery-grade lithium. 

The project has attracted international attention due to its economic significance and geopolitical implications. However, it has also triggered widespread public opposition, reflecting concerns over environmental risks, land use, and transparency in decision-making.

Originally halted in 2022 following mass protests, the project’s regulatory trajectory has remained uncertain. Although placed under care and maintenance in 2025, it continues to symbolize both Serbia’s economic potential and the governance challenges associated with large-scale resource extraction.

The controversy surrounding Jadar highlights broader questions about sustainable development, public trust, and the role of democratic institutions in shaping strategic industrial projects.

Copper dominance: The transformation of Bor

While lithium has captured global headlines, Serbia’s copper sector has already undergone a profound transformation. The Bor mining complex, revitalized through significant foreign investment, has become one of Europe’s most important copper production hubs.

Chinese investments, particularly through Zijin Mining, have modernized operations, increased production capacity, and contributed to export growth. These investments have also positioned Serbia as a key supplier to European manufacturing industries.

However, the expansion of mining activities has raised environmental and social concerns. Reports of air and water pollution, deforestation, and public health risks underscore the importance of robust regulatory oversight and environmental governance.

The Bor case illustrates both the economic benefits and environmental challenges of large-scale mining, reinforcing the need for balanced and transparent resource management.

Economic impact: High returns, limited structural transformation

Despite its strategic importance, the mining sector’s overall macroeconomic contribution to Serbia remains relatively modest. According to the BiEPAG analysis, mining accounts for approximately 3% of the country’s GDP. 

Employment in the sector is limited, with around 38,000 workers, reflecting its capital-intensive nature.  While wages in mining are typically higher than national averages, the industry’s capacity to generate widespread employment remains constrained.

Foreign direct investment plays a crucial role in Serbia’s mining expansion. In 2024, mining accounted for approximately 28% of total FDI inflows, driven primarily by investments in copper and gold operations. 

At the firm level, profitability is significant. Mining companies generated substantial net profits, often surpassing wage payments and tax contributions. This imbalance highlights the need for more equitable fiscal regimes and stronger mechanisms to ensure that resource wealth benefits the broader economy.

Governance and regulatory challenges

The BiEPAG policy brief identifies governance weaknesses as one of the primary challenges facing Serbia’s mining sector.  These include 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. However, gaps in environmental impact assessment procedures and incomplete alignment with EU directives remain areas of concern.

Institutional capacity and regulatory coherence will be critical to ensuring sustainable mining practices. Without robust oversight, the sector risks undermining public trust and hindering Serbia’s EU accession process.

Environmental concerns and public mobilization

Environmental activism has emerged as a defining feature of Serbia’s mining landscape. Protests against lithium extraction have mobilized citizens across dozens of cities, reflecting widespread concerns over environmental degradation and governance transparency. 

These movements highlight the importance of public participation and environmental protection in shaping resource development. They also underscore the concept of a “social license to operate,” which has become essential for the success of large-scale mining projects.

Far from representing an obstacle to progress, civic engagement has contributed to strengthening democratic institutions and promoting accountability.

Authoritarian extractivism: A structural governance risk

A central concept introduced in the BiEPAG analysis is “authoritarian extractivism.”  This term describes a governance model in which political elites centralize decision-making, weaken democratic oversight, and prioritize resource extraction for economic or political gain.

In Serbia, this dynamic has manifested in debates over regulatory transparency, public consultation, and institutional independence. Addressing these challenges will be essential to ensuring that mining contributes to sustainable development rather than reinforcing governance vulnerabilities.

EU integration and strategic partnerships

Serbia’s mining sector is closely intertwined with its European integration ambitions. The EU has signed a Memorandum of Understanding with Serbia on sustainable raw materials and battery value chains, reinforcing the country’s strategic importance. 

Aligning national legislation with EU environmental and governance standards will be essential for securing investor confidence and advancing accession negotiations. Successful implementation of these reforms could transform Serbia into a reliable supplier of critical minerals and a key partner in Europe’s green transition.

Strategic outlook: Serbia’s role in Europe’s energy transition

Serbia stands at the forefront of Europe’s quest for critical raw materials. Its lithium and copper resources offer a unique opportunity to support the continent’s industrial transformation while driving domestic economic growth.

However, the long-term success of the sector will depend on transparent governance, environmental sustainability, and equitable value distribution. Strengthening institutional capacity, enhancing regulatory oversight, and ensuring public participation will be essential to realizing the full potential of Serbia’s mineral wealth.

As Europe seeks to secure its strategic autonomy, Serbia’s mining sector represents both an opportunity and a responsibility. Managed effectively, it can serve as a model for sustainable resource governance and a catalyst for regional development. Mismanaged, it risks undermining public trust and slowing the country’s path toward European integration.

In this context, Serbia’s approach to mining will shape not only its own economic future but also Europe’s broader transition toward a secure, sustainable, and resilient industrial economy.