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Key Points
- Rio Tinto shares are sliding following Serbian government's verdict on lithium exploration licences
- The Serbian Prime Minister sides with environmentalists
- Rio Tinto is now looking at a range of legal avenues
The Rio Tinto Ltd (ASX: RIO) share price is hovering in negative territory today following a broader market selloff.
At the time of writing, the mining giant's shares are swapping hands for $107.58, down 1.05%.
In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 0.56% to 7,135.5 points. This means that the benchmark index has fallen almost 4% since this time last week.
Serbian government revokes lithium exploration licences
Relations between Australia and Serbia have gotten frostier following the prolonged Novak Djokovic visa saga earlier this month.
According to several media outlets, the Balkan nation of Serbia has decided to revoke Rio Tinto's lithium exploration licences.
The announcement comes as the Serbian government sides with protestors who have raised concerns about the environmental impact of Rio Tinto's proposed lithium mine. It's claimed the development of the project will pollute land and water affecting valuable farmland.
Previously, the Serbian prime minister advised she would make a decision in April's general election as to whether Rio Tinto could proceed. However, it's speculated the treatment and deportation of Djokovic, a Serbian national hero, angered the European nation.
The Serbian government's verdict may also be used to boost popular support in the lead-up to the election after protesters strongly voiced their opposition to the lithium project.
For several weekends, thousands of demonstrators in the capital Belgrade and other towns blocked main roads and bridges in protest.
During a televised address to the nation, Serbian Prime Minister Ana Brnabic said:
We have fulfilled all the requests of the environmental protests and put an end to Rio Tinto in the Republic of Serbia.
Everything is finished. It's over.
In response, Rio Tinto noted that it was extremely concerned by the Serbian prime minister's statement and is reviewing its legal options.
The project, if approved, would have become the largest lithium mine in Europe and one of the biggest in the world.
Experts estimated the mine to have a 40-year life, producing 2.3 million tonnes of lithium carbonate per year.
Rio Tinto had planned to invest up to $2.4 billion in the construction and development of the lithium mine.
Rio Tinto share price summary
Despite travelling higher in 2022, it has been a disappointing 12 months for Rio Tinto shareholders. The Rio Tino share price has lost around 9.3% in value since this time last year.
Based on today's price, Rio Tinto has a market capitalisation of $40 billion with approximately 371 million shares outstanding.
