Serbia is expected to sign a memorandum of understanding with the European Union to create a strategic partnership on raw materials, battery value chains, and electric vehicles on July 19.

The memorandum, which will be signed in Belgrade during a visit by German Chancellor Olaf Scholz and European Commissioner Marcos Sefcovic, is a demonstration of Serbia’s geopolitical alignment. At a time when the country is also being courted by Russia, China and the Gulf States, it has chosen to sell its lithium to Europe.

President Aleksandar Vucic confirmed that Chinese carmakers had shown interest in Serbia’s lithium, but stated, “We told them that we are discussing the issue with the Europeans. We are loyal to Europe... The EU needs lithium and we want to strengthen our connection with the EU,” the Financial Times reported on July 18.

The signing of a memorandum with the EU follows the government’s recent decision to reapprove Rio Tinto’s controversial lithium project in the Jadar Valley, western Serbia, on July 16. The project, which was initially halted two years ago due to mass protests, has been revived with EU backing.

The Jadar mine holds significant lithium reserves and is expected to produce up tp 58,000 tonnes of lithium annually starting in 2028. This production could support 17% of Europe’s electric vehicle production, equating to approximately 1.1mn cars.

The memorandum builds on initial letters of intent signed in September 2023 by Sefcovic and then Serbian minister of foreign affairs Ivica Dacic. The memorandum aims to establish a preliminary agreement on future collaboration between the EU and Serbia in strategic raw materials and supply sectors, including lithium mining and battery manufacturing. 

While the document's full content has not been disclosed to the public, it outlines five key areas of action: industrial cooperation, research and innovation collaboration, implementation of high environmental, social, and governance standards, mobilisation of financial and investment instruments according to EU standards, and development of necessary human resources.

In light of recent accusations by former Nato commander Wesley Clark and others that Serbia is a "Russian proxy," the lithium story is a reminder of Serbia's international allegiances and its commitment to its EU membership path.