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Le Monde Diplomatique: Lithium from BiH a Strategic Interest for EU, What Role Does Schmidt Play in It?

The European Union has a significant strategic interest in Bosnia and Herzegovina due to its large deposits of minerals and metals that could support the EU’s “green” transition. However, international companies are exploiting the country’s complex state structure to extract these materials, harming the local population and environment, writes Le Monde Diplomatique, as reported by N1 Sarajevo.

The article notes that the lithium excavation project in Republika Srpska came “just in time,” given the financial difficulties of this entity. However, considering the unresolved issue of state property, these companies operate on “legally uncertain ground.”

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The article begins with a conversation with Adrijana Pekić from the association “Guardians of Majevica.” It describes the “idyllic” landscape that Pekić fears could disappear. Geological surveys have revealed valuable minerals and metals in the area.

In the fall of 2022, it was discovered that the Swiss company Arcore AG had found large deposits of lithium, as well as magnesium, potassium, and boron, during secret test drilling on Mount Majevica.

EU’s Strategic Interest

Majevica, a mountain area with a peak reaching 916 meters, is predominantly covered with deciduous trees and home to numerous animal species. Le Monde Diplomatique explains that minerals from this area are strategically important resources for which the European Union aims to reduce its dependence on third countries, particularly China, which possesses the largest global reserves of rare earth metals and is the largest exporter of lithium, primarily mined from Latin American salt lakes.

As a global leader, the EU aims to transition from fossil fuels to renewable energy sources by 2050. However, building electric vehicles, chargers, wind turbines, and photovoltaic systems still requires raw materials such as lead, boron, copper, cobalt, nickel, zinc, and lithium.

Arcore AG plans to participate in this process. In a November 2023 press release, the company announced a strategic partnership with the Canadian-German company Rock Tech Lithium, specializing in lithium hydroxide production and building a conversion plant in Guben, Brandenburg. In this refinery, Arcore’s lithium will be converted into lithium hydroxide, necessary for producing automotive batteries.

This is considered one of the key projects of Germany’s energy and transportation transition. To build the Brandenburg plant, Rock Tech Lithium requested 200 million euros from federal and state budgets. However, a decision on this has yet to be made, writes Le Monde Diplomatique.

The article adds that Mercedes-Benz is reportedly ready to buy potassium hydroxide from the planned Rock Tech Lithium refinery and produce up to 150,000 car batteries annually. This is a two-billion-dollar deal that significantly attracts industry attention.

Rock Tech Lithium presents itself as a clean technology company, primarily sourcing raw materials from Canadian mines. However, it could take several years before lithium from abroad reaches Guben.

Thus, Arcore AG appeared, offering to bring the valuable material from a closer location. All this is supposedly to be conducted according to the strictest standards, transparently, sustainably, and responsibly—socially and environmentally—along the entire production chain, including in Lopare.

However, Pekić believes that “it is not worth the paper it is written on.” She states that there is no transparency and that the population only recently learned from the media about the test drillings. She also claims that laws are not being respected.

“Only the profit of a few individuals matters here,” she said.

Le Monde Diplomatique contacted Matthias Schmid, Chairman of the Board of Arcore AG, but he was unwilling to give an interview, responding only via email. Schmid stated that it is possible to conduct environmentally and socially acceptable mining activities in Bosnia and Herzegovina, and that the entire project is being carried out according to the regulations and laws of local authorities and the state of Bosnia and Herzegovina.

When asked how this would be done in one of the most corrupt countries in Europe under a regime on the US sanctions list, Schmid did not respond, adds Le Monde Diplomatique. The article also inquired with Rado Savić, mayor of Lopare, whether a permit had been issued for Arcore Investments, a subsidiary of Arcore AG based in Banja Luka, for exploratory drillings in his municipality.

“Never! They never submitted requests. That company never involved us in its plans in any way,” he replied angrily. Savić explained that decisions are made elsewhere.

“One person decides everything in RS”

“In Republika Srpska, especially one person dictates everything: RS President Milorad Dodik,” writes Le Monde Diplomatique, noting that he has ruled this part of Bosnia and Herzegovina for 18 years. It adds that Dodik supports Russia’s war in Ukraine, denies the genocide in Srebrenica, and has amassed enormous private wealth while leading his party, the Alliance of Independent Social Democrats (SNSD).

Further emphasizes that Dodik has repeatedly threatened to secede the RS entity from BiH, which could provoke an open war.

“A look at the war in Bosnia between 1992 and 1995 shows what catastrophic consequences such a conflict can have. Therefore, it is clear what kind of abyss Dodik’s policy could lead to,” states the French newspaper.

It further notes that Germany halted four infrastructure projects in RS worth 105 million euros last year due to Dodik’s policies, and that the United States had imposed sanctions on him and his closest associates several years ago. Last March, Washington tightened this approach once again: the Office of Foreign Assets Control (OFAC) placed Dodik and his followers on the list of sanctioned persons, resulting in the closure of all their private and business accounts in Bosnia and Herzegovina.

“The lithium business in Lopare comes as a godsend, as any investment would benefit RS. And this project promises millions in profits,” writes Le Monde Diplomatique.

It further notes that Petar Đokić, Dodik’s Minister of Industry, Mining, and Energy and his long-time associate, “has also been involved in numerous corruption scandals.”

Namely, in 2007, Đokić was sentenced to three months in prison for defrauding Telekom RS. The French newspaper also notes that in 2020, prosecutors tried to bring him to justice for numerous violations of environmental protection regulations. “Over six years, he allowed the construction of small hydroelectric power plants without considering legal provisions. The result was destroyed riverbeds, cut forest areas, and reduced local water supply,” the text adds.

“And these, it should be noted, are the representatives of the country where the project in Lopare is supposed to be implemented according to the legal regulations of Republika Srpska and Bosnia and Herzegovina, as stated by the CEO of Arcore, Matthias Schmid,” Le Monde Diplomatique points out.

“People fear for their existence”

According to Arcore’s estimates, in the planned mining area on Mount Majevica, over an area of about 25 square kilometers, there are 1.5 million tons of lithium carbonate, 14 million tons of boric acid, 35 million tons of potassium, and 94 million tons of magnesium sulfate. According to Arcore’s plans, these mineral deposits are to be exploited by surface mining over 50 years.

When the residents of Lopare learned about these plans in September 2023, a local resistance movement quickly organized, involving about 13,000 residents. At a citizens’ meeting in late February, local politicians promised that a lithium mine would not be opened there. Together with the municipality of Čelić, located 20 kilometers southeast of Majevica in the Federation of Bosnia and Herzegovina entity, residents compiled a petition against the mining project and submitted it to the National Assembly of RS.

Dodik commented on this resistance, stating that the project would represent a great opportunity for the entire region, creating jobs and posing no threat to the environment. “Well, if Dodik says so, then it must be true,” said Admir Hrustanović, the mayor of Čelić, sarcastically.

“People here really fear for their existence. They are afraid that toxic substances from the lithium mine will be released into the Šibošnica River via the Gnjica River, which runs through Mount Majevica, thus endangering our community’s water supply. All our agricultural land would be at risk,” he said.

Le Monde Diplomatique writes that it is no wonder people are upset, noting that for months, the media have been reporting on the massive environmental destruction caused by a mine in the small town of Vareš, in the Federation of BiH entity. Here, the British corporation Adriatic Metals secured mining rights and is extracting silver, gold, lead, zinc, copper, and antimony ores. It is estimated that there are 22.5 million tons of metals there, in which the EU also has a strategic interest.

It further notes that residents of the area complain about excessively high concentrations of heavy metals in drinking water and the massive destruction of the environment due to deforestation. “We don’t want that here,” says Hrustanović, believing that residents will certainly rebel, even though they know how powerful their opponents are. “If necessary, we will block the transport routes for lithium through our municipality,” he said.

Hrustanović noted that there are completely different plans for the entire Majevica region. The French newspaper explains that two predominantly Serbian and three predominantly Bosniak municipalities, which once clashed, have been working together for four years on the “Via Majevica” project. The plan is to completely demined the area to open it up for tourism. Bicycle and hiking trails are planned. The project is also supported by the German Bundestag with nine million euros.

“On the one hand, we receive support from EU countries to preserve the untouched environment, while on the other hand, the EU has an interest in simultaneously conducting mining activities in the same place. That is contradictory,” says Hrustanović.

“Foreign companies operate on legally uncertain ground”

Le Monde Diplomatique notes that in today’s Bosnia and Herzegovina, however, this is not the only paradox, adding that “the complex post-war structure in this small country of almost 3.4 million inhabitants is full of paradoxes.”

“For a company like Arcore, however, this is actually beneficial,” it emphasizes.

It further explains the structure of BiH established by the Dayton Peace Agreement, whereby the entities have a high degree of autonomy. To ensure both sides adhere to the peace agreement, the position of the High Representative was created, who has broad powers and can enact laws and regulations that everyone must follow.

Since August 2021, this duty has been held by CSU politician Christian Schmidt. This German national bears great responsibility and, as noted by Le Monde Diplomatique, “plays a crucial role in the allocation of rights to exploit mineral resources.”

“Since the end of the war in BiH, there has been a dispute over who owns the land in the country: the entities or the entire state? As the successor of the socialist Yugoslav republic of Bosnia and Herzegovina, the state recognized in 1992 is the owner of the land. However, the Dayton Agreement does not explicitly regulate which state levels can manage the land and how,” states Le Monde Diplomatique, adding that particularly the RS entity insists that the land in its territory belongs to that entity.

It is explained that in 2005, former High Representative Paddy Ashdown issued a temporary ban on the direct or indirect disposal of state property until a final agreement is reached, a decision that Dodik continues to ignore, repeating threats of secession if the issue of land ownership is resolved in a way that does not suit him.

“Therefore, foreign companies operate on legally uncertain ground,” writes the French newspaper, noting that this is why the Federation of BiH government in November 2023 submitted a request for ownership rights to the High Representative, as they planned to grant a mining concession to Adriatic Metals in Vareš.

“Schmidt’s Controversial Interpretation”

The text assesses that Schmidt had a “very controversial” interpretation of his predecessor Ashdown’s decision. According to the High Representative, if the government temporarily grants the use of land and property to a company, the issue of ownership is not affected.

“This would legally protect Arcore in RS as well. Because what is legal in the Federation can be acceptable in Republika Srpska,” writes Le Monde Diplomatique.

“An interesting detail is that CDU Bundestag member and lawyer Peter Beyer joined Arcore’s board in April 2023. Beyer has been involved in the political affairs of the Western Balkans for years and is a member of the Executive Board of the German Atlantic Association, whose president is Christian Schmidt. So, they know each other,” it highlights.

It adds that Beyer did not want to respond to inquiries on this topic.

“Politically, Mr. Beyer’s engagement leaves a bitter taste, as his friend Christian Schmidt simultaneously plays a key role in the legal frameworks of mining projects,” commented expert Bodo Weber from the Democratization Policy Council.

And expert Muharem Cero, who was responsible for creating the property registry in the post-war years and has been dealing with this topic for years, explains that the “consequences of decisions about mining in this country are much broader than elsewhere.”

He states that the war in BiH was also about land.

“Nationalist Serbian parties expelled all non-Serbs from today’s RS territory to create an ethnically pure state, whose land would be exclusively Serbian property,” he notes, adding that these parties continued such policies in RS even after 1995.

“In this way, the entire state of Bosnia and Herzegovina would be destroyed,” he emphasizes.

Cero considers Schmidt’s approach to the issue of land use a “shallow fabrication.”

“Mere land use means that the user must return the land to the owner in the same condition in which they received it. In Vareš, it is state forest that was declared as such during the Yugoslav era,” Cero explains.

“However, Adriatic Metals is cutting down trees and extracting resources from the land. This is not temporary land use. Here, the mode of using public goods is being changed, which touches on ownership issues that only the central state can decide on,” he emphasizes.

Therefore, Schmidt’s decision is also being challenged before the Constitutional Court of Bosnia and Herzegovina. Because changing the purpose of state property cannot be the decision of any entity.

It remains unclear when a ruling on this issue will be made. The text explains that, under Dodik’s pressure, one of the judges from RS resigned, and Dodik is blocking the appointment of further judges from the entity.

“These circumstances, of course, are known to both corporations and the High Representative,” states Le Monde Diplomatique.

“Western States Believe Their Green Transformation Is More Valuable Than Our Lives”

In Tuzla, the Lopare project is also a highly topical issue. The university town is located on the southwestern foothills of Mount Majevica in the territory of the Federation of BiH. Tihomir Knežiček teaches geology and mining here.

“Without mining and salt exploitation, this city would not exist,” he says, emphasizing that mining in his city has provided people with jobs and prosperity, adding, “how could I be against such projects?”

Knežiček explains how environmentally friendly exploitation could be carried out, stating that closed systems should be built to prevent contamination of water and the surrounding area.

“However, these technologies are very expensive. And, of course, the worst-case scenario would be if the mining company simply released water into the ground,” he states.

In neighboring Serbia, the Australian-British mining company Rio Tinto discovered a lithium deposit near Loznica a few years ago. According to geologists, it is the same ore as in Lopare.

In Serbia, Western embassies pressured the government to enable lithium exploitation. However, the project faced strong opposition from citizens. There were massive protests, and “autocratic President Aleksandar Vučić eventually had to stop the project,” writes Le Monde Diplomatique.

Just a few streets away from the faculty in Tuzla is the office of the “Carton Revolution,” a non-governmental organization fighting against corruption in the country.

“A lithium mine threatens us in the immediate vicinity of a populated area. Around 400,000 people live in the Majevica area,” said Adi Selman from this organization.

“I especially cannot understand that Western countries apparently believe their green transformation is more valuable than our lives and our nature here,” he says.

He notes that international corporations can so easily pursue their interests in BiH precisely because there is no significant awareness of this issue among the population.

Selman believes that politicians encourage nationalism among ethnic groups to divert attention from their corrupt dealings.

“Secession, genocide, these are all topics used to hide the true reasons for their actions and intentions,” Selman believes.

“For international corporations, BiH is therefore an ideal place to obtain mineral wealth as cheaply as possible,” writes Le Monde Diplomatique.

Currently, Rock Tech Lithium states that an agreement on supply has been reached with the Chinese company C&D Logistics starting in 2025. This would ensure access to essential raw materials for the plant in Guben. However, it remains unclear exactly where the lithium will come from.

Mercedes-Benz has meanwhile distanced itself from the mining project in Lopare. They have stated in writing that there are no connections between the exploitation plans and the corporation’s relationship with Rock Tech Lithium.

The French newspaper notes that Adriana Pekić only mildly smiled when she heard this news and showed a letter she received from Arcore Investment’s lawyers, threatening her with a defamation lawsuit.

“They claim I am harming their business and that I could be sued for damages,” she said.

Le Monde Diplomatique writes that Dodik’s party intended to pass a foreign agents law, similar to the Russian law Putin uses to suppress opposition and free press.

“It is becoming increasingly difficult for us to fight against the lithium project; that really scares me,” says Pekić.

“But I cannot give up,” she added.

Source : N1

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