Serbians don't want mines – Are Europe's battery supply chains at risk? BYD, BMW and European Lithium

Good market opportunities, but Serbians agree: "There will be no digging here."

Batteries for electric vehicles are a growth area. According to Deloitte estimates, the market for electric vehicle batteries in Europe is likely to triple to around EUR 54 billion by 2030. Today, 70% of all batteries come from China, with only around 13% of production coming from Europe. And even on the European continent, Asian manufacturers dominate. In this way, Europe is giving away large parts of the value chain – the battery is the most expensive component in electric vehicles and also represents the most important difference for many customers in terms of technology. This is another reason why the then German Chancellor courted Serbia in July 2024 – the lithium deposits there were to become part of European supply chains. Serbia's government also supported the plan and intended to refine the raw material domestically.

But even then, protests were mounting. And they continue to this day. As the FAZ writes, almost all population groups in Serbia reject mining. This includes hipsters from Belgrade as well as farmers from the countryside, all of whom are concerned about being taken advantage of by wealthy Europe. Although observers within Serbia agree that all parties involved in mining projects with appropriate environmental regulations would benefit, this message is not getting through. The focus is therefore shifting to projects that have already been approved. These include the Austrian Wolfsberg mine, which is scheduled to go into production in 2027. Years ago, operator European Lithium announced that all the necessary permits for the start of production had been obtained. With BMW, it even has a potential customer that has contributed capital.

European Lithium: Approved Wolfsberg mine comes into focus

The Wolfsberg project in Carinthia is set to become more than just a mine. A preliminary feasibility study envisages two operational units – underground mining for the extraction of spodumene concentrate and a hydrometallurgical plant for the production of battery carbon and lithium hydroxide. As a new environmental impact assessment was not necessary, Wolfsberg is effectively considered Europe's first lithium mine. And European Lithium's plans go even further: the raw materials are to be shipped to Saudi Arabia and refined there in collaboration with a local partner, thanks to cheap solar energy. They will then be made available to the planned European battery factories.
The total volume involved is 8,800 tons of lithium hydroxide monohydrate per year. According to the US Geological Survey, the global supply in 2024 totaled 240,000 tons of the raw material.

With the construction of a mine in Serbia becoming increasingly unlikely and the mood in neighboring Bosnia, where lithium deposits also lie dormant, anything but mining-friendly, battery manufacturers and automakers are under pressure to act. Even Chinese auto giant BYD, which traditionally covers large parts of the value chain, is looking to Europe. New plants are planned in Hungary and Turkey. BYD Vice President Stella Li recently announced at the IAA motor show that within "two to three years," all electric vehicles built for Europe will be produced locally in order to avoid EU import duties. The supply of lithium could therefore also become a bottleneck for BYD.

Mini-valuation + rare earth fantasy: What is in store for European Lithium's stock?

Although European Lithium's stock has recently gained significantly, it is still trading around 10% below its level of three years ago. Analysts, including First Berlin, see upside potential of 100% or more. With a market capitalization of less than EUR 80 million, the stock is at least worth considering – an approved lithium project in the heart of Europe should be valuable in itself, especially given the headwinds for mines in other countries. European Lithium's indirect stake in the promising Tanbreez rare earth project in Greenland provides additional appeal.