How much money would be left in Serbia from "100 dinars Rio Tinto"?

These days the government in Serbia is working in full swing. In almost all cities there were protests due to the government's decision to support the mining of lithium by the world company "Rio Tinto", a raw material for the production of batteries for electric vehicles, writes Serbian "Danas".

On the one hand, the government claims that mining would lead to an almost unprecedented boom in the overall economy, while avoiding to mention the other side of the activity, the great potential risk to the environment, i.e. the destruction of air, water and soil, which the other side warns about , above all environmental organizations in Serbia.

It is interesting that none of the parties in this dispute emphasized the basic question: whether this mining has its economic justification at all.

Namely, the real question is: who really has a real interest and benefit from such a business venture?

The company takes that profit out of Serbia and directs it to investment projects in other countries where it can bring a higher return to the owner. In addition, through optimization, the foreign owner will reduce the tax liability in Serbia to about 5 percent, plus he will pay the so-called mineral rent for the next 5 percent. The rest of about thirty dinars will be paid to the employees. So, all in all, only twenty-five dinars will remain in Serbia out of a total of one hundred dinars, so the profit for the state and society is minimal.

This scenario is characteristic of African countries, which are rich in natural resources. We know that none of them got rich or developed on the basis of such projects, says the article in the media.

There are two other, incomparably more favorable scenarios for Serbia, but they are almost impossible in the current situation.

The first such case consists in the fact that the entire project would be realized by a Serbian company.

Another, similar, favorable scenario would be: to produce lithium ore in Serbia, to process it at home, to produce batteries and finally to incorporate them into the production of electric cars in Serbia.

We do not hear such good news from the government of Serbia, nor from "Rio Tinto", nor from the governments of Germany and France, nor from the EU, the text says.

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