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German Chancellor Olaf Scholz defended a planned Lithium deal with Serbia and said that the mining project will not have a negative effect on the region’s environment.

People cannot complain that mining of certain minerals is restricted to a few countries — “among them a very big country in the East” — and at the same time oppose new mining projects in Europe, Scholz told reporters on Thursday. The mining would be carried out in a way that won’t create “substantial damage to the environment,” Scholz added.

He spoke on the sidelines of a meeting of the European Political Community at Blenheim Palace, 60 miles north of London. Afterward, he flew directly from nearby Oxford airport to Belgrade, where he’ll meet Serbian President Aleksandar Vucic Friday morning. Executives from the Mercedes-Benz Group AG and Stellantis NV will also be present.

Scholz, Vucic and the two carmakers plan to sign letters of intent aimed at developing Serbia’s lithium-processing and electric-vehicle battery industry. Mercedes-Benz and Stellantis are currently in discussions with Serbia’s government to invest in the country, potentially adding fresh support for what may become Europe’s biggest lithium mine.

The carmakers, which are already partners in a battery joint venture, are willing to follow Rio Tinto Group’s investment in the proposed $2.4 billion mine in Serbia by developing processing and EV battery output. Rio’s Jadar mine was blocked by Serbia two years ago following mass protests triggered by ecological concerns.

Creating a broader lithium industry — rather than just exporting the raw material — has been a key demand of the Serbian government in backing the Jadar project as it seeks to capture value from its natural resources.

(By Arne Delfs)