Town in western Serbia scraps plan for lithium mine project

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BELGRADE, Dec 16 (Reuters) - The authorities in Serbia's western town of Loznica said on Thursday it was scrapping a plan adopted this year to open a lithium mine in the area after opposition from activists, although the developer said it had not given up on the project.

Mining giant Rio Tinto (RIO.L) wants to develop the mine near the town in the Jadar Valley to produce lithium, a vital ingredient to make batteries for electric vehicles.

The $2.4 billion project is part of government efforts to draw in investment and boost economic growth. But environmental groups in Serbia, which has been heavily scarred by industrial pollution, say the new mine will pollute land and water in area.

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Activists have staged protests in recent weeks and have blocked roads across the country, demanding the local authorities end the project and causing a headache for the ruling coalition ahead of elections in April.

Rio Tinto said on Thursday it would not abandon the plan.

"We are convinced that through dialogue ... all interested parties can reach an understanding about the real and long-term benefits that project Jadar can bring to our country," the company's Serbian unit said in a statement.

Prime Minister Ana Brnabic told reporters that opening the mine would depend on the outcome of an environmental study and require support from the people, after he promised to hold a vote on whether the project should go ahead.

Lithium is in high demand amid a global shift towards electric vehicles. Another expected product of the mine, borates, are used in solar panels and wind turbines.

Rio Tinto has said any development would meet all domestic and European Union environmental standards. Activists say it would cause irreparable damage.

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Reporting by Ivana Sekularac; Editing by Edmund Blair

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