What Lies Beneath: Critical Raw Materials and the Public Good in the Western Balkans

The green transition has a material reality. Electric vehicles need batteries. Renewable energy infrastructure, electricity grids and digital technologies require large quantities of minerals and metals. Lithium, copper, nickel, cobalt and other critical raw materials have therefore become increasingly important to Europe’s efforts to decarbonise its economy while reducing strategic dependencies on external suppliers.

The EU’s Critical Raw Materials Act responds to precisely this challenge. It seeks to diversify supply, strengthen European capacities and develop more resilient value chains. In this context, the Western Balkans have attracted growing attention. All six countries possess deposits of minerals sought by the EU, while the region also has a long history of mining. Research suggests that closer partnerships could bring benefits beyond extraction itself, including modernised skills and technologies, stronger public oversight and new opportunities for economic development.[1]

The question, then, is not simply whether Europe needs these materials. It is how they are obtained, who participates in deciding where and how extraction happens, and how the benefits and risks are shared. This is where a debate about minerals becomes a debate about something much bigger: the public good.

A green transition that people can recognise as their own

Natural resources occupy a peculiar position in an economy. Companies may provide the capital, expertise and technology required to extract them, but the resources themselves are inseparable from the places in which they are found. A lithium deposit may lie beneath farmland. A copper deposit may be located near a source of drinking water. A mine operates within a municipality whose roads, public services, environment and local economy will live with its effects long after the initial investment decision has been made.

That relationship matters particularly in the Western Balkans, where some prospective mining areas already face environmental pressures, depopulation, limited economic opportunities or the effects of previous industrial activity. A successful green transition therefore cannot be measured only by how many tonnes of critical minerals ultimately enter European supply chains. It should also be measured by what remains behind.

Are stable jobs created? Do municipalities receive revenues that can be invested in schools, healthcare, infrastructure or environmental restoration? Are local businesses incorporated into new value chains? Do workers gain opportunities to develop new skills? And, crucially, do communities have enough information and influence to participate meaningfully in decisions about their own economic future? These are not arguments against investment. They are questions about the conditions under which investment creates lasting public value.

Indeed, there is considerable potential for critical-raw-material partnerships to contribute positively to the region. Investment could support technological modernisation, skills development and better public oversight, while deeper value chains could produce benefits extending beyond the life of an individual mine.[2]

But those outcomes are not automatic.

Four countries, different experiences

The experiences of Serbia, Bosnia and Herzegovina, Montenegro and North Macedonia demonstrate that there is no single Western Balkan mining story. In Serbia, the proposed Jadar lithium project illustrates both the strategic significance of critical raw materials and the importance of public trust. Jadarite, containing lithium and boron, was discovered in western Serbia in 2004. Estimates cited in the research suggest that planned production could potentially satisfy between 10 and 15 per cent of European lithium demand by 2030. In June 2025, the European Commission designated the Jadar project as a Strategic Project under the Critical Raw Materials Act.[3]

At the same time, the project has faced sustained local and national opposition. Environmental organisations, experts, civic actors and local communities have raised concerns about its environmental, health and socioeconomic implications. The project was halted by the Serbian government in 2022 before being revived following a Constitutional Court decision in 2024, illustrating how deeply questions surrounding mining can become intertwined with questions of governance, trust and participation.[4]  The Serbian experience therefore demonstrates something easily overlooked in discussions about strategic investment: formal approval does not automatically create social legitimacy.

Bosnia and Herzegovina poses a related but somewhat different question: how much of the value generated from natural resources remains in the communities from which those resources originate? Research conducted for FES identifies twelve critical-raw-material projects at different stages of development in Bosnia and Herzegovina, including projects around Vareš, Lopare and Kupres. Yet the analysis concludes that benefits to local communities remain limited, while concession fees and local reinvestment are comparatively small in relation to corporate returns. It also identifies shortcomings in transparency, oversight and community participation.[5]

This distinction matters. An investment can contribute to exports or headline economic indicators without necessarily generating an equivalent improvement in the long-term economic security of the place hosting it. This is why the debate about mining cannot end with the size of an investment. It also has to ask how revenues are distributed, whether local economies become more diverse and resilient, and whether communities retain meaningful benefits once extraction ends.

Montenegro illustrates yet another dimension of the challenge. Its critical-raw-material potential includes bauxite, baryte and several base and strategic metals. However, prospective mining areas frequently overlap with environmentally sensitive territory, including protected ecosystems, while regions such as Pljevlja and Mojkovac are already affected by the environmental legacy of previous industrial activity.[6]

Recent projects also illustrate the financial consequences of poorly managed conflict. The proposed Brskovo polymetallic mine near Mojkovac was cancelled in 2024 following sustained opposition and procedural controversies. The cancellation was subsequently followed by a EUR 300 million international arbitration claim. Meanwhile, a 2025 pollution incident at the Šuplja Stijena mine contaminated the Ćehotina river basin, drawing attention to weaknesses in monitoring, enforcement and environmental accountability.[7] The lesson is not simply that local opposition can stop an investment. It is that inadequate consultation, weak environmental safeguards and insufficient institutional trust can ultimately prove expensive for communities, governments and investors alike.

North Macedonia offers a somewhat different perspective because it combines contested mining projects with examples of meaningful local mobilisation and a model in which a substantial share of mining revenues returns directly to municipalities. Communities have repeatedly used local referendums to contest proposed metal mines. Around the Kazandol copper project, referendums in affected municipalities became an important instrument through which residents expressed concerns about agriculture, water and public health. The concession was ultimately cancelled, and a subsequent international arbitration case was decided in favour of the state in 2025.[8] At the same time, North Macedonia’s current concession system provides that 78 per cent of concession payments go to the municipality in which extraction takes place, with 22 per cent directed to the state budget. Following higher tariffs and stronger enforcement, revenues from mineral-resource concessions rose significantly during 2025, increasing the immediate fiscal benefits available to local authorities.[9] That does not resolve every environmental or governance question associated with mining. But it points towards an important principle: communities located closest to extraction should also be able to see tangible public benefits from it.

From extraction to participation

Communities are sometimes treated primarily as stakeholders to be consulted once the essential parameters of a project have already been established. That approach misunderstands their position. People living near mineral deposits possess something that neither investors nor distant decision-makers have: a permanent relationship with the place itself. A mining company may operate in a community for several decades. The community may live with the consequences of decisions taken during that period for generations. Meaningful participation therefore cannot begin only after the major decisions have effectively been made. Communities need accessible information about environmental risks, water use, waste management, expected employment, public revenues and plans for the eventual closure and rehabilitation of mining sites. Local authorities, civil society organisations, researchers and independent experts need sufficient space to scrutinise proposals.

Most importantly, consultation needs to be capable of influencing outcomes. The experience of Montenegro is instructive in this respect. Research on the country identifies the absence of a social licence as a significant risk for mining projects, noting that inadequate public participation, delayed access to information and low trust in institutions can generate sustained resistance, project delays and legal disputes.[10] Trust, in other words, is not the opposite of investment certainty. It is one of its foundations.

A recent policy brief examining the EU’s approach to critical raw materials in Serbia and Bosnia and Herzegovina makes a similar argument. Because the EU entered global competition for critical materials later than several other actors, the paper argues that trust and tangible local benefits should form part of its comparative advantage. It recommends moving beyond technical agreements towards a whole-of-society approach involving national and local authorities, domestic and European businesses, academia, civil society and local communities.[11] That approach would be particularly important in candidate countries. European integration should not mean simply incorporating the Western Balkans into European supply chains. It can also provide a framework for improving governance, strengthening environmental standards and ensuring that investment supports stronger institutions and more resilient local economies.

Keeping more value where resources come from

There is another dimension of solidarity that deserves greater attention: economics. The critical-raw-material debate is often presented as a choice between extraction and no extraction. An equally important question is what kind of economy is built around extraction when it does occur.

If raw materials leave the Western Balkans while processing, research, manufacturing, specialised knowledge and profits accumulate elsewhere, the region risks remaining at the lowest-value end of Europe’s green economy. A more ambitious approach would look beyond the mine itself. Investment agreements can support local suppliers and workforce development. Concession systems can deliver meaningful public revenues. Processing and other parts of value chains can, where economically and environmentally appropriate, be developed closer to the location of extraction. Mining revenues can support economic diversification so that communities do not become dependent on a single employer. Adequate financial guarantees and closure funds can ensure that environmental liabilities are not eventually transferred from private companies to taxpayers.

Bosnia and Herzegovina demonstrates why this question matters. Research on its emerging critical-raw-material sector identifies relatively low concession fees and limited local reinvestment as significant weaknesses and specifically recommends reforming concession systems so that resources and benefits are distributed more fairly.[12] The public-good principle therefore does not require rejecting private investment or private profit. Investment requires capital and involves risk, and companies legitimately expect returns. But ownership of capital should not become the only basis for determining who benefits from resources whose extraction transforms an entire community.

The same principle extends beyond primary extraction.

Recycling, recovering minerals from existing waste streams, improving resource efficiency and reducing unnecessary material consumption also form part of a resilient European raw-material strategy. The studies from both Bosnia and Herzegovina and Montenegro recommend greater attention to secondary raw materials, recycling and circular-economy solutions rather than treating new extraction as the automatic first response to growing demand.[13]

A genuine critical-raw-material strategy should therefore ask not simply, Where can we mine more?

It should also ask, How much do we need? What can we recover? What can we use more efficiently? And where extraction is necessary, how can its benefits be shared more fairly?

The resources beneath us, the future between us

Critical raw materials present Europe with a genuine dilemma. The green transition requires material resources. Securing reliable supplies has become an important economic and geopolitical objective, and the Western Balkans have a legitimate opportunity to participate in the industries and value chains that will shape Europe’s future. Pretending that Europe can decarbonise without material inputs would solve nothing.

But neither should decarbonisation reproduce an old development model in new colours — one in which raw materials and profits travel outward while environmental risks and social costs remain overwhelmingly local. The Western Balkans can be more than Europe’s nearby source of minerals. They can be partners in developing a different model of the green transition: one built around stronger institutions, transparent decision-making, high environmental standards, local economic value and meaningful democratic participation.

That requires governments capable of defending the public interest. It requires responsible investors prepared to accept scrutiny and long-term obligations. It requires the European Union to apply the standards it promotes consistently. And it requires communities to be regarded not simply as the final audience for investment decisions, but as participants in making them. Because the minerals beneath the ground may be economically valuable. But the rivers running above them, the forests and farmland surrounding them, the livelihoods built around them and the communities that call these places home have value too.

A green transition worthy of the name must find a way to recognise both.

And perhaps that is not a particularly radical proposition at all.

Endnotes

[1] Frauke Seebass, The EU’s Critical Raw Materials Dilemma in Serbia and Bosnia-Herzegovina: Taking Stock and Finding Ways Forward, Friedrich-Ebert-Stiftung, 2026, pp. 1–2. The paper notes both the Western Balkans’ mineral potential and possible benefits from strategic partnerships, including modernisation of skills and technology and improved public oversight.

[2] Ibid., p. 2.

[3] Seebass, The EU’s Critical Raw Materials Dilemma, p. 2. The paper cites estimates that Jadar production could cover 10–15 per cent of European lithium demand by 2030 and records the European Commission’s June 2025 designation of Jadar as a Strategic Project under the CRMA.

[4] Mirko Popović, Hristina Vojvodić and Ivana Milićević, There and Back Again: Extractive Diplomacy, Rule of Law Deterioration and Lithium Rush in Serbia, Friedrich-Ebert-Stiftung, August 2025. The analysis documents the Jadar controversy, environmental-governance concerns and sustained social mobilisation.

[5] Majda Ibrakovic, Critical Raw Materials: Dispatch from Bosnia and Herzegovina, Friedrich-Ebert-Stiftung, November 2025, pp. 3–4. The study identifies twelve projects at different stages and highlights limited local economic benefits, low concession revenues and concerns regarding transparency, environmental impacts and participation.

[6] Nataša Kovačević, Critical Raw Materials: Dispatch from Montenegro, Friedrich-Ebert-Stiftung, March 2026, pp. 3–4. The analysis identifies overlaps between mineral-prospective areas and protected or environmentally sensitive ecosystems and notes the legacy pollution affecting several mining regions.

[7] Ibid. The Brskovo project was cancelled following public opposition and procedural shortcomings and became subject to a EUR 300 million arbitration claim; the analysis also documents the 2025 Šuplja Stijena tailings incident affecting the Ćehotina basin.

[8] Davor Pehchevski, Critical Raw Materials: Dispatch from North Macedonia, Friedrich-Ebert-Stiftung, May 2026, pp. 19–20. The Kazandol case followed local referendums and ultimately resulted in cancellation of the concession; the subsequent investment dispute was decided in favour of North Macedonia in July 2025.

[9] Pehchevski, Critical Raw Materials: Dispatch from North Macedonia, pp. 8–9. Under the current system, 78 per cent of concession payments are allocated to the municipality hosting extraction and 22 per cent to the state budget; concession revenues increased considerably in 2025 following tariff changes and stronger enforcement.

[10] Kovačević, Critical Raw Materials: Dispatch from Montenegro, pp. 14–15. The study identifies inadequate participation, late disclosure and institutional distrust as important drivers of opposition and argues that community consent is important for project sustainability.

[11] Seebass, The EU’s Critical Raw Materials Dilemma in Serbia and Bosnia-Herzegovina, p. 1. The brief identifies trust and local benefits as important EU advantages and recommends a whole-of-society approach encompassing governments, businesses, academia, civil society and local communities.

[12] Ibrakovic, Critical Raw Materials: Dispatch from Bosnia and Herzegovina, pp. 3, 19. The analysis calls for reform of concession systems to ensure a fairer distribution of resources and benefits and greater community participation.

[13] Ibrakovic recommends prioritising reduction in mineral use, secondary raw materials and recycling alongside stronger environmental and community safeguards. See also Kovačević, who recommends resource efficiency, recycling and circular-economy measures before further expansion of primary extraction.