The mining giant Rio Tinto, which is listed on the London Stock Exchange, among others $RIO (+0,52 %)
$RIO (+1,42 %) has put its massive Jadar lithium project in Serbia on hold for cost reasons in order to focus on other short-term opportunities.
According to an internal memo obtained by the Wall Street Journal, Rio Tinto announced it was putting the Jadar lithium project - a US$2.4 billion project considered to be potentially one of the largest greenfield lithium projects in the world - into maintenance mode.
The company, whose new CEO Simon Trott promised to cut costs and streamline operations when he took office in August, said the decision was made "as part of our strategy to simplify the entire portfolio and prioritize near-term opportunities".
Rio Tinto is one of the world's largest lithium producers following its US$6.7 billion acquisition of Acradium Lithium last year.
The mining group continues to attach strategic importance to Jadar and previously stated that the size and high grade of the deposits offered the potential to supply the electric vehicle value chain with lithium "for decades".
However, the project faces ongoing difficulties in obtaining approval from the Serbian government as well as opposition from the surrounding communities.
"Given the lack of progress in the permitting process, we cannot maintain the level of expenditure and resources committed to date," the company said in an internal statement this week.
Trott is expected to explain the strategic direction of the mining company to shareholders at a scheduled capital markets day in London on December 4.