NewsEcology
09 Aug 2021

How Rio Tinto was buying Loznica – From a Guest at Patron Saint Day Celebrations to an Enemy

One of the houses Rio Tinto bought; photo CINS
Dragan Šakić was born in the village of Brezjak, not far from Loznica, where he lived for more than 40 years. In this village with some 170 inhabitants, Dragan had a house spanning roughly 50 square meters, a farmstead and a bit of land. Today, all the Šakić family has left in Brezjak is the land, and they might end up selling it, too. They are just one of the families who have sold their property to Rio Tinto Sava Exploration, a Serbian subsidiary of Rio Tinto Group, which has been buying up land in this area since last year in order to build a lithium mine. However, the hefty sums of money the company has been offering for the purchase of houses and land over the past several months have caused a divide and a conflict between neighbors.

As he gathers hay with his son, Dragan talks about how the sale to Rio Tinto earned him just over 80,000 euros, even though the real value of the property was less than 15,000. He and his family left their village and moved around 10 kilometers away, where they live in a house that is 10 times bigger than the old one. Nevertheless, he does not think he is doing better now.

“I only sold [the house] because everyone else had sold [theirs]. So that we wouldn’t be the only ones left there, that’s why. Otherwise, I was always against (the mine, journalist’s note) and I took part in those protests, but what good is that.”

According to the data presented by Rio Tinto, almost half of the planned 52 households in the village of Brezjak had been relocated by mid-July this year. Stefan Janković, a representative of the company, told the Center for Investigative Journalism of Serbia (CINS) that the company now owned almost 40% of the 250 hectares planned for the mine. In addition, preliminary contracts have been signed with some of the villagers.

“We can safely say that the land buy-up is going great for the time being,” said Janković.  

A square meter of housing in this area can now be sold for about 470 euros, whereas a square meter of garage, storage space, pigsty, stable and basement is worth roughly 200 euros. Fences, gates, and concrete paths in yards are paid extra, and anyone who sells their house gets an additional 5,000 euros. There is also a bonus for those who move out in the first four months after receiving an offer – another several thousand euros.

The houses that were sold now look like wartime ruins because their owners take the roof tiles, windows and doors with them.

However, it is the sale of the land that was one of the points of contention between the company and those who are now opposed to the construction of the mine. The data CINS obtained and interviews with the locals, activists and Rio Tinto representatives show how this company had donated money for years to the local community, had been a welcome guest at the villagers’ patron saint day celebrations, while today, through its activities, it has even managed to sow discord within families.

Miladin Đurđević of the We Won’t Give Jadar Up association calls the way in which the company approached the locals “the boiled frog mechanism:”

“If you put a frog in hot water, it jumps out and runs away. But if you put it in cold [water] and keep heating it up, you’ll boil the frog. That’s how they [dealt with] the locals.”

Rio Tinto, money and the first problems

One of the Rio Tinto employees asked the staff at the outpatient unit of the Loznica Health Center in the village of Brezjak whether they had a refrigerator for storing snake antivenom. The staff said they needed a refrigerator, and the company then donated 250,000 dinars to the outpatient unit which was used to buy not just the refrigerator, but also an ECG machine and an air conditioner.

The company also gave money to the local communities located near the future mine. For example, in the Stupnica Local Community the company bought balls and equipment for the local soccer club and paved a basketball court for the elementary school. The field roads used by the company’s vehicles were also paved, according to the reply this local community sent CINS.

Rio Tinto paid the registration fee for three students of the Vuk Karadžić high school in Loznica, enabling them to attend courses at the Petnica Science Center.

The data of the Treasury Administration, which the Podrinje Anti-Corruption Team (PAKT) forwarded to us, show that Rio Tinto gave more than 11.6 million dinars to schools, local communities, the Health Center and the Cultural Center in Loznica in the period from 2011 to March 2020.

The sum of money invested by the company is probably even bigger. In their reply to CINS, representatives of the Loznica-based Vuk Karadžić Cultural Center said that Rio Tinto had given the center 19.2 million dinars. They explained that the company was legally obliged to finance archaeological protective exploration, in this case the Paulje archaeological site.

Archaeologist Rada Gligorić of the Jadar Museum in Loznica, with whom the CINS journalists talked at one of the archaeological excavation sites, explained that the procedure had been expedited because of the mine:

“What we otherwise might have done in 10 or 20 years we are doing in five or six. And we have the funds secured.”

Furthermore, the company also boasts a number of benefits it provides to people whose property it is interested in – it gives shopping vouchers for agricultural stores, it offers space for storing items during moving, it hires a real estate agency which finds the villagers offers for new places to live.

“They (Rio Tinto, journalist’s note) are making it out to be some kind of social responsibility or cooperation with the local community. But that is certainly their way of trying to mollify the local community,” explained PAKT’s Miroslav Mijatović.

PAKT’S MIROSLAV MIJATOVIĆ; PHOTO: CINS

The company took a friendly approach to the locals from the very beginning, according to representatives of the We Won’t Give Jadar Up local association, which is against the construction of the mine.

“In 2004 they came there and started studying the people’s mentality, family situations, who has what problems, people’s psychological profiles, they came to patron saint day celebrations, to festivities,” said Nebojša Petković, a member of the association.

However, at one point everything changed. The activists we spoke to said that protests were sparked by land repurposing, in the fall of 2020, without people’s knowledge. At the request of the City of Loznica, the agricultural and forested land in the area where the mine is to be opened was changed into land in a construction area, according to the decisions of the cadastre which CINS had access to. Rio Tinto paid the repurposing fee, even though it was not the owner of the land at that time.

A BLACK SECURITY SUV PATROLLING THE VILLAGE; PHOTO: CINS

The repurposing more than doubled the landowners’ taxes and called into question their sowing of fields because it was no longer agricultural land, Mijatović of PAKT explained. Additionally, he said, people would no longer be able to get government subsidies or take loans for agriculture.

“The institutions of the system were placed at the disposal of a foreign company and completely neglected the interest of the citizens who pay them,” said Mijatović.

Changes to the Spatial Plan for the Special Purpose Area for the realization of this project are under way, and the plan is being made by the Ministry of Construction, Transportation and Infrastructure at the initiative of Rio Tinto. According to the plan, a mine waste disposal site would be positioned closer to the mine, i.e. in the place which is currently fertile land. The reason is purely economic – in this way the company saves money on waste transportation. Company representatives say that the process of changing the plan is in progress and that the buy-up of that land has not yet begun.

SITE PLANNED FOR MINE WASTE DISPOSAL; PHOTO: CINS

Rio Tinto discovered the presence of the mineral jadarite in this area in 2004. Lithium can be extracted from the mineral, which is used, among other things, for making electric car batteries and storing renewable energy sources. Since then, the company has been conducting exploration and even though it is not yet certain that the company will build a mine, one after the other the decisions give it that option. Company representatives have announced that there is a plan to start building an access road to the mine.

“The authorities are doing everything to launch this project. They have sided with Rio Tinto. We feel left behind, abandoned, forgotten,” said Marijana Trbović Petković of We Won’t Give Jadar Up, and added:

“Had the government wanted to take care of this village and these people and what that would look like, it should have formed its own team that would work in parallel with the company. (…) Not leave us to the company to fleece us any way it likes.”

Striking Rio Tinto’s door with a metal bar

Dragan Šakić, who sold his property to Rio Tinto, explained to CINS that he did not want the mine to open because he believed that the fact that he had moved did not protect him from potential harmful consequences. He still does not want to sell his 30 or so acres of land:

“I told them that when everyone sold [their land] and everyone was done, then I would give them that.”

According to Marijana Trbović Petković, the choice Rio Tinto has given the locals has caused a rift in a village that used to be united.

“There are conflicts in families. Even our grandfather secretly sold one field, he didn’t dare to sell the rest, and that caused complete chaos. (…) There’s also two brothers, one is selling, the other one won’t [sell], there are close friends, and so on.”

Over the last few months, there have been frequent incidents involving some of the local activists in the village of Brezjak. For example, some villagers are bothered by the fact that black security SUVs patrol the village because they see that as a form of pressure on the inhabitants, while on the other hand the company explains that it is only guarding the abandoned houses so that no one moves into them.

A BLACK SECURITY SUV PATROLLING THE VILLAGE; PHOTO: CINS

A minor incident also happened while the CINS journalists were conducting an interview at the Rio Tinto office in Brezjak. While working his land, a villager came across a metal bar used to mark the land. Yelling that it could have caused his machine to break down, he threw the bar angrily at the company door. The Rio Tinto representatives said it was not their fault but rather that the Roads of Serbia public enterprise was marking the route for a road.

“You know, up until a year ago all those people cooperated with us, leased out plots where we had boreholes. They took money from Rio Tinto, they signed contracts with us, and now all of a sudden we’re no good,” Stefan Janković explained.

Some of the villagers sold their forests to Rio Tinto and then illegally cut trees. The PAKT organization reported that to the competent inspectorate, which pressed criminal charges against those people, according to the documents CINS examined.

Marijana Trbović Petković has mixed feelings when talking about the people who have sold their property. She understands those who had a difficult life before and says that she is even happy for some, like Dragan Šakić. At the same time, she did not hide her anger as she toured the abandoned parts of the village with the CINS team:

“Everyone is hungry for money.”

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