BELGRADE - Rio Tinto is revising the cost of its Serbian lithium project that the European Commission identified as one of 13 strategic new critical material projects, Chad Blewitt, managing director of the Jadar lithium mine, said on Wednesday.

The project is contested by green groups and many Serbs on environmental grounds, and sparked massive street protests in 2022 which led the government to revoke all Rio Tinto's exploration licences. The Constitutional Court overturned the decision last year and reinstated the licences.

"The last time we went out to market and looked at the budget, it was over 2.55-billion euros ($2.91-billion). So we are currently in the midst of updating that capital cost," Blewitt told Reuters.

"The strategic project status that we received today requires us to meet European Union environmental and human rights standards, and that will be reflected in the final capital cost."

He could not be drawn into an estimate of the revised cost or timeline for the project - which was initially forecast to start production in 2027 - saying the Anglo-Australian giant also needed to obtain a field exploitation licence.

"Once we... get the licence, we can then go and update the project schedules and have a look at costing. So I don't want to give a definitive date."

Rio is the only major mining company to bet heavily on lithium - used in electric vehicle batteries - accelerating its push over the past six months with three new deals: its $6.7-billion buy of US-based Arcadium Lithium and two projects in Chile for more than $1-billion.

With the lithium market in the doldrums as a wave of new supply overwhelms weaker-than-expected demand for EV batteries, it will take years to know whether this bet will have paid off, although demand projections for the metal are more positive into the next decade.

If implemented, Rio Tinto's Jadar project could meet 90% of Europe’s current lithium needs. But protesters in Serbia have threatened to block roads and railways if the project goes ahead.

"Whatever happens next will involve multiple stages of scrutiny and public consultation," Blewitt said. "It (the project) positions Serbia at the forefront of the green and digital revolution."