Rio is reviewing the legal basis for the decision and could sue Serbia as it tries to salvage the $2.4 billion project.

“The most likely outcome is an environment where commodity prices can settle from the extraordinary highs of 2021. But there are plenty of risks to this outlook," says Wood Mackenzie.

The company says the plant, which it will purchase for C$5.5 million, will significantly reduce the cost of developing its NICO cobalt-gold-bismuth-copper project.

Chinese lithium carbonate prices rose to a fresh record on Monday, as data showed a 35% month-on-month jump in electric-vehicle registrations in December.

The world's shortage of lithium would be exacerbated with the cancellation of the Jadar project, experts said.