Following weeks of protests over plans for a lithium mine, Serbia has revoked Anglo-Australian mining giant Rio Tinto’s exploratory licences.
The announcement comes just weeks before Serbia’s April general election.
Relations between Belgrade and Canberra have lately deteriorated due to Australia’s treatment of Serbian tennis player Novak Djokovic and his expulsion.
Djokovic, the world’s number one men’s tennis player who was unable to compete in the Australian Open due to injury, has backed the anti-mine protests.
He uploaded photographs of demonstrators and beautiful landscapes on social media in December, along with remarks in Serbian such as “clean air and water are the keys to health” and “nature is our mother.”
Thousands of protesters have taken to the streets in recent months, blocking major highways in many cities, including Belgrade, the country’s capital, and Novi Sad, the country’s second-largest city.
They claim that the construction of a huge mine near Loznica in the western Jadar Valley will devastate the landscape and poison the region’s water supply.
Rio Tinto has previously stated that any mining projects in the country would adhere to both domestic and European Union environmental regulations.
At a news conference in Belgrade on Thursday, Ms Brnabic, Serbia’s first female and openly homosexual prime minister, told a news conference on Thursday that the decision to cancel the $2.4 billion (£1.8 billion; A $3.3 billion) Jadar lithium mine was decided in response to environmental organisations’ concerns.
The project was originally scheduled to begin manufacturing in 2027.
Rio Tinto’s stock plummeted in Australia as the news broke, and was down more than 4% by the time markets opened in London.
Local governments in western Serbia cancelled a plan to distribute land for a lithium mine in the region in December.
According to President Aleksandar Vucic, such a mine would require approval after an environmental review and a referendum.
Lithium is a key component of electric vehicle batteries, and demand for metal is on the rise.
According to the World Bank, worldwide lithium output will need to expand by 500 percent by 2050.