Jadar Project Layers of Assurance

1. Layers of assurance

The applicable laws of the Republic of Serbia prescribe the obligation of the investor to secure insurance in case of liability for damages caused to third parties in the event of an accident, as well as the obligation of the investor to submit a promissory note, bank guarantee, or corporate guarantee for the rehabilitation and reclamation of any potentially degraded land due to exploitation, along with the request for performing mining works. As always, Rio Sava Exploration, should it be able to proceed with the development of the Jadar project, will certainly comply with these legal obligations.

Additional guarantee is that we are unable to sell any material in the EU (whether as lithium carbonate or any single part of a battery) from Serbia unless we meet the requirements for a battery passport, entering into force in 2027. This is certainly a very strong guarantee, as we would invest billions of dollars in developing the project and would not be able to generate any revenue unless we meet the EU environmental standards.

2. State institutions supervision

• The company is legally responsible for the implementation of all environmental protection measures.
• The company's work would be monitored by state institutions that citizens can contact if they suspect that the company is not operating in accordance with the law.
• Serbian laws are clear - every company is liable in court if its activities endanger people's health.

3. Public reporting on the results of environmental impact monitoring

• All environmental impact monitoring data (including water, air and soil) would be published on the company's website.
• We will be open to any type of public analysis and discussion of this data.

4. Supervision of members of the local community

• The company would financially support the participation of the local community in the independent monitoring of the Project's impact on the environment.
• Monitoring on behalf of the local community would be carried out by independent experts who would use modern measuring equipment and adhere to international monitoring and reporting standards.
• This means that the monitoring carried out by the company, and the monitoring carried out independently by the local community, would take place in parallel to ensure that the company is operating according to the law.
• In case of discrepancy between the results, independent third-party analyzes would be conducted, and if deviations were confirmed, the company would immediately take all measures to ensure full compliance with legal requirements and EU standards.

5. Independent experts supervision

• We accept and would support the supervision of domestic and foreign independent experts who would independently control whether the company fulfils its legal obligations.
• We would discuss the composition of this control body and the way it would work with all interested parties.

6. Investor supervision

• Our company operates on three major stock exchanges (New York, Australian and London stock exchanges). Our shareholders refuse to invest money in Projects that harm the environment and would withdraw their investments if the Jadar Project had harmful consequences for the environment.
• If we do not ensure that our business is not responsible, investors can put us on the "black list", which would mean big financial losses, reduced access to capital and big reputational damage.

7. European standards

• If the lithium from Jadar was not produced responsibly, it would not be possible for it, nor the batteries in which it would be found, to be exported and sold on the European market. This is clearly stated in EU regulations.
• In order for lithium from Jadar to be sold in Europe, it must be produced in such a way that it meets all the requirements of European environmental protection regulations.
• From 1 February 2027, every industrial and electric vehicle battery sold in the EU will have to have a "battery passport". This certificate must contain publicly available data that would show whether the raw material used in the manufacture of the battery was obtained in a responsible manner.
• On March 15, 2024, the European Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD). The directive clearly states that special attention is paid to the supply of critical minerals. Starting on January 1, 2029, all European car manufacturers will have to prove that their supply chains have not illegally violated the environment and human rights.
• The same rules would apply to non-European mining companies that would like to place their goods on European markets. In addition to the violation of this directive, it would be impossible to sell lithium on the European market, any company that would violate it would also be exposed to extremely high fines that would not be lower than 5% of the total turnover that the company makes in the whole world.

8. Customer requirements

• The business success of the Project depends on the application of the highest standards of environmental protection. Potential buyers and the European Union (EU) do not want to buy raw materials that would be obtained with a harmful impact on nature.
• That is why the supply of lithium to the auto industry is subjected to the strictest external checks, which include a detailed analysis of the measures implemented by the manufacturer to prevent harmful effects on the environment.
• All leading car manufacturers have adopted this approach and it will therefore become impossible for mines to sell lithium-based raw materials if production does not meet the EU's highest environmental standards.
• The largest car companies operating in the EU market, including BMW, Volkswagen, Toyota, Volvo, Honda, Mercedes and Volvo act singularly towards suppliers.
• This means that lithium from Serbia could not be sold in Europe at all, which is the most important market, if it was not produced in a safe and responsible way.