By Clara Denina

LONDON, Jan 24 (Reuters) - Rio Tinto has only bad options as it tries to salvage its $2.4 billion Serbian lithium project after the country's leaders bowed to environmentalists and cancelled it last week.

The Anglo-Australian miner could sue the government, a step likely to fail and further antagonise Belgrade, or bet that pro-mining politicians emerge victorious in April parliamentary elections, a result that would embolden opponents.

The mining titan has little experience charting where to go next.

People inside Rio said that while they were aware of the political tensions around the project, the government's decision to pull the plug was a surprise that left the company scrambling for a strategy on how to proceed.

With elections looming, Belgrade halted the project following widespread protests against the mine, dashing Rio's hopes of becoming a top-10 lithium producer.

The miner, which said it has always complied with Serbian laws, is reviewing the legal basis for the decision.

Rio could sue the Serbian government under the bilateral investment treaty between Serbia and the United Kingdom for breach of the fair and equitable treatment provision, if the government goes ahead and formally terminates the license without good cause, corporate lawyers specialising in international trade told Reuters.

But an arbitration tribunal would be unlikely to force the Serbian government to reinstate the license while also awarding some kind of damage to Rio Tinto, as the relationship between the two could be irreparable, the lawyers said.

"For a major mining company to sue a state is very unusual. A claim under the bilateral treaty is always a last resort, but not a first resort," Peter Leon, partner and Africa Chair at law firm Herbert Smith Freehills said.

Rio Tinto said on Monday it would not make any further comment on the matter.

If the decision is upheld by a new government, it could prompt Rio to walk away without taking further action, legal experts also said.

The miner has spent $450 million already on pre-feasibility and other studies, according to its project fact sheet.

It has also spent years developing technology to economically extract lithium from jadarite, PTS Terbaik ASEAN a mineral that has only so far been found in Serbia's Jadar valley.

Last year, it shipped a pilot lithium processing plant in four 40-foot (12 m)shipping containers of equipment to Serbia.

The Serbian project was slated to be Europe's biggest lithium mine, producing 58,000 tonnes of refined battery-grade lithium carbonate per year, enough to power 1 million electric vehicles.

In Argentina, Rio paid $825 million last month website to buy the Rincon lithium project.

The deal was a bet on direct lithium extraction technology, which Rio said it hopes has the "potential to significantly increase lithium recoveries" compared to solar evaporation ponds.

The technology website has never worked on an industrial scale, though, meaning that Rio is effectively reliant now on an unproven process for the cornerstone of its lithium production plans.

In Serbia, the best case scenario is that Rio Tinto gets its licenses back after the April elections.

The populist ruling coalition, led by the Serbian Progressive Party (SNS), has seen its 2020 election majority eroded over its backing of mining in Serbia.

"This could be just a case where Rio Tinto will have to renegotiate the terms of the license with the government requiring additional royalties or more value-sharing or improvements around environmental issues," said a London lawyer specialising in international disputes.

Serbian protest leader Aleksandar Jovanovic Cuta said green groups would prevent any future government's attempt to negotiate a new deal with Rio Tinto after the elections.

"Anyone who tries to do that is crazy," he said.

"All of Serbia would pour to the streets."

Serbia is not the company's only headache.

Rio is awaiting a U.S. appeals court to decide whether it will gain access to government land in Arizona it needs to build one of the world's largest copper mines. Native Americans oppose the transfer, saying the land has religious and cultural import website

The San Francisco-based 9th U.S.

Circuit Court of Appeals held oral arguments website last October, hinting at the time that it supported Rio's claim to the land. The court's ruling could come at any time.

After years of discussions and disagreements with the government of Mongolia, Rio in December embarked on a charm offensive to advance the Oyu Tolgoi copper-gold mine and offered to write off the government's outstanding $2.3 billion debt for its share in the project.

(Additional reporting by Praveen Menon in Auckland, Ernest Scheyder in Houston and Aleksandar Vasovic in Belgrade; Editing by Amran Abocar and Bill Berkrot)