Only days after they announced their pending resignation, Aluminij d.d. Mostar’s management said the entirety of the plant’s remaining workforce will be laid off.
On Tuesday domestic media reported upon the move, which will soon leave 362 workers jobless. Management went on to say that employees would have varied notice periods so that the plant could work through a backlog prior to closing.
Aluminij opted to wait until 2019’s last day to announce layoffs in order to allow all those losing their jobs to receive severance pay. Per local media, many of those laid off this week would be back at work by month’s end on new work contracts in the high-voltage and high-voltage maintenance field.
Despite the layoffs, management says it is continuing negotiations with a conglomerate of Israeli and Chinese investors consisting of China Machinery Engineering Corporation (CMEC), and China Non-Ferrous Metal Industry’s Foreign Engineering & Construction, and headed up by M.T. Abraham Group of Tel Aviv. The consortium’s latest deal was delivered in September, but the government did not find it palatable due to requirements for subsidized power and debt payment assistance from local governments.
The smelter was shuttered this summer as a result of the skyrocketing debt, which was largely the product of the high cost of power and alumina. To date the firm’s estimated debt totals US$216.5 million, and Bosnian authorities are reportedly investigating the plant’s financial operations.
Management opted to idle the plant after a search for a strategic partnership yielded nothing and takeover talks with London commodity trader Glencore and other possible investors fell through.
Currently the autonomous Bosniak-Croat Federation is the plant’s single biggest owner, having a 44-percent stake in it. The Croation government holds another 12 percent, with smaller individual shareholders owning the remaining 44 percent.