EGA, Glencore In Talks With Bosnian Government Over Struggling Aluminij Smelter

EGA, Glencore In Talks With Bosnian Government Over Struggling Aluminij Smelter

Talks are underway over the fate of Bosnian aluminium smelter Aluminij d.d. Mostar, as Emirates Global Aluminium PJSC and Glencore plc have both expressed interest to the Bosnian government regarding the formation of a strategic partnership with the struggling plant.

According to domestic reportage, EGA is in the early stages of developing a plan for the plant’s recovery, which it says will begin with a financial and technical analysis of the plant’s operations. Upon completion of the initial analyses, EGA will organize a 5-year plan that would not only return the plant to solvency, but also double its aluminium output.

Meanwhile, the Bosnian government held separate talks with Glencore regarding the plant’s future. State energy minister Nermin Dzindic said that the discussions with the British-Swiss firm were fruitful, but not quite as in-depth as those with EGA. However, he said Glencore requested that talks with the state continue.

Though talks with the firm appear to be in their infancy, Glencore has already made positive contributions to the plant by way of funding to continue operations for another four days. Local media said the rationale was to extend time for a solution, as a prior audit warned the plant that bankruptcy is its sole remaining option should a strategic partner not be found in the very near future.

At present, Aluminij owes power provider Elektroprivreda HZHB US$161 million in unpaid electricity bills, leading the utility company to suspend service until the plant makes good on the past-due bills. The Bosnian government, which has subsidized the plant’s power bills in the past, is no longer interested in subsidizing Aluminij’s power bills, citing the excessive burden such subsidies are placing upon taxpayers.

Aluminij was founded in 1975 and is the country’s third-largest exporter. The plant boasts a production output of 106,500 metric tons and a revenue of €249.41 million in 2017.