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Bosnian Aluminij Mostar’s Privatisation may Fail

Tuesday, Jun 03, 2008
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SARAJEVO, June 2 - The privatisation of Bosnia's sole aluminium smelter Aluminij Mostar could end without fruits due to the government's refusal to subsidise electricity prices for the nation's biggest exporter, said the company’s general manager Mijo Brajkovic yesterday. "The government and Aluminij Mostar must find common interest in terms of electricity prices, otherwise there will be no hope of its privatization." Mostar-based Aluminij Mostar has been complaining for years about insecure and inadequate power supplies, but the Muslim-Croat federation government has turned down its request for subsidised electricity prices. Expensive electricity has held up the deal between Aluminij Mostar and a consortium headed by Swiss-based trade house Glencore. Glencore has offered to pay 76.8 million euros for an 88 % stake in Aluminij, which accounts for 50% of Bosnia's exports. The remaining 12% stake is owned by Croatia's sole aluminium maker TLM. Glencore linked the power cost with the price of aluminium on the London Metal Exchange MCU3, adding future investments would depend on how cheap electricity was. "I think Glencore's offer is fair. They want to be secured of regular power supplies if they were to buy Aluminij Mostar," Brajkovic said. The management and the government -- each enjoying a 44 % stake -- negotiate each year how to solve electricity shortages. In order to overcome the shortages, Aluminij is considering a possibility of building a new thermo-electric power plant. COPYRIGHT All rights reserved. The copying, republication or redistribution of WAM News Content, including by framing or similar means, is expressly prohibited without the prior written consent of WAM.

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