INTERVIEW-Bosnia's Aluminij eyes restoring production in autumn

* Could restore full production if prices recover * Well positioned to survive economic slowdown * Annual production could reach 300,000 tonnes MOSTAR, Bosnia, June 17 (Reuters) - Aluminium smelter Aluminij Mostar, Bosnia's largest exporter, could restore full production in the autumn if the metal's price recovery continues, and is well positioned to survive the economic slowdown, a top official said. Aluminij cut output by a quarter this year due to the economic crisis and high electricity prices. "If the metal prices continue to recover after a sharp drop at the end of 2008 and early this year, we are ready to restore the production," Aluminij Mostar's new general manager Ivo Lasic told Reuters. Aluminij produced 123,000 tonnes of metal in 2008 after it refurbished an anode plant last September. Because of the cuts it will likely have an output of about 95,000 tonnes at the end of this year, said Lasic. In the first five months of 2009 the company produced about 40,000 tonnes of metal. "Raw material was expensive, the price of metal fell and the effects of the crisis were higher than we anticipated," Lasic said. The smelter produces anodes, billets, wire, ingots, T-bars and slabs used in the metal, construction and car industries, which have been hard hit by the global financial crisis. The price of aluminium is around half the record $3,380 it hit in July last year, but is off its lows. Bosnia's metals exports fell about 50 percent in the first quarter of 2009, hit by lower demand and prices. The sector's exports account for about 80 percent of its overall output. Aluminij Mostar exports totalled $36 million in the first quarter of 2009, two-and-a-half times less than in the same period last year. But Lasic said an overhaul of the plant after Bosnia's 1992-95 war had enabled it to cope better with the economic crisis than other smelters in the region which were forced to make more cuts or halt output because of falling metal prices. "Thanks to the risky move to invest in modernisation right after the war we are in a much better position now and we are capable of surviving the present market conditions," Lasic told Reuters late on Tuesday. Slovenia's aluminium smelter Talum and Montenegro's indebted aluminium plant Kombinat Aluminijuma Podgorica (KAP) have halved their output. Lasic also said the company's annual production could reach 300,000 tonnes if plans to build a plant for aluminium waste recycling and new electrolysis went ahead. But those plans depended on completing the privatisation of the company and finding a power supplier that would offer favourable electricity prices, he said. Lasic said the sale of an 88 percent stake in the plant -- held half by the company and half by the regional government -- to a consortium led by Swiss-based commodities trader Glencore [GLEN.UL] had stalled over high electricity prices. Management and the government will have talks this month on how to solve the electricity shortages. Aluminij has said it was looking into the possibility of building a new thermal power plant. "Glencore is still interested in the privatisation and has so far invested several dozen million euros in banking guarantees," said Lasic. "The government should help us find the best solution regarding the power supplies if they want to attract fresh capital." Bosnia's metal producers urged the government this month to help them survive the current economic crisis by subsidising electricity prices and launching long-delayed investments.