Bosnia’s beleagured aluminum smelter, Aluminij Mostar could soon partially reopen production after the company accepted a proposal from an Israeli-Chinese consortium to assume its lease.
The improved terms of the agreement were accepted by the company’s shareholders after it was rejected thrice previously after the Bosnian government that holds a stake in Aluminij rejected agreement terms that included government guarantee on loans and subsidized power agreements.
However, the current proposal does not include these clauses and the agreement spans a period of two years along with a clause to re-employ 200 workers at the smelter.
The consortium that is taking over Aluminij’s lease includes Israel’s MT Abraham group, China Machinery Engineering Corporation (CMEC) and China Non-Ferrous Metal Industry’s Foreign Engineering & Construction.
The smelter was forced to shut down because of rising debts due to high power costs and uncertain alumina prices.
Aluminij’s shareholders include the Bosniak Government and small shareholders who own 44pc of the company and the Croatian Government that holds the balance stake.