Aluminij Mostar (Aluminij)—which runs Bosnia’s only aluminum plant—has laid off 362 workers and idled the plant until investors are found to assume the company’s debts and restart operations.
Aluminij’s challenges came to a head in the summer of last year, resulting in the closure of its smelter. The company, whose debts are an estimated $216mn, attributes the closure to the high costs of power and raw material like alumina, which became unsustainable.
So far, it has been unable to find investors to take over the plant’s operations. In September 2019, the government-owned entity’s talks with an Israeli-Chinese consortium did not yield results.
The latest deal offered by this consortium—which is composed of China Machinery Engineering Corporation (CMEC), China Non-Ferrous Metal Industry’s Foreign Engineering & Construction, and M.T. Abraham Group of Tel Aviv—required subsidized power and debt assistance from local governments. But the Bosnian government wasn’t comfortable fulfilling this requirement.
Aluminij is resuming negotiations with the consortium after takeover talks with Glencore and other possible investors fell through. It has also called for an extraordinary general meeting of its shareholders on Jan 17, 2020 to discuss the lease agreement on assets shared with MT Abraham Group SA.
Additionally, the company has indicated that most of the laid-off workers will be rehired with new contracts in the high-voltage and high-voltage maintenance fields.