| MOSTAR, Bosnia, June 7
MOSTAR, Bosnia, June 7 The closure of Bosnia's
sole aluminium smelter is set to affect thousands of jobs in the
Balkan country and neighbouring Croatia and will lessen their
chances for returning to economic growth any time soon,
officials warned on Friday.
Aluminij Mostar, faced with high power costs and low prices,
has been racking up monthly losses this year and said on
Thursday it would close on June 17.
Ljubo Beslic, mayor of the town of Mostar where the plant is
based, appealed to the government to help avert the shutdown.
"Nobody has the right to close their eyes before this problem,"
he said. "It would be unforgiving if the government let it close
and leave thousand of its workers and their families without
The metal sector is key in Bosnia, impoverished after the
1992-95 war, and accounts for about a half of its exports.
Aluminij sells most of its aluminium into the depressed European
construction and auto industries.
Aluminij, with a 900-strong workforce, is a major employer
in the south of the former Yugoslav state and its biggest
exporter. It has repeatedly urged the Muslim-Croat federation
government, which holds a stake in the company, to subsidise the
price of its power, which accounts for more than 60 percent of
the cost of producing each tonne of aluminium.
The Bosnian economy has struggled to develop since the end
of the 1992-95 war and unemployment last year was an estimated
The closure of the smelter will have little impact on the
oversupplied 45 million tonnes global aluminium market, but will
be a big blow to dozens of local metal processors, which employ
at least 8,000 workers in Bosnia and Croatia and rely on its
"The closure of Aluminij will have catastrophic consequences
for 1,000 jobs in Croatia's ... light metal factory TLM and
another 5,000 in the wider Dalmatia region," said Zdravko
Burazer, head of Croatia's metal sector unions.
Among those likely to be hit in Bosnia is Feal, a company
with 500 workers and annual turnover of more than 200 million
Bosnian marka ($135.6 million).
Branko Radulovic, deputy speaker of Montenegro's parliament
and ex-manager of aluminium plant KAP, said that even if
aluminium firms manage to stay afloat after Aluminij closes, it
would be only temporary, since they would face much higher costs
of raw material imports.
"Our eyes are turned to Aluminij and we pray to God for its
survival," Radulovic told reporters in the southern town of
Mostar. "I see no economic future for the region without base
industry and competitive aluminium industry sector," he added.
Aluminij General Manager Ivo Bradvica said the shutdown
would take four months to complete and would cost almost $13
million. He said any restart would take much longer and cost at
least $30 million.
(Editing by David Holmes)