For sale: bankrupt copper mine, has new bulldozer

By Ivana Sekularac

BOR, Serbia (Reuters) - Once a socialist success story, Serbia's bankrupt copper mine is now hoping surging copper prices can attract a new owner with cash to reverse the fortunes of the sprawling complex and dusty town beyond.

In Yugoslav times, RTB Bor had 20,000 employees and sold copper to East and West. But isolation in the war-torn 1990s and zero investment since brought the firm to its knees, burdened with $500 million debts and sky-high production costs.

Despite the boom in copper prices, currently around $7,800 a tonne and five times higher than 2003 levels, RTB is losing $45 million annually.

In the second privatization attempt this year, Serbia has set the minimum price for two surface mines, one underground mine and the smelting and refining unit at $340 million.

"We are a thinking of ourselves as a bride, looking for a groom," said Branislav Mihajlovic, RTB's deputy manager. "Trends in the world copper market have turned RTB from a company with low prospects into a company with a future."

As a measure of its optimism the firm this month bought a new bulldozer -- the first in 25 years.

RTB has ore reserves of over a billion tonnes, confirmed by state reports, Mihajlovic added. Exploiting these would require investment, opening a new pit and restarting an old one that was closed down in 2000.

Five investors are interested, with the deadline for binding bids expiring on Oct 31: Britain's Vedanta Resources, Montanwerke Brixlegg, the copper producer of Austria's A-Tec Industries, Cyprus-based East Point, a Russian fund called Strike Force and Russia's Solvej, which runs several mines in Macedonia.