* Trepca mine once the crown jewels of ex-Yugoslavia
* Mining complex threatened by creditor claims
* Once employed 20,000 people, now operating at minimum
By Fatos Bytyci
PRISTINA, Jan 16 (Reuters) - Kosovo’s government said on Friday it planned to take over the giant Trepca mine complex to save it from bankruptcy and restore it to its former glory, angering the country’s former master Serbia.
Serbia said the plan, which is expected to be debated by the Kosovo parliament on Monday, would threaten a fragile thaw in relations with its former southern province which it lost control of in 1999.
The Trepca mine is a giant, rusting complex of lead, zinc and silver mines that once employed 20,000 people and accounted for the majority of the former Yugoslavia’s mineral wealth.
It has been held in trust by an agency created by the United Nations, tasked with selling off state property following the region’s 1998-99 war.
The Privatisation Agency of Kosovo (KPA) became a government body in 2008 when Kosovo declared independence from Serbia, but it has failed to come up with a plan for Trepca’s future, partly due to its murky ownership structure and myriad creditor claims.
Citing the risk of the company being dismembered by creditors, Kosovo Prime Minister Isa Mustafa said on Friday his government would declare Trepca “public property, to be managed by the government and removed from the authority of the KPA”.
Both Serbia and Kosovo have long extolled Trepca’s potential, though experts warn it would need huge investment to restore it to anywhere near its Yugoslav-era heyday.
The complex maintains a minimum level of output, though managers at the mine estimate the reserves could be worth some 10 billion euros ($11.6 billion).
It may also take years to sort through all the creditor claims, mainly from Serbia but also from a number of Greek investors, before restoring the mines.
Complicating matters, part of the complex lies inside Serbia, and part within a small northern pocket of Kosovo populated by Serbs who reject Kosovo sovereignty.
Responding to media reports about the move on Thursday, Serbian Prime Minister Aleksandar Vucic said it would deal “a heavy blow” to European Union-sponsored talks between the former foes to improve cooperation and integrate them with the bloc.
Serbia argues that the sale of “socially-owned enterprises” of the former Yugoslavia within Kosovo amounts to state plunder.
“There will be no sleep for us before Monday,” Vucic said, referring to the scheduled vote in the Kosovo parliament.
Responding to Vucic’s remarks, Mustafa said: “Trepca is a property that belongs to the state of Kosovo. A decision on Trepca will be taken only by the Kosovo government and parliament.” ($1 = 0.8642 euros) (Editing by Matt Robinson and David Clarke)