BELGRADE, July 7 Serbia's loss-making still mill
Zelezara Smederevo, which the government is keen to sell,
restarted its only operational blast furnace after a two-month
break on Monday.
The government bought back the Zelezara steel plant, which
employs about 5,000 people, from U.S. Steel in 2012 for $1
to prevent its closure. U.S. Steel had bought the then-bankrupt
steel mill in 2003 for $33 million.
Since then, several governments have tried to sell it
without success. In May it idled its only operational furnace
after the outbreak of a crisis in Ukraine jeopardized imports of
ore, and sent employees home with reduced salaries.
"After a two-month delay, the furnace No 2 was sucesfully
started ... and first tonnes of iron will be transported to the
steel foundry and rolling mill in two to three days," Zelezara
said in a statement.
Its sale is a vital part of Serbia's efforts to cut its
fiscal deficit, seen at over 8 percent of national output, and
cap its public debt which now stands at 63 percent of gross
Last week, Prime Minister Aleksandar Vucic said the
government was in talks with several companies and was willing
to give away Zelezara Smederevo to any investor who could make
The plant generates an average annual loss of about 102
million euros and has been running well below annual capacity of
2.4 million tonnes for the past five years.
Serbian media reported last week the government was near a
deal to sell the steel plant to Luxembourg-based United Group
SA, but there was no official confirmation.
In addition to Zelezara Smederevo, Serbia must also end
subsidies to more than 150 loss making state-owned firms costing
750 million euros ($1.02 billion) every year, if it wants to
secure a World Bank $250 million loan for budget support.
(Reporting by Aleksandar Vasovic; Editing by Zoran
Radosavljevic and William Hardy)