July 4, 2019 / 3:09 PM / 5 months ago

Emirates Global Aluminium (EGA) eyes Bosnia's indebted Aluminij

SARAJEVO, July 4 (Reuters) - Emirates Global Aluminium (EGA), one of the largest industrial firms in the United Arab Emirates, has expressed interest in Bosnia’s debt-laden aluminium smelter Aluminij Mostar, Bosnia’s regional energy and mining minister said on Thursday.

Bosnia’s sole aluminium smelter and one of the country’s biggest exporters on Wednesday threatened it would halt production on July 6 unless the government of Bosnia’s autonomous Bosniak-Croat Federation, helps it stay afloat.

It has been in trouble for years over debt accumulated because of high alumina and electricity prices.

EGA will now asses Aluminij’s value, said Nermin Dzindic, the Federation energy and mining minister, before it starts talks with Aluminij’s shareholders about a possible takeover.

Aluminij is 44-percent owned by the Federation government, with small shareholders holding another 44 percent and the Croatian government the remainder.

Dzindic said that EGA pledged to double output at Aluminij from the current 130,000 tonnes a year and was ready to negotiate the power purchase deal with Bosnia’s three power utilities to secure continuous production for up to ten years.

He also said the government would resume talks tomorrow with a consortium led by London-listed miner and commodity trader Glencore which had also expressed an interest in Aluminij and was ready to improve its previous offer.

Aluminij, which employs 900 workers, has been trying to reach a deal with the regional government on subsidised electricity prices.

Its closure would put at risk some 10,000 jobs, taking into account its contractors and the aluminium processing firms it supplies with the metal.

“We are trying to do our best to keep Aluminij afloat,” said Dzindic.

Aluminij’s total debt amounted to nearly 380 million Bosnian marka ($220 million), of which 280 million marka was to the state power utility, EPHZHB, which last month stopped supplying it with power at favourable prices agreed with the government last December. (Reporting by Maja Zuvela; Editing by Elaine Hardcastle)

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