Bosnia's mountain minerals offer hope as Adriatic Metals digs in

VARES, Bosnia (Reuters) - In a remote mountain town with a history of mining that dates from Roman times, hopes are high that British mineral company Adriatic Metals will bring jobs and spur some of the economic revival Bosnia craves.

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Foreign direct investment in the country had already fallen as bureaucracy deterred investors. In the first half of this year, it was down nearly 50% compared with a year ago as the pandemic paralysed economic activity.

Adriatic Metals is providing a significant boost, with backing from the European Bank for Reconstruction and Development, which this week said it had bought a 2.6% stake in the company for 6.6 million euros ($7.8 million).

Following its acquisition in 2017 of Bosnia’s Eastern Mining, Adriatic Metals has invested around $20 million in geological research and plans to pour in around $200 million by the end of 2022, when production should begin provided authorities issue the necessary permits.

Early this month, Adriatic Metals also bought Tethyan Resource Corp., which owns two zinc and lead mines in neighbouring Serbia, making it a regional player, Eastern Mining General Manager Adnan Teletovic told Reuters.

In Vares, he said mining could employ around 380 people to help work two deposits expected to produce silver and zinc, as well as gold and lead.

The authorities in Vares, which was a mining and industrial town until the mid-1990s when the Bosnian war ended, say a mining revival would have knock-on benefits.

“Concession fees, once they start fully pouring in, will nearly double the municipal budget,” Vares Mayor Zdravko Marosevic said. “The opening of a mine comes with the creation of new jobs in many accompanying sectors.”

Mining also brings nervousness about possible negative impacts in Bosnia’s rustic mountains.

Kruno Ridjic, a Vares municipal councillor and retired mechanical engineer, said he was closely monitoring the company’s environmental policies.

“This is the first time that a company takes care about the soil, water, air quality,” Ridjic told Reuters.

Reporting by Daria Sito-Sucic; editing by Barbara Lewis