Ljubija mine new point of dispute in RS

Ljubija mine new point of dispute in RS

While RS National Assembly was supposed to discus the sale of RS stake package, about 65 percent, of Ljubija mine to Israeli Investment Group – Overseas Inc, the Trade Union representatives demand more guarantees for their work places. This case, in the last few days, has became another point of dispute between opposition and ruling coalition in this BiH entity. It is interesting that the sale of Ljubija mine would have a great impact on work in Zenica steel plant.

The problem is that the other part of stake belongs to one of the biggest global steel maker, ArcelorMittal. This company is one of the biggest investors in BiH and expressed an interest in acquiring the 49 percent stake in the ore mine held by Ljubija for several years. Together with Ljubija, it jointly owns the ArcelorMittal Prijedor ore mine, where it holds a 51 percent stake. RS Government several weeks ago decided to sell the stake in the open pit in Ljubija mine to the Israeli company for  92 million BAM (47 million Euro), after it outbid ArcelorMittal’s offer. Despite the Trade Union demand, RS minister of energy and mining, Petar Djokic, who noted that ArcelorMittal violated the contract in many cases and that RS doesn’t have an intention to sell its stake package to this company and to “observe the further collapse of the company and mining fields”.

The deal with the Israeli company is facing objections from the opposition and their fears that this would mean an end to relations with ArcelorMittal.

“Unfortunately, implementation of this deal with Israeli company would inevitably lead to large-scale job losses in Prijedor, and also in the Zenica steel plant, where production would be switched to using Electric Arc Furnace, which requires no iron ore”, announced the company.

They add that, in case of a contract with Israeli company, ArcelorMittal will abandon planned investments worth over 120 million BAM (about 61.4million Euro) in the integral production based on iron ore in Zenica and that the company would “take all appropriate actions to protect the interests of its shareholders and employees, including action in the appropriate international courts if necessary”.

Djokic explained that the Israeli company, in its offer, gave more guarantees for better development of the Ljubija mine and the other companies linked with it. This company also stated in the offer that financial deals would be solved with ArcelorMittal and that the company will keep the number of employees. Moreover, they added that the company will open more than 300 working places in next three years. He accused Arcelor Mittal of breaking production in Ljubija mine where the company begun to produce mashrooms.

But Lakshmi Mittal, the owner of ArcelorMittal, sent the letter to BiH Presidency, BiH Council of Ministers and RS government saying that the completion of the deal would have a very negative effect on the entity’s economy.

Since 2014, ArcelorMittal has invested over 150 million euro in the modernisation of the Zenica plant in BiH Federation, which has been out of operation since the beginning of the war. Recently, the company launched three new investment projects worth more than 12 million euro. The Zenica plant provides jobs to 2,400 employees, and is engaging around 300 local companies as subcontractors or suppliers. On the other side, the Ljubija mine have an estimated capacity of  347 million tonnes of oxite and carbon reserves. The war halted production, which was resumed 12 years later when ArcelorMittal signed a strategic agreement with the mining company to set up a new company to run it.

The Ljubija case caused further dispute between opposition and ruling coalition in RS. Even RS president, Milorad Dodik, came in RS NA to address the media in the loby and to say that „ MPs who vote against deal with the Israely company are bribed by ArcelorMittal“. He also accused the opposition that their wish is only to force the RS Government to resign.

The reality is that, for opposition parties, gathered in “Alliance for changes” coalition, this case is one of the main reasons for the demand for RS government resignation. The demand was officially submitted on Monday and opposition demands a special session of RS National Assembly to discuss the parliamentary support to the RS Government./IBNA