Bosnia Aluminij to end '11 with small profit

Bosnia's sole aluminium smelter, Aluminij Mostar, will post a small profit this year and expects a loss in 2012 due to lower prices on the world market, General Manager Ivo Bradvica said on Thursday.

"The profit will not be high and I can only say that we shall end the year positively," Bradvica told a year-end news conference in the southern town of Mostar. "We forecast a loss for next year."

Bradvica said the company posted a profit of 4.5 million Bosnian marka ($3 million) in the first half of the year but was hit in the last quarter by a fall in aluminium prices. It had a loss of 13.4 million marka in 2010.

"The price of the metal in September hit its lowest level in 15 years while the prices for power and raw materials remained the same," he said. "A loss next year will be inevitable."

He said he expected the Balkan country's top exporter to maintain 2012 output at this year's 160,000 tonnes level.

"We plan to produce 129,000 tonnes of primary aluminium and 30,000 tonnes of finished aluminium products next year," Bradvica said. This is the maximum output under existing capacities.

But he said the smelter, which is the largest producer of aluminium in the Balkans, should complete an upgrade of its foundry in 2012 which should boost annual output by an additional 30,000 tonnes from 2013.

Aluminij signed a 7 million euro ($9.13 million) deal with Austrian firm Hertwich Engineering GmbH to buy a new melting and casting furnace, for which its long-time partner Glencore International has provided the banking guarantees.

It has also regained control of its 20,000 tonnes per year alumina storage in the Croatian port of Ploce - out of its control since 1992 when the Bosnian war broke out - which should help cut transportation costs for raw materials.