
The government of Bosnia and Herzegovina announced its plans to offer stake in Aluminij d.d. Mostar aluminium smelter, which will be put up for sale by end of 2016, reported Goran Djukanovic on Aluminium Insider. The sale process forms a part of a privatisation initiative that was launched in 2007, involving five other companies. The Bosnian government had halted the drive despite a reasonably high level of interest shown by international companies. This is going to be the second attempt by the government to sell the aluminium assets at Aluminij.
However, unlike previously, this is going to be a tad difficult task for them as the smelter condition has deteriorated over the years due to poor management and escalating electricity cost which has led to rising debt for the smelter owners and lack of investment in recent times.
“We’re thinking about what to do with some loss-making companies, such as Aluminij, so we called the World Bank, and it will probably be privatised after the opinion of the World Bank," the Prime Minister of the Federation of BiH, Fadil Novalic said in a recent interview. Stressing on the urgency of raising money he added, “The sooner, the better ... we need money.”
Aluminij d.d. Mostar's 44 per cent stake is owned by the federal government, while the other 44 per cent is possessed by small shareholders, mostly present and ex-workers of Aluminij. The remaining 12 per cent stake is owned by the Croatian government, which invested when Aluminij was restarted after the war.
Aluminij has been exporting aluminium worth over €150 million per year. Its buyers list features names such as Glencore and TLM Šibenik. However, due to falling aluminium prices and high electricity costs (€ 51.5 /MWh in 2015), Aluminij has recorded recurring loss in recent years amounting to around €25 million in 2014.
In 2015, Aluminij produced 98,540 tonnes of primary aluminium, accounting for 75 per cent of total capacity, mostly in slab and billet forms along with some small quanities of aluminium ingots and wire. The smelter has a primary aluminium capacity of 130,000 tonnes and cast house capacity of 160,000 tonnes.
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