Bosnia’s aluminium smelter Aluminij dd Mostar managed to agree on additional seven days of electricity supply to its plant. The company managed to find just enough money to buy as much electricity as the government of the Federation of Bosnia and Herzegovina (FBiH) entity said they need to find a solution.
The company reached a solution just 60 minutes before the Independent System Operator’s deadline to the state electricity transmission company Elektroprijenos BiH to cut the Aluminij company off the state electricity grid.
“We’re holding non-stop talks with our partners and suppliers. We managed to secure the functioning of our plant for another week, however, this is all ‘patchwork’ and our situation is extremely critical in the long-term,” Aluminij’s acting General Manager Drazen Pandza told reporters. “We have no financial liquidity and we’re unable to take the financial burden of these stock market conditions, namely, we’re unable to pay the record high prices of electricity and alumina.”
The company has been experiencing financial difficulties for years due to increasing production costs and low aluminium prices, and at the end of September, its debt was worth nearly BAM 350 million (around €170 million).
Instantly shutting the producer out of the power grid would ‘freeze up’ the liquid aluminium in electrolytic cells, which could cause explosions and threaten the lives of employees, the company said on Saturday.
According to Aluminij’s Independent Union, such a shutdown would be detrimental to the livelihood of thousands of people.
“Aluminij dd has 900 employees with families. There are also those who depend on us, who cooperate with us, our business partners, and it would mean a complete crash,” Aluminij’s Independent Union director Romeo Bioksic said in September.
In 2017, the company was Bosnia’s third-largest exporter with €171 million worth of exports. They are 44 percent owned by small shareholders, 44 percent by the FBiH government and 12 percent by the government of the Republic of Croatia.
The FBiH government made no comment on the latest development in the company.
(€1 = BAM 1.955)