Bosnia's only aluminium smelter, the Mostar-based company Aluminij, was disconnected from the power grid at four minutes past midnight early on Wednesday, effectively closing the company 40 years after its establishment and after it racked up a €200 million debt - about half of it for electricity bills.
The largest company in the Croat-dominated Hercegovina region of the country, Aluminij employed some 900 workers and had annual revenues of some €160 million, making it one of the country’s top exporters.
The company’s largest shareholder is the Federation of Bosnia and Herzegovina (FBiH) government, i.e. the government controlling the Bosniak-Croat half of the country, which holds a 44 percent stake. Another 44 percent of the stock is held by workers, and the remaining 12 percent is owned by neighbouring Croatia.
On Monday, a last ditch attempt to keep Aluminij in business fell through as negotiations between the FBiH government and the Swiss commodity giant Glencore failed to produce an agreement on Glencore’s potential investment, which management hoped would provide a lifeline to the debt-ridden Aluminij.
According to the Zagreb-based business daily Poslovni Dnevnik, Glencore conditioned its investment on the agreement of FBiH government to supply electricity at a subsidised price to Aluminij via its government-owned power board. The FBiH government reportedly refused, effectively sending the company into shut down.
After the negotiations fell through, Aluminij workers had staged two protests on Tuesday which blocked the main M-17 road passing south of Mostar, demanding talks with ethnic Croat officeholders from the FBiH government. After their protest caused large gridlocks, the protesters were removed by special police units.
Established in 1981 and relying on the local bauxite mining industry, the company had been in operation ever since, save for the period between 1992 and 1997 due to the Bosnian war.
(€1 = 7.38 kuna)
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