The government of the Croat-Muslim Federation in Bosnia and Herzegovina on Thursday rejected a business offer from an Israeli-Chinese consortium led by MT Abraham Group for a possible lease of the Mostar-based Aluminij aluminium smelter, urging the group to propose a new model for cooperation.

The federation’s Prime Minister Fadil Navalic informed the consortium of the reasons for the rejection of their offer.

The government said that it could not subsidise the generation of electricity for the Mostar factory, as requested by the bidder.

The consortium, comprising MT Abraham Group, China Engineering Corporation and China Industrial of Engineering and Construction Co. Ltd, demanded subsidised electricity prices and other advantages.

Aluminij’s biggest stakeholders are the Federation entity government and small shareholders, each holding a 44% stake, while Croatia’s government holds 12%.