Bosnia's Aluminij again faces the risk of closure over debt to EPHZHB utility

Aluminij Mostar, an aluminium smelter located in Bosnian is facing the risk of closure again after the electric supply to the smelter was proposed to cut off by a state-owner electric supply company due to its increasing debt.

In late March, EPHZHB, the power provider failed to collect nearly 100 million Bosnian marka, an amount that the Aluminij smelter had to pay for their electric supplies by signing a bank guarantee.

"We have not succeeded to cash anything, they have no money," EPHZHB spokesman Mario Fofic said.

"Unless they come up with a new plan to pay the debt by April 24 we shall be forced to halt the delivery of electricity," Fofic said over the phone from the southern town of Mostar, the base location of the smelter and the utility.

Aluminij Mostar could not be reached for comment.

In the last seven months, this is the second time that Aluminij smelter is facing a closure due to its debt to EPHZHB. In 2013 October, after the government had intervened with a debt-settlement deal the smelter was able to avoid the shutdown.

Under the deal, the smelter had to pay a debt of 40 million marka in ten monthly instalments from February.

"The biggest problem for us is that they are not servicing their monthly bills," Fofic said. The debt rose to 99 million marka in April, he said.

"Our operation and liquidity are at stake now because Aluminij accounts for about 50 percent of our total sales."

Due to high electricity price and decline in aluminium prices since the last 3 years, the smelter has faced a lot of trouble.

Last June, Bosniak-Croat federation, had taken over 44% of the smelter and promised fresh subsidies to stave off a future closure.

According to fofic, the Federation government, the owner of 90% of EPHZHB utility, has already been notified about the plan to cut power supplies to tise smelter and has pledged to make an effort to help the smelter continue its operations.

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