Bosnia¡¯s Federation Government gives six months¡¯ time to Aluminij to prepare rescue plan

According to a report on Monday, July 15, Bosnia’s Federation Government has decided that Aluminij Mostar will continue operating for the next six months and should come up with a rescue plan during that period.

The problem with Aluminij’s power supplies, however, remains unresolved. On July 10, the smelter closed down its operations after being disconnected from the power grid due to huge debt of about 280 million marka to the state power utility.

"The company will be able to exist in the next six months and nobody will be able to block its accounts or launch bankruptcy proceedings,” Zdenko Klepic, the head of Aluminij's supervisory board, said after a meeting between the leader of the Croatian Democratic Union of Bosnia and Herzegovina (HDZ BiH) party Dragan Covic, the Federation's finance minister Jelka Milicevic, Aluminij's management and supervisory board, and trade unions.

Following the meeting, an emergency committee is formed with government officials and representatives of the company’s management and workers, headed by Klepic, to prepare and implement rescue measures.

Aluminij Mostar for many years has been into persistent trouble over high prices of electricity and aluminium ore, with a total debt of 380 million Bosnian marka.

The shutdown on July 10 followed a failed attempt to find a strategic investor for the company. London-listed miner and commodity trader Glencore also backed out from a possible takeover of Aluminij Mostar.

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