ECONOMY

Serbia’s sole copper firm wants to become profitable by 2006

BOR, Serbia and Montenegro – Serbia’s sole copper firm, struggling to recover from a decade of hardship, hopes new investments and concessions to Western firms will help it to become profitable again in 2006. Borivoje Stojadinovic, head of the loss-making Rudarsko-topionicarski Basen Bor (RTB Bor) mining and smelting group, urged the government to back the recovery plan by speeding up restructuring and privatization of none-core assets. «The copper line needs around $35 million over the next two years to buy new equipment and raise and stabilize copper in concentrate monthly output at 3,000 tons, which would make us self-sufficient,» he told Reuters this week. «But to achieve our plans and reach profitability we need the government’s help,» he said at company headquarters in the eastern town of Bor. RTB Bor is a sprawling group of 18 firms that was run down during the turbulent rule of ex-president Slobodan Milosevic, whose government used the proceeds from selling its copper and gold to buy social peace in the impoverished state. The mining complex, with $400 million of debt and outdated equipment, is now controlled by the reformist government that toppled Milosevic in late 2000. Stojadinovic said the plan to put the company back on its feet was realistic because a new ore transport system in the underground Jama pit would boost output there. He said exploitation of the small but rich Coka Marin copper deposit was expected soon and that it was forecast to bring $7 million in profit during two years of operation. «These steps are good but insufficient. Our overall operations over the next two to three years could provide $17 million. But we need the state’s help for the rest,» he said. The government is already subsidizing copper production with up to $350 per ton to help RTB Bor stay afloat as it prepares to spin off non-core operations in preparation for privatization, hoping to attract much-needed foreign investment. RTB Bor hopes to boost monthly copper in concentrate output from its mining firms Borski Rudnici and Majdanpek to more than 2,000 tons next year from up to 1,400 tons now. «Once we double the output, we could cover our costs and be capable to start repaying our debt,» Stojadinovic said, adding that lack of cash hampered exploration of deposits in Borska Rijeka, Crni Vrh and Juzni Revir, which have the attracted interest of Rio Tinto Plc and US Phelps Dodge.