Belgrade fears Kosovo attempt to take over mine complex

By bne IntelliNews January 19, 2015

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Kosovo is on the verge of passing a new law on public enterprises that would pave the way for Pristina to take over the giant Trepca mining complex, which is also claimed by Serbia. The move could lead to unrest in the Serb-dominated area around Trepca, and Serbian Prime Minister Alexandar Vucic has warned that it poses a serious threat to attempts to normalise relations.

The draft law amending existing legislation on public enterprises has already been approved by the Kosovan government and is due to be debated at a plenary parliament session on January 19.

If adopted, this would open the way for the Trepca Mining, Metallurgical and Chemical Combine to be removed from the control of the Privatization Agency of Kosovo (KPA) and placed under the control of the Kosovan government, Prime Minister Isa Mustafa said on January 16, according to Reuters.  

Hashim Thaci, Kosovo’s former prime minister, now Minister of Foreign Affairs and Deputy Prime Minister,  has also outlined Pristina’s plans on his Facebook page, writing in a statement republished by Trepca that decisions on Trepca’s future “will be based on concrete strategies that reflect economic interests and the interests of the state of Kosovo”. Following the adoption of the new legislation, “this enterprise will be removed from KPA powers”, he added.

Trepca was one of the largest companies in Yugoslavia. While the bulk of its resources were in modern day Kosovo, where lead and zinc mines, smelters and processing facilities are located, it also spanned parts of what are now Serbia and Montenegro.

Most of the vast complex has been inactive since Kosovo’s war of independence from Serbia in the late 1990s, and has fallen into disrepair. If production were to restart - only possible with substantial investment - it could potentially lift the Kosovan economy. However, with Serbia also claiming ownership of Trepca, the complex was placed under the control of the UN-created KPA.

Both Serbian Prime Minister Alexandar Vucic and Trepca general manager Jovan Dimkic have spoken out against Pristina’s plans. Speaking on January 16, Vucic has warned of the threat that a unilateral decision by Kosovo to take over Trepca poses to the ongoing dialogue between Belgrade and Pristina. "I have been working on this today, and I will be working on it tomorrow too. None of us will sleep until Monday," Vucic told journalists, Serbian broadcaster B92 reported.

Meanwhile, Dimkic told a press conference that if the law is adopted by the Kosovan parliament, this risks destabilising the situation in the volatile Kosovo-Metohija region of northern Kosovo in addition to putting the implementation of the Brussels Agreement on normalising relations in jeopardy. "The adoption of the law on public enterprises will alter and drastically aggravate the complete economic, social, and security situation and the overall political situation in Kosovo, with unforeseeable consequences," Dimkic said.

The situation is further complicated by Trepca’s outstanding debts, mainly to Serbian state-owned companies. As of mid 2012, these were estimated at €206mn, with a further €41mn owed to other foreign companies, mainly from Greece. Serbian daily Vesti reported in 2014 that its largest creditors are the Serbian Energy Corporation and Serbian Railways.

Kosovo broke away from Serbia after a war of independence in 1998-1999, in which more than 10,000 died. The newly formed republic’s population is mostly ethnic Albanian, but many Serbs consider it to be an integral part of Serbia. So far, Kosovo has been recognised by 108 countries worldwide, but Serbia remains adamant it will not recognise its former province and Russian support for Belgrade’s position has so far kept Kosovo out of the UN.

Despite the deep divisions over Kosovo’s status, with both Serbia and Kosovo aiming for EU membership, there is a strong incentive for both to work towards a peaceful solution. Under the 2013 Brussels agreement brokered by the EU, the two countries agreed to work towards normalising relations. Brussels has made integration with the EU and eventual accession for both Serbia and Kosovo contingent on this process. However, there is some ambiguity over whether Brussels is looking to Belgrade to recognise Kosovo, or whether a softer option would be acceptable.

Serbian president Tomislav Nikolic said on January 5 that the European Union must not make Belgrade's recognition of Kosovo a precondition for Serbian accession to the bloc. “My position is clear and absolutely unchanged - we should be in the EU, and join the Union proudly. My position is that giving up on Kosovo-Metohija must not be a condition for joining the Union," Nikolic said.

Nikolic’s stance is in tune with that of most of the Serbian population - a survey by Faktor Plus, published by Serbian daily Danas, found that 86% would not accept the recognition of Kosovo as a condition for EU membership.

However, since the deal was signed, there have been some moves towards normalisation. Vucic visited majority Serbian areas of Kosovo on January 14 on what was tentatively described as a historic step. Although the visit, to mark Orthodox New Year, did not include meetings with members of Kosovo’s central government, Vucic urged the country’s ethnic Serb minority not to emigrate, and promised funding for infrastructure. The visit was largely peaceful, except for a minor incident when a group of  ethnic Albanians kicked Vucic’s car.

Aside from the Kosovo issue, Serbia has made steady progress on its path towards EU accession in the last year. The accession negotiations process was formally launched in January 2014, and at a joint press conference with British Foreign Secretary Philip Hammond on January 15, Vucic said he believes that the first negotiating chapters for Serbia’s EU accession will be opened soon.

While the issue of Kosovo was not stressed during the press conference, Hammond said that the most important step for the opening of the first chapters was the implementation of the Brussels agreement.


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