Serbia to restart production of Zelezara Smederevo steel mill.

By bne IntelliNews March 4, 2013
Serbian steel mill Zelezara Smederevo will restart production within a month even though the government failed to find a new owner and investor for the troubled company, finance and economy minister Mladjan Dinkic was quoted as saying on the ministry's website. He said that one of the plant's blast furnaces will be restarted after production was closed down in the summer of 2012 due to the lack of row materials. Furthermore, earlier this month Russian state-owned machine-building company Uralvagonzavod (UVZ) gave up its plans to buy Zelezara and left the government in Belgrade seeking alternative options on solving the problems of one of the country's biggest exporters and employers. Dinkic said Serbia is open to talks with any new investors interested in the company. He met representatives of Zelezara's trade union and management on March 1, saying all 5,200 workers will go back to their jobs once the plant restarts production and further 250 employees will be hired. The government intends to use the proceeds from previous sales to buy raw materials and pay workers 80% of their salary to return to work, Dinkic said. The activation of the furnace will start on March 4, and production is expected to be relaunched within a month. The estimated cost of restarting production in the steel mill is USD 165mn. Dinkic also expressed the hope that the relaunch of production will attract a strategic partner. The Serb state bought back Zelezara from US Steel for a token price of USD 1 at end-Jan 2012 but has halted its production since July 2012 because the company was unable to cope with the unfavourable global market prices and the lack of raw materials.

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