Trepca undermines Serb-Kosovan reconciliation

Trepca undermines Serb-Kosovan reconciliation
The Trepca complex once contributed around 70% of Kosovo’s GDP.
By Clare Nuttall in Bucharest October 24, 2016

Kosovo’s decision to take the giant Trepca mining and metallurgical complex under direct government control has torpedoed the process of improving relations with former overlord Serbia.

Serbia, which also claims ownership of part of Trepca, reacted angrily and the latest round of Belgrade-Pristina talks in Brussels on October 20-21 ended without progress. Reportedly the Trepca issue overshadowed the topics actually scheduled for discussion, while the Kosovan side refused to allow it to be placed on the agenda, much to Belgrade’s frustration.

On October 7, Kosovo’s parliament passed a law on the ownership of Trepca, stipulating that the government will own 80% of the complex and its miners will own the remaining 20%. Previously, the complex had been under the administration of Kosovo’s privatisation agency, but the agency had no power to develop the complex, which has been mostly idle since the 1999 Kosovan war.

Pristina urgently wants to revive production at Trepca, which has some of the largest reserves of lignite, zinc and other minerals in Southeast Europe. With unemployment at 35% in the country, and as high as 60% among young people, the government cannot afford to let the giant complex, which once contributed around 70% of Kosovo’s GDP, continue to fall into disrepair. Minister of Economic Development Blerand Stavileci stressed this when he presented the draft law to the government on October 5, saying the aim was to open the way for investment.

Given the ownership dispute with Serbia, it’s unlikely that any investor would be willing to commit the hundreds millions of euros needed to get production going again; politician and former Trepca manager Oliver Ivanovic told RFE/RL in 2013 that least $650mn would be needed to overhaul the smelters and refineries. The only potential investor reported to have shown an interest recently is China’s Citic Heavy Industries, which sent a delegation to meet with Trepca managers in June 2015.

Back in January 2015, the Kosovan government tried a similar move, proposing a new law on public enterprises that would have paved the way to take over the complex. However, at that time Prime Minister Isa Mustafa removed the bill from the parliament’s agenda at the last minute, reportedly bowing to pressure from the international community. His decision to back down sparked violent protests in the Kosovan capital.

It’s not clear why this time Pristina decided to go ahead with the legislation that would inevitably disrupt the ongoing normalisation process. One theory is that the government wanted to seize the moment when Washington’s attention was distracted by the upcoming US presidential elections.

Key figures in the US State Department, including Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland, are Obama nominees who will be replaced after the election. Another is that Pristina is responding to its recent failure to secure visa liberalisation for its citizens, speculates Milan Nič, head of the European programme at the Globsec Policy Institute in Bratislava. As Serbia moves forward towards EU accession, with four negotiation chapters opened so far, Kosovo may also be trying to raise the price of further progress for Belgrade.

Too soft

Unsurprisingly, the move did not go down well either in Belgrade or with Serbs in Kosovo. Even before the law was adopted, Serb protesters gathered in Rudare, northern Kosovo, blocking a road through the town. Serbian members of the Kosovan government announced on October 9 they were suspending their work, and would only carry out activities that would improve the position of the country’s Serb minority.

Serbian Prime Minister Aleksandar Vucic did not respond immediately, giving rise to speculation he had consulted with EU officials before issuing a statement. He seemed surprised by the move, telling journalists “I don’t understand why the Albanians did this”, state news agency Tanjug reported. Vucic also said on October 11 that the Serbian government rejected the law but added that he was “ready for a compromise if others are ready too”.

Nič points out that Vucic and other Serbian government officials are in a difficult position as they try to balance their goal of EU accession with the need to not to appear too soft on Kosovo to voters (presidential elections are coming up next year). “In their minds they already did lots in the Brussels negotiations and they don’t want to be schemed by the Kosovan side. Vucic cannot be seen as weak on Kosovo.”

Others on the Serbian side were less measured. In a strongly worded statement on October 8, the head of Serbia’s Office for Kosovo-Metohija Marko Djuric, accused the Kosovan government of trying to “complete the ethnic cleansing of Serbs in Kosovo-Metohija”.

Matters were not helped by Albanian Prime Minister Edi Rama weighing in on the issue at the Belgrade Security Forum on October 13. “Trepca is a line in Kosovo’s territory, so what are you going to do, transport it to Belgrade? … They have to understand that Trepca is in Kosovo’s territory and that it belongs to the Kosovars,” Rama said.

This was criticised, including by Rama’s own Foreign Minister Enver Hoxhaj, who said in a television interview that Tirana should not interfere with the normalisation process.

According to Nič, while there may have been compelling arguments on the Kosovan side to resolve the status of Trepca, it was inevitable this would disrupt the normalisation process.

“From the Kosovans’ point of view they were doing the most sensible thing but they were touching the explosive issue of sovereignty. [The Serbian side] gave up de facto ownership of northern Kosovo in the Brussels agreement, and now they are holding on to symbolic things and one of them is Trepca … you are touching something like a nuclear option if you do that,” he told bne IntelliNews. “It was always obvious that the two sides would not agree.”

The eruption of the Trepca dispute has shone a light on the shortcomings of the EU-mediated normalisation process. The original 2014 deal and the subsequent package of agreements on specific issues such as telecoms and the creation of an Association of Serb Communities certainly represented breakthroughs. However, other vital issues - not only Trepca, but the wider issue of property, as well as Kosovo’s ambitions of EU membership - are not touched in the talks.

With politicians from both sides, especially Kosovo, under pressure from nationalists at home, making progress is already difficult. The talks may now need a rethink if they are to address such burning issues and result in a long-term solution to the deep-rooted conflict.