US says it advised energy firm NGP to contact Kosovo not Serbia on Trepca mines

By bne IntelliNews May 21, 2013

US State Department said it has advised US energy firm New Generation Power (NGP) to contact the Kosovo government regarding the investment it plans in mining and metallurgical complex Trepca – a company that used to be an industrial giant in the times of former Yugoslavia, the US embassy in Pristina reported in a statement on May 20.

The statement comes after on Friday, May 17, NGP and the Serbian government signed a business and technical cooperation agreement on new investment in the Trepca complex that aim to raise its output and quality and create new jobs. The exact value of the investment would be determined following the completion of a feasibility study, which drafting should begin in the coming weeks.

The Kosovo privatisation agency, however, called this deal “illegal” a couple of days later because, it said, the agency as the sole legal representative of Trepca was not informed about it. Therefore, it said the government in Pristina would seek an explanation from the US embassy in Kosovo on NGP’s planned investment in the mining complex.

“While the US Embassy in Pristina has not engaged with New Generation Power, State Department officials in Washington advised New Generation Power that Kosovo is a sovereign country and that the government of Serbia has no jurisdiction over the Trepca mine complex,” the statement of the US authorities said.

They added that their practice is to advise any US company pursuing a business transaction in Kosovo to discuss it directly with the government of Kosovo.

The disputes around the investment originate from the confusion in the ownership of the Trepca complex. Serbia, which refuses to recognise Kosovo’s independence, says the company continues to be under its control and jurisdiction. Kosovo, on the other hand, says it is in charge of all state companies on its own territory.

Furthermore, the complex’ most valuable assets – the mining resources, are located in Mitrovica, northern Kosovo – a region still divided along ethnic lines with the north belonging to the Serbs and the south to the Albanians.

The ownership confusion has made very difficult the functioning of the some 40 mines and factories, which the complex includes. It exists for more than 85 years and used to employ 25,000 workers in its heydays. The company’s recent history, however, is marked by financial difficulties and it has been under restructuring.

A ray of light comes from the historic deal signed by Serbia and Kosovo last month on normalising their relations in all social and economic spheres. Once the two sides also agree on how to implement the deal, the chances for solving Trepca’s fate and attracting new investment for its revival will seriously increase.

Kosovo is considered to be among the top five countries in the world in lignite reserves, which total 14.7 million tonnes, according to past estimates of the country’s minerals and mining committee. Still, these reserves remain locked underground for the time being and apart from massive investments Kosovo will need the power of reconciliation with Serbia in order to bring them to the surface. 

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