SERBIA: Kosovo nickel plant officially begins production again after nearly nine years of sitting idle after bombing

The Ferronikeli mining and smelting complex in Kosovo officially began production on Wednesday (September 12) after eight years sitting idle, in a rare boost to the disputed territory's stagnant economy. The sale of the complex in November 2005, for 30.5 million euros, represented the largest single private investment in Kosovo since the United Nations took control of the breakaway Serbian province after the 1998-99 war. It has an estimated 13 million tonnes of nickel ore -- used to produce steel -- in three open-pit nickel laterite mines. The first production line began working at full capacity on Wednesday after several months of testing. The second line will start work from January 1, officials said. IMF/Alferon has had to do extensive repair work on damage from NATO bombs dropped on the site during the Alliance's 11-week air war in 1999 to drive out Serb forces. The project has also been plagued by labour protests and electricity shortages. Its new owner, a Zurich-based consortium of International Mining Resources (IMR) and the Alferon management company, estimates the mine can produce between 10,000 and 12,000 tonnes of nickel per year. "In this area the nickel we have in existing deposits, it is not so much. It is, let's say, ten more years or maximum thirteen, but in the meantime we are going to investigate and find new deposits, so that we continue the operation. And in any case if local ore, are not sufficient, we have to import ore," the mine's general manager, Kostas Lamntos, told Reuters. The UN says Kosovo's mineral wealth is a future source of prosperity. Unemployment in Kosovo is estimated at around 50 percent, and the average wage just 150 euros per month. "We will now see a surge in exports from the nickel products here from this factory, and it will significantly improve the balance of trade in Kosovo," said Joachim Ruecker, head of UN administration in Kosovo. IMF/Alferon says it has created 1,000 direct new jobs for the impoverished Glogovac region of central Kosovo, plus another 500 sub-contractors. UN officials say the export potential for Kosovo is around 500 million dollars per year. The West and Russia are deadlocked on the fate of Kosovo, where 2 million Albanians demand independence and are threatening to strike out alone this year. Its limbo status and uncertain future have deterred foreign investors. Kosovo is rich in nickel and lignite, and UN officials say the mining sector has the potential to create 35,000 jobs and attract 1.8 billion euros in foreign direct investment.

ITN Source | September 14, 2007

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