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Duferco to meet Montenegro's PM Spajic over EPCG Zeljezara

Jun 17, 2024, 2:08:45 PMArticle by Iskra Pavlova
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June 17 (SeeNews) - A delegation of officials from Luxembourg-based Duferco Group will arrive in Montenegro on June 20 to meet prime minister Milojko Spajic and discuss options for troubled steelworks EPCG Zeljezara Niksic, the energy ministry said.

Duferco to meet Montenegro's PM Spajic over EPCG Zeljezara
Rolled steel Source: Ussuri Capital

The talks will focus on the prospects of launching new production units at EPCG Zeljezara and creating conditions for the opening new jobs, the energy ministry said in an emailed statement in the weekend.

Last week, local media quoted energy minister Sasa Mujovic as saying that the government is evaluating the proposals of Duferco and of Swiss-registered company 8B Capital for the future of EPCG Zeljezara. Duferco is proposing to run EPCG Zeljezara in a strategic partnership with the Montenegrin government, asking the Montenegrin side to invest some 125 million euro ($134 million) in a five-year period, according to a report by news service eKapija.

The government should make a decision on the offers by June 28, when EPCG's shareholders will hold a meeting on EPCG Zeljezara, according to Mujovic.

He was quoted as saying that a third offer, submitted by a Turkish company called Enec, was dismissed as inadequate because Enec asked not to lease EPCG Zeljezara but to purchase it outright, along with being awarded a concession for the planned Krusevo hydropower plant and other facilities.

In April, state-controlled power utility EPCG said it was inviting all interested parties for individual negotiations on leasing the steelmaking and forging facilities of its subsidiary EPCG Zeljezara Niksic, after two unsuccessful attempts to find a partner to the troubled steel mill.

8B Capital, owned by Russian businessman Igor Shamis, was the sole qualified bidder in the two failed tenders for leasing EPCG Zeljezara's production assets earlier this year. However, its offers were turned down by EPCG both times due to a failure to provide bank guarantees and pay the required deposit.

Duferco operates in steel production and distribution, energy trading, shipping and logistics, and engineering. It is the majority owner of steel mill Makstil in neighbouring North Macedonia.

EPCG acquired Zeljezara Niksic from Turkey's Toscelik for 20 million euro in December 2022.

Located in the western city of Niksic, EPCG Zeljezara has two 60-tonne electric arc furnaces that can produce an estimated 300,000 metric tonnes of crude steel per year.

($ = 0.936 euro)

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