SARAJEVO (Bosnia and Herzegovina), March 5 (SeeNews) - Switzerland's Glencore, a long-term client of Bosnia's ailing aluminium producer Aluminij, is supporting the efforts of Israel's M.T. Abraham and its Chinese partners to take under long-term lease the production assets of Aluminij, local media reported.
Glencore has sent a letter of support to M.T. Abraham, news portal Dnevnik.ba reported earlier this week, quoting unnamed sources close to Bosnia's Federation government and attaching a photo of the letter.
"As in the past, Glencore International AD will continue to maintain close business relations with Aluminij d.d. Mostar, under the operation and management of the M.T. Abraham Group S.A., and we will do our utmost to support your efforts and assist the success of Aluminij d.d. Mostar in the future," Glencore said in the letter.
According to earlier media reports, M.T. Abraham Group has said its representatives will visit Bosnia in the first days of March to hold talks on their leasehold plans for ailing Aluminij with the government of Bosnia's Federation entity.
On February 21, the majority of Aluminij's shareholders including the Federation government voted against the latest proposal sent by M.T. Abraham and its Chinese partners for a long-term lease of Aluminij's production assets, saying the document contains legal and technical errors.
Following the vote, M.T. Abraham said its management and its legal team will arrive in Mostar, where Aluminij is based, to discuss the government's comments on their proposal.
The Federation's government controls 44% of Aluminij, followed by the government of neighbouring Croatia with 12%, with the remainder held by smaller shareholders. The Federation is one of two autonomous entities forming Bosnia and Herzegovina. The other one is the Serb Republic.
In December, M.T. Abraham said that together with its partners, China Machinery Engineering Corporation (CMEC) and China Nonferrous Metal Industry’s Foreign Engineering & Construction (NFC), it has submitted a second and final proposal for leasing Aluminij's production assets, which was revised and amended to take into account the remarks of the Federation government on its original proposal submitted in October and rejected by the entity's government.
M.T. Abraham has noted that its primary objective is to reactivate and stabilise the existing smelter operations, introduce new operational efficiencies, open a new modern production line and enhance management practices in order to ensure long-term stability and profitability.
Aluminij shut down operations in July after its power supply was cut off due to swelling unpaid bills. Following the shutdown, the Federation's government decided that Aluminij should continue to operate and come up with a rescue plan by the end of 2019.