Montenegro’s EPCG Zeljezara gets three lease bids - report

The offers came from Swiss company 8B Capital S.A., a consortium made up of local company Neksan, China’s Universal Energy and Czech Energy & Industrial Management Advisory Services, and Swedish consortium Kvalitetsbygg Gruppen and Uber Nordic, local newspaper Vijesti reported.

8B Capital S.A. proposes to increase production by 30% by reducing costs and gradually increasing the workforce. Additionally, the company requests an option to extend the lease for another five years if it achieves its targets within three to four years, along with the possibility of purchasing the steel mill's facilities.

Neksan, Universal Energy and Energy & Industrial Management Advisory Services propose to lease the assets for a monthly fee of just over 30,000 euro ($32,500) for a period of 35 years. They also plan to invest 40 million euro within five years, with potential for additional investments. Additionally, they aim to produce green steel and electricity.

Kvalitetsbygg Gruppen and Uber Nordic propose investments totaling 100 million euro. They also want to achieve complete decarbonisation of production processes and transition to the production of green steel. The Swedish consortium plans to lease the factory for 15 years.

EPCG launched the public call to investors for the lease of the steel mill's capacities in December, aiming to preserve steel production at the troubled plant. Under the tender terms, the interested investor will be able to sign a five-year lease contract, with an extension option. The minimum monthly fee is set at 30,000 euro.

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.

$ = 0.9218 euro