CEOL
UN to start lengthy repairs of Kosovo mine complex

MITROVICA, Aug 15, 2000 -- (Reuters) The United Nations said on Monday it would take one to three years of repairs before Kosovo's dilapidated Trepca mine complex could produce commercially viable quantities of metals.

NATO-led peacekeepers seized control of Serb-held parts of the Trepca group on Monday for the UN, which runs Kosovo as a de facto protectorate, to enable it to shut down the Zvecan smelter which it said was polluting the air with lead fumes.

But the seizure of Zvecan, part of the Trepca group, has also finally given the UN control of the entire complex and allowed it to hire a consortium of mining companies to begin a revamp of the mining and metallurgy industry in northern Kosovo.

"Now we can get to work to bring Trepca back to life, and back to the people of Kosovo," said the head of the Kosovo U.N. mission, Bernard Kouchner.

Some USD 16 million of aid money from the EU, United States, France, Italy, Holland and Sweden will pay for the work of ITT Kosovo Consortium Ltd, a joint venture of TEC-Ingenierie of France, Sweden's Boliden Contech and Morrison Knudsen International of the United States.

Trepca comprises 14 mines yielding lead, zinc, gold and silver, plus nine flotation plants, two metallurgy plants and 14 factories. All facilities are in very poor repair, with many of them almost derelict.

An earlier UN-commissioned study judged that parts of the mining complex could be made safe and economically viable with sufficient investment and Italian engineers have already done emergency work to prevent one of the larger mines from flooding.

The ITT Kosovo consortium will assess what facilities can be rescued and what needs to be done to restart production. But Bernard Salome, Kouchner's chief economic adviser, warned it might be as much as three years before significant output appeared.

OUTPUT FORECASTS EXAGGERATED

Trepca's once prodigious output of lead, as much as 90,000 tons annually before the break-up of Yugoslavia, has dwindled to almost nothing over the last decade, with production halting when NATO's 78-day bombing campaign starting in March 1999.

Serbs fled most of Kosovo when NATO troops entered and they became victims of revenge attacks by ethnic Albanians but clung on in the northern Mitrovica area around Zvecan.

With Belgrade eager for the hard currency to be made from selling lead in Europe, Serb managers restarted production in June. But local mining experts said the Zvecan plant had been running at below 10 percent capacity.

"The average capacity utilization in lead metallurgy and refinery has been below 10 percent, more precisely it stood at around 6.0 percent since the beginning of the year," Desimir Petkovic, a former Trepca manager, told Reuters.

In February, the head of the Trepca mining and smelting complex, Novak Bijelic, was quoted by official Yugoslav news agency as saying Trepca would produce 46,500 tonnes of lead, 25,000 tonnes of silver and 100 kilograms of gold this year.

But international traders, who spoke under condition of anonymity due to various international financial sanctions, said there was no way the smelter could have achieved that goal.

"It's wishful thinking. They would need between 70,000 and 100,000 tons of concentrate depending on the quality of the ore. There is no chance they could have obtained it without us knowing it," one trader told Reuters.

In 1998, the year before Belgrade let slip its grip on its rebellious ethnic Albanian-dominated Kosovo province, Trepca produced some 40,000 tons of lead. (with additional reporting by Gordana Filipovic in Belgrade).



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