Džindić: FBiH Government stands by Aluminij workers, seeking strategic partners

(Patria) - Federal Minister of Energy, Mining and Industry Nermin Džindić held a press conference in the Government building in Sarajevo, where he spoke about Aluminij Mostar, which was shut down at midnight after being disconnected from the power grid.

The Minister said that the FBiH Government stands by the workers and expects information from the Supervisory Board and Management on the shutdown procedure.

“We followed the situation and were in contact with the Management and Supervisory Board. We immediately sent a request for the Management and Supervisory Board to inform us in writing whether everything was done legally and what the condition of the facilities is after the power outage.

We are also requesting information on all payments to suppliers since the beginning of the year, so we can examine why payments to EP HZHB were not made,” said Džindić.

Information on the impact of Aluminij’s shutdown on the local community is also being sought.

“We stand by our commitment to take care of all workers who are eligible for retirement. The FBiH Government will help workers to have their service recognized and retire deservedly. We will continue discussions with potential strategic partners. I do not believe that the suspension of operations or bankruptcy proceedings will change the intentions of potential investors. They are aware that the current way of operating Aluminij is impossible,” said Džindić, adding that it is unknown how much restarting production at Aluminij would cost.

“If we had a magic wand and settled all debts before midnight last night, the third shift would already be making a loss. This model of Aluminij’s operation was unsustainable,” Džindić added.

He stated that Aluminij’s current business model cannot continue and concluded that a self-sustaining model must be found.

When asked by journalists how the situation with Aluminij would affect the economy in the FBiH and the country, Džindić said that no one currently has such data.

"We asked the management and the Supervisory Board to include an assessment of the impact on the local community in their report. The information they have and the prices they pay to Elektroprenos, the Tax Administration, and all other funds are within Aluminij. I hope this information will be available by tomorrow, and then we will share it with you," replied the relevant minister.

According to him, the issue is no longer whether Aluminij knows how or can produce, but whether it can produce under market conditions.

"Any serious investor will conduct an analysis and develop a model by which the company will generate profit. Everything else must be cut, whatever that may mean," concluded Džindić.

When asked what would happen to Aluminij’s debt to Elektroprivreda HZHB, Džindić said that there would be no debt forgiveness, but he did compare the contracts that this company signed with Elektroprivreda HZHB and Elektroprivreda BiH. 

Aluminij paid Elektroprivreda HZHB significantly more for electricity, but Džindić says that in both cases, it operated at a loss and that electricity is not the only problem.

In recent years, Aluminij has been operating at a loss, and the company’s total debt is almost 400 million marks, of which more than half is for consumed electricity.

On Tuesday, Aluminij workers blocked the M-17 main road in Salakovac, north of Mostar, for almost five hours, and slightly earlier, they blocked the southern approach to the city in protest of the company’s collapse.

Aluminij employs around 900 workers.

Earlier, the Trade Union accused the Management of poor company leadership, as well as high salaries for Management members, even though Aluminij had been performing poorly for some time. Workers also gathered in front of the HDZ building in Mostar on Wednesday.