ArcelorMittal warns Bosnia over mine sale
The steel maker is challenging the sale of a stake in Ljubija iron ore mine to rival bidder Israeli Investment Group
ArcelorMittal, the world’s largest steel producer and parent company of ArcelorMittal SA, has warned Bosnia’s authorities it is ready to take legal action to protect its ownership rights if a government-owned stake in the Ljubija iron ore mine is sold to a rival bidder.
ArcelorMittal owns a steel plant in the central Bosnian town of Zenica, where it processes iron ore from the mines it owns in Prijedor in the north of the country.
It also owns 35.1% in the nearby Ljubija iron ore mine, while the government of Bosnia’s autonomous Serb Republic has a 64.9% stake in the mine, which has been put up for sale.
The steel maker has made a bid to buy out the government’s stake in the mine, but the government has decided to sell it to rival bidder Israeli Investment Group (IIG).
The regional parliament is expected to decide on the sale on Tuesday.
ArcelorMittal chairman and CEO Lakshmi Mittal had sent a letter to the Serb Republic government in which he "emphasised the very serious negative impacts for jobs and the economies of both Prijedor and Zenica" if the proposed sale of the Ljubija mine stake to IIG was confirmed, the company said.
"The letter also gave notice of our intention to protect our contractual rights by all means possible, if necessary through legal action in the appropriate international courts," the company said in a statement.
Serb Republic President Milorad Dodik, who supports the sale to the Israeli group, said he had not yet received the letter and declined to comment. IIG was not available to comment.
ArcelorMittal Zenica CE Biju Nair has said if the Ljubija mine was sold to a rival bidder, the Zenica plant could switch to a different production system which would not be suitable for the iron ore from Ljubija and this would lead to job losses at Prijedor and Zenica.
IIG, which was presented as an "Israeli-Russian-Kazak-African investment group" by its director Evgenij Zotov, has offered 92-million marka ($51m) for the stake and pledged a 65-million marka investment over the next three years.
ArcelorMittal has offered 63.6-million marka and investment of 63-million marka over the next 10 years.