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ArcelorMittal's bid to buy stake in Bosnian iron ore mine rejected
ArcelorMittal`s application to bid for the Bosnian government`s stake in the Ljubija iron ore mine has been rejected over procedural issues, prompting the world`s largest steelmaker to warn of risks to the future of mining in the area.
ArcelorMittal owns a steel plant in the central Bosnian town of Zenica where it processes iron ore from its mines in Prijedor in the north of the country.
The government of Bosnia`s autonomous Serb Republic has a 64.9 percent stake in the nearby Ljubija ore mine, which has been put up for sale through the region`s bourse at a starting price of 69 million Bosnian marka ($40.3 million). Small investment funds own the remaining stake.
ArcelorMittal Group expressed an interest in buying the government`s shares through its ArcelorMittal Holdings AG division, 51 percent owner of its local subsidiary ArcelorMittal Prijedor, which has exclusive exploitation rights in the mines under a previous agreement with the government.
The group said it had submitted the necessary documentation, but its nominated company was rejected as a qualified buyer by the region`s Investment and Development Bank (IDBRS), which gave no reason for its decision.
"ArcelorMittal is disappointed with today`s decision of the IDBRS that jeopardises the long-term future of mining in the Prijedor area," the group said in the statement.
An official at IDBRS told Reuters ArcelorMittal Holdings AG did not meet the required criteria and that a new auction of the government stake would be announced soon.
($1 = 1.712 Bosnian marka)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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