Page:U.S. GEOLOGICAL SURVEY MINERALS YEARBOOK THE MINERAL INDUSTRIES OF THE BALKANS 9401000.pdf/4



The Former Yugoslav Republic of Macedonia (Macedonia) showed strong recovery from the economic downturn that followed the Kosovo conflict of 1999. The GDP increased by 5.1% compared with that of 1999. The industrial minerals and construction material branches of industry were major contributors to this rebound, which mainly was caused by demand generated by reconstruction efforts in neighboring Kosovo. Freer access to markets in the EU also helped improve the country's economic performance in 2000 (European Bank for Reconstruction and Development, 2001, p. 2-5). In 2000, industry and mining accounted for 21.1% of Macedonia's GDP. Compared with that of 1999, the increase in the total value of industrial production exceeded 5%, of which the output of coal, iron and steel, nonferrous ores and metals, and construction materials accounted for 2.1%, 4.3%, 4.8%, and 5.1% respectively (European Bank for Reconstruction and Development, 2001, p. 12).

The Government of Macedonia remained committed to developing the country's market economy system as well as promoting foreign investment. In 2000, foreign investment was represented almost in all branches of the minerals industry.

Macedonia produced a range of metals that included copper, ferroalloys, lead, silver, steel products, and zinc. The country's secondary aluminum industry centered on Alumina A.D. in Skopje, which had the capacity to produce 20,000 t/yr of billets and 12,000 t/yr of semimanufactures. The denationalization of major enterprises in the metals branch had important results during the year. The Skopje-based Feni-Rudnici i Industrija za Nikel, Celik i Antimon (FENI), which produced mainly ferronickel, was acquired by Societe Commerciale de Metaux et Mineraux (SCMM) of France for $2.25 million. FENI was 1 of 12 loss-making Macedonian enterprises that were determined to be suitable for closure or sale by the International Monetary Fund. Earlier in the year, Glencore International AG of Switzerland and other commercial enterprises had conducted negotiations with the Government to purchase FENI, which did not prove successful. The terms of SCMM's acquisition of FENI included a purchase price of $2.25 million and a commitment to invest a further $36 million in FENI's operation (Cahners Business Information, 2000; Hope, 2000). The Government of Macedonia also sold 82% of shares of the country's principal mine producer of copper Bucim, Rabotna Organiziacija za Rudarstvo i Metalurgija za Baker's (Bucim) (246,270 shares at $6.06 per share) through the Macedonian Stock Exchange. Bucim operated a mine and mill near Radovis. Other enterprises that were slated for sale or closure included ferroalloy producer Jugohrom, Hemijsko-Elektrometalurski Kombinat and the lead and zinc mining, beneficiation, and smelting complex Prepobotuvacki, Kombinat Zletovo-Sasa (Hope, 2000). Steel was produced at AD Makstil (a subsidiary of Duferco). Duferco had made investments that included upgrading the steel plant's continuous casters and electric arc furnaces and the installation of a ladle furnace. In 2000, Makstil reported that the production of heavy plate exceeded 240,000 t.

Macedonia also produced such industrial minerals as bentonite, feldspar, gypsum, sand and gravel, and stone (carbonate and silicate), as well as cement and other construction materials that were based on domestic quarried products. About 20% of mine output of industrial minerals was consumed domestically; the balance was exported mainly to other Balkan countries, the EU, and Russia. In 2000, important activities in this branch, including its downstream construction materials group, included a planned sale of Mermeren Kombinat Prilep, which was the country's largest producer of marble, to I. Kiriakidis S.A. of Drama, Greece. The Cyprus-based consortium Balkcem Ltd. (comprising Titan Cement S.A. of Greece and Holderbank Group of Switzerland) invested $30.7 million in A.D. Cementarnica USJE (USJE) for facility modernization to reduce costs and to increase environmental protection. To help achieve the latter, Balkcem, which had acquired 86.4% of USJE's shares in 1998, planned to discontinue USJE's production of asbestos and asbestos cement in 2001 (Multilateral Investment Guarantee Agency, 2000).

Coal and petroleum constituted about 52% and 15%, respectively, of total fuel sources at electric power generators. Most coal (lignite) was from domestic mining; however, all natural gas and petroleum had to be imported. Major foreign investment in the energy sector was accomplished in late 1999 with the purchase of OKTA A.D., Macedonia's sole petroleum refinery. In addition to the $32 million purchase price, Hellenic Petroleum S.A. indicated that it would allocate an additional $40 million for the modernization of the refinery. In December, the European Bank for Reconstruction and Development indicated approval of a $50 million loan to help finance the Thessaloniki-Skopje crude petroleum pipeline. The proposed pipeline, which would carry 2.5 Mt/yr of petroleum, was expected to reduce transportation costs of petroleum to Macedonia. Additionally, the proposed pipeline, which would extend from the Greek port of Thessaloniki to its OKTA terminus, was considered to be a better environmental alternative to the existing rail and trucking petroleum delivery route that follows the Vardar River, which also is a wildlife habitat (European Bank for Reconstruction and Development, 2001, p. 17).

Serbia and Montenegro began the year facing a major effort to rebuild roads, electric power stations, steel mills, and other industrial plants and infrastructure that had been heavily damaged during the Kosovo conflict of 1999. Additionally, bridges that had been destroyed by the North Atlantic Treaty Organization (NATO) air campaign remained effective obstacles to normal international freight traffic, which included a significant amount of mineral raw materials, on the Danube River.

Despite continuing economic sanctions imposed by the international community and the loss of effective political and economic control of Kosovo (with resources of nickel, lead, and zinc ores, coal, and production facilities for lead and zinc, ferronickel, and tin-plate, as well as a substantial portion of lignite-producing mines), the economy of Serbia and Montenegro rebounded from the sharp decline of 18% in the GDP in 1999. In 2000, the country's GDP rose by 7%, and industrial production, by 12% compared with those of 1999 (Serbia and Montenegro Federal Statistical Office, 2001, p. 4).

The yearend results of the minerals industry generally showed improvement in performance compared with those of 1999. The value of output levels attained in 2000 in the mineral fuels branch showed increases of 8%, 11%, and 6% for coal, oil and gas, and oil derivatives, respectively; iron and steel, industrial 2.4