Sources: Montenegro's aluminum plant could close

Speculation was rife this week that the Podgorica-based aluminum conglomerate, KAP, could soon shut down its production. The smelter is the biggest single contributor to Montenegrin GDP – and is majority owned by one of Russian metals oligarch Oleg Deripaska's companies, as is the Niksic bauxite mine. Sources: Montenegro's aluminum plant could close While KAP provides for 14.5 percent of the GDP, the mine, located in northern Montenegro, adds a further three percent. In case the factory closed down, Montenegrin Railways and the Port of Bar would also suffer. Earlier in the week, Belgrade daily Politika quoted anonymous sources who said the plant may cease with production unless the state continues to sell it power at discount prices. The report said that Prime Minister Milo Djukanovic and his cabinet were mulling the consequences of the possible shutting down once the contract regulating the price of power expires. However, Djukanovic quickly denied the speculation, saying that his government is "in constant communication with the KAP owner, but that the company is not considering closing the plant". KAP, bought in 2005 by CEAC – a company fully owned by aluminum giant Rusal, where Deripaska's Basic Element has the majority stake – issued a statement of its own, where Executive Director Joe Kazadi said that production at the factory will be hard to maintain unless the energy problem is resolved. "It is our job to maintain the production and we will do all that is necessary, but honestly speaking, things will become difficult unless the energy issue is solved," he said in a statement sent to Beta news agency. Kazadi also called on the Montenegrin government to join KAP in "seeking a winning solution". Yesterday, opposition Movement for Change reacted to the speculation with a statement that said the report was aimed at "preparing the public for new power subsidies to be granted to KAP, as well as for special arrangements related to the construction of new thermal power plant blocks, and new hydro power plants". "What seems to be a common denominator for all this scenarios is continued agony of KAP and its workers, with high subsidies and loss of basic development leverage for Montenegro," the party said. The statement adds that "the owner shamelessly used raw materials and equipment, almost without any investment", and that "not a single gram of aluminum has been processed". Politika's source also said that the company mulled shutting down all production except for that of alumina clay. The Movement for Change statement accused the KAP owner for "maltreating the workers and continuing with the pollution of the area, at the same time earning EUR 200mn, while power subsidies amounted to approximately the same sum of money".

Sources: Montenegro's aluminum plant could close

While KAP provides for 14.5 percent of the GDP, the mine, located in northern Montenegro, adds a further three percent. In case the factory closed down, Montenegrin Railways and the Port of Bar would also suffer.

Earlier in the week, Belgrade daily Politika quoted anonymous sources who said the plant may cease with production unless the state continues to sell it power at discount prices.

The report said that Prime Minister Milo Đukanović and his cabinet were mulling the consequences of the possible shutting down once the contract regulating the price of power expires.

However, Đukanović quickly denied the speculation, saying that his government is "in constant communication with the KAP owner, but that the company is not considering closing the plant".

KAP, bought in 2005 by CEAC – a company fully owned by aluminum giant Rusal, where Deripaska's Basic Element has the majority stake – issued a statement of its own, where Executive Director Joe Kazadi said that production at the factory will be hard to maintain unless the energy problem is resolved.

"It is our job to maintain the production and we will do all that is necessary, but honestly speaking, things will become difficult unless the energy issue is solved," he said in a statement sent to Beta news agency.

Kazadi also called on the Montenegrin government to join KAP in "seeking a winning solution".

Yesterday, opposition Movement for Change reacted to the speculation with a statement that said the report was aimed at "preparing the public for new power subsidies to be granted to KAP, as well as for special arrangements related to the construction of new thermal power plant blocks, and new hydro power plants".

"What seems to be a common denominator for all this scenarios is continued agony of KAP and its workers, with high subsidies and loss of basic development leverage for Montenegro," the party said.

The statement adds that "the owner shamelessly used raw materials and equipment, almost without any investment", and that "not a single gram of aluminum has been processed".

Politika's source also said that the company mulled shutting down all production except for that of alumina clay.

The Movement for Change statement accused the KAP owner for "maltreating the workers and continuing with the pollution of the area, at the same time earning EUR 200mn, while power subsidies amounted to approximately the same sum of money".