Apr 19 2004
The LNM Group, the world’s second largest and most global steel producer today announces that it has initialed a joint venture agreement with RZR Ljubija for its participation in the mining and development of the Ljubija iron ore mines in Bosnia Herzegovina. Signing is expected shortly subject to various conditions including, but not limited to, approval of the relevant bodies of the Republic of Srpska.
The mines, which have an annual capacity of approximately 1.5 million tonnes and reserves estimated to last 35 years, have been idle since the Yugoslavian Civil War and the subsequent collapse of the region’s steel industry. As part of the agreement, LNM would make significant investments in order to re-start the mines and to develop them into a stable and competitive supplier of iron ore to customers in the region, including the Group’s own plants.
LNM has also signed a social package agreement with the trade union of Ljubija mines which includes settlement of outstanding wages and salaries, commencement of discussions on new collective bargaining agreements and support of social activities. LNM Holdings has also been invited by the Government of the Federation of Bosnia and Herzegovina to acquire a majority stake in BH Steel, Cenica, and expects to close acquisition of the Macedonian company Balkan Steel shortly which would further strengthen the Group’s presence in the region.
Commenting, Aditya Mittal, Vice Chairman, LNM Holdings N.V. said:
“We are very interested in re-establishing the metallurgical complex of Cenica, which consists of the steel plant at Cenica and the iron ore mines at Ljubija. The initialing of today’s agreement is essential to this plan and part of LNM’s broader strategy to invest strategically in upstream operations to create a truly vertically integrated global steel business.”
LNM is already the leading steel producer in Central and Eastern Europe with annual steel making capacity in excess of 14 million tonnes and major steel making facilities in Poland, Romania and the Czech Republic.
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