Serbia mining: Copper company Bor damaging contract with Red Metal

20. April 2016. / Mining

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The business analysis of the company MSB Bor which has been done recently by the consultants of the American agency McKinsey has recorded bad management and numerous failures in technological processes.

Director of MSB Bor, Blagoje Spaskovski, has concluded a harmful contract with the company of Milan Popović, because of which the Smelter Plant is losing one million dollars per month.

Namely, as written in the latest issue of NIN magazine, Spaskovski has signed a contract on ore processing services with the company “Red metal“, owned by the Serbian copper king, at a price lower than the market price.

Dragan Živković, the owner of the company “Grand Engineering“ which produces copper wire, reveals that the last year’s contract of “Bor“ with the “Red Metal“ envisages incredible and unacceptable conditions. One of them is also that the copper delivery time amounts to only one day, although the smelting process lasts for at least 30 days.

– The contract with Popović is below all market standards. The copper delivery deadline of one day does not exist anywhere else. Because of the low price and such conditions, the Smelter Plant is losing at least one million dollars per month – Živković says, and adds that, at this, MSB also sells its own copper to the privileged company of Milan Popović, at a price that is lower than the price for others.

The business analysis of the company MSB Bor which has been done recently by the consultants of the American agency McKinsey has recorded bad management and numerous failures in technological processes.

Ljubiša Miljković, President of Serbian Miners’ Union, who has been fired twice and who is currently suing the company so as to return to MSB Bor, says that the contract with the company of Milan Popović envisages the Smelter Plant level of utilization of around 95 percent, although it is lower in practice.

– Because of this, MSB has to compensate for this difference between 75 and 95 percent from its own copper – Miljković says.

Although these claims are supported with documents, and NIN has also gained an insight into the contract itself, director Spaskovski denies everything. He claims that “Red Metal” is charged for concentrate processing at market price.

In the 10 months of operation, the Smelter Plant losses have reached 32 million dollars, whereas 50 million dollars are necessary for MSB Bor to “survive”.

– Only two companies responded to the public invitation and we chose the better Bid. The problem is that MSB used to cheat on its clients and failed to deliver the processed copper. This is why not many companies want to process in our plant now – Spaskovski said to NIN.

He also had an explanation for the incredible delivery time amounting to one day.

– The time for returning the concentrate is not related to the profit. At the beginning, the deadline was such until we gained their trust. Soon, we revised the contract, with the delivery time of 30 days for copper and 60 for gold. The profit from processing is one thing, whereas the losses that the Smelter Plant will have if it does not operate at full capacity are another. The technology is such that, when it starts operating, there is no stopping – Spaskovski said, transmits Serbia-energy.eu

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