Aluminium smelter Aluminij Mostar will have to start shutting down production, CEO Drazen Pandza said in a letter to FBiH authorities and to president and prime minister of Croatia, FTV reported. The reason for the dramatic situation is that power utility Elektroprivreda HZBH does not want to supply electricity to the company anymore because Aluminij Mostar cannot meet its financial obligations due to liquidity problems. The contract with Elektroprivreda HZBH ends today, Oct 10, but the media has unofficially learnt that it will be extended until Oct 15.
In September Pandza called for state help saying that Aluminij Mostar is at risk because of high alumina and electricity prices. Back then he urged the government to subsidize electricity prices for industries and divide transport charges between importers and exporters. Pandza has also asked for cuts of incentives for power exports and introduction of measures to support business development. Aluminij Mostar used to be BiH’s top exporter but due to high electricity prices and unfavorable aluminium prices it accumulated debts in the past years. The entity government owns a 44%-stake in the company, small shareholders further 44% and the rest (12%) is in the hands of Croatia’s TLM.