BANJA LUKA –The Bosnian Serb Parliament on Wednesday voted against the sale of a government stake in an iron-ore mine to the Israeli Investment Group (IIG) after ArcelorMittal warned it would take legal action if it went ahead.
The government plan to sell the Ljubija mine to little-known IIG, which has no mining record, instead of to the world's largest steel producer has polarised Bosnian Serb politicians and triggered protests by miners fearing job losses.
ArcelorMittal, which owns 51% in a company it formed jointly with the Ljubija mining company in Prijedor, made a bid to buy out the government's 64.9% stake in the Ljubija mine. But the government decided to sell it to rival bidder IIG, saying the Israeli group offered a higher price for the stake and promised more investment.
However, on Wednesday, the Parliament rejected the government's decision. Out of 80 lawmakers present, 34 voted against, 39 for and seven abstained.
The vote means that ArcelorMittal, which employs 3 250 workers at its steel plant in the central town of Zenica and in the Prijedor mines, will not reduce output and its work force, as it had warned it would do if the sale was approved.
"The government failed with this decision because it was shown that it does not have support to conduct controversial privatisation," said Borislav Borenovic, the head of the opposition Party of Democratic Progress (PDP) which was against the sale.
IIG offered 92-million marka ($52-million) for the stake and pledged a 65-million marka investment over the next three years, while ArcelorMittal offered 63.6-million marka and investment of 63-million marka over the next ten years.
"The government wanted new investment, new jobs and the longer life span of the mine," Industry Minister Petar Djokic said after the vote. "It was meant to be a great investment but some people did not care about it."
ArcelorMittal had said it would not cooperate with the Israeli group because it had no mining record, and warned of the negative impact on jobs and the economies of Prijedor and Zenica. It also said it would take legal action to protect its contractual rights in international courts.
ArcelorMittal's local subsidiary ArcelorMittal Prijedor has exclusive exploitation rights in the mines under an earlier agreement with the government.
The vote was welcomed by ArcelorMittal workers who had staged protests outside the parliament.
"Ljubija literally means the life to us, and that's why we came to Banja Luka to tell deputies about our justified fear for jobs and existence," said Milan Djakovic, a miner from Prijedor.