UNMIK/PR/1687
Grand Hotel in Pristina, Wednesday, 27 June 2007
SRSG Joachim Rücker
Mr. President, Mr. Prime Minister, ministers, representatives of international donor community, representative of international community excellencies, but most of all dear prospective investors and guests, thank you for coming here today to Kosovo, to Pristina.
I think you will find during the course of this day that Kosovo is absolutely open for business. You are coming into a place with positive growth figures, with a good legislative framework for doing business, for the good basis, with an engaged government when it comes to creating the conditions for doing business, and most of all, I think the mining and mineral sector is the traditional strength of Kosovo, is the traditional competitive advantage when it comes to competing in the international market. Plus it is very important for you to realize that Kosovo is not an island, Kosovo is firmly integrated into the larger regional market.
You are not dealing with a market of two million people; you are dealing with the Southeast European market.
Kosovo is firmly integrated into the regional free trade agreement, into the enlarged CEFTA, Kosovo is firmly integrated into the regional energy community treaty that was established in Athens in 2005.
So, Kosovo can of course contribute to the needs of the region and beyond. We have a very good legal basis for doing business in the mineral and mining sector, we have independent regulators, the ICMM, the Commission for Mines and Minerals that is doing the licences, we have an Independent Regulator in the energy sector and everything is according to the European standards. And these standards will continue to apply to Kosovo after status, because you know, we are now in a politically very decisive phase, as we go from the current UN interim administration period, for actually a lot of the competencies have already been transferred to the authorities of Kosovo, to a final status as defined by the plan that is in front of the United Nations Security Council, as defined by the Special Envoy Martti Ahtisaari.
We have a lot of interesting projects going on in Kosovo at the moment in the sector of mining and minerals. One is of course very much in focus of attention, is the so-called Kosovo C project, with the help and support of our international donors: World Bank, EU, USAID, Kreditanstalt fuer Wiederaufbau and others.
The Minister of Energy and Mining, Ethem Ceku, and the PISG and UNMIK have initiated the lignite power technical assistance project, which will then lead us to the new power plant Kosovo C, with a MegaWatt (MW) output of around 2000 MW. And also in this context a new mine, the Sibovc mine, will be opened.
We are now in the phase between the expression of interest, which is over, we have four series consortia that are applying, and this will be followed now by the tender phase, the request for proposal that will be upcoming very soon.
There is also enormous economic potential in the Trepca mines, which are technically under administration, under UNMIK Regulation 2005/48, but the strategy forward is absolutely the privatisation, because the investment needed is something that will only come under organized privatisation of Trepca, and you’re invited during the course of this conference to have a closer look at Trepca under the leadership of the Minister, who will, I think, go with you there tomorrow.
As I’ve been saying, we are very confident at this point that we reach the final political status of Kosovo and rest assured that the economic conditions in Kosovo and the legal framework under which we are operating will be basically the same, fully in accordance to European standards, now and in the future.
I wish this conference the success it deserves. Thank you very much for taking the initiative Mr. Minister and all the best!
Acting DSRSG Paul Acda
Thank you very much, Mr. President, Prime Minister, SRSG, ministers, ladies and gentlemen and potential investors.
I am particularly pleased to be given the opportunity to briefly speak here. First I would like to congratulate the Minister and his team in the ministry for the initiative of setting up this conference, which I think is an extremely important event.
I will not repeat some of the things that more significant speakers have said. I will simply say that the geology of Kosovo offers a broad spectrum of economically exploitable and potential mineral deposits that range from gold and silver, through lead/zinc, copper, bauxite, ferronickel, magnesit, lignite and others. In addition there are various types of construction minerals that are directly exploitable here in Kosovo.
I shall emphasize that the time to come is now because people are already expressing interest in the potential here in Kosovo and that is supported by the fact that ICMM have approved and issued 24 exploration and 98 mining licences to date. So there is interest now and of course as interest intensifies, the competition will be there and things will become more expensive.
The ICMM and the Ministry are making themselves available and will make themselves available to assist potential investors and the ICMM particular will make itself available to any investor with its Mining Cadastral records and Geological Database.
Just at the moment ICMM is probably about 70% through an aeronautical survey project of the geophysical assets and structures of Kosovo, which again demonstrates very clearly the commitment to the available resources here in Kosovo. Once that is published and available, it will be a massive improvement on data, which is currently available.
As Chairman of the KTA, I would like to say and claim some credit for some successful privatisations of a number of mining-related Socially Owned Enterprises. The most prominent example is Ferronikel business, which is bought by a consortium called Alferon, which has available two Ferronickel mines.
When they bought the company in a special spin off in 2005, the whole of the infrastructure of the business had been completely and irreversibly damaged during the war. Most of the technology in the plant dated from the 70s, particularly the electrical system was completely moribund, very old, of 50s and 60s, Russian technology.
The company since then have invested over 30.5 mil € in rehabilitating the plant and they are close to meeting their requirement for 1000 employees. They expect the first nickel run to take place this month. The estimate is that that plant can produce between 10 and 12 thousand tones of nickel a year.
When they bought this business and invested in it, nickel was selling on the world market at 16 thousand US$ a tone. It is now selling at 49 thousand US$ a tone. So that one plant with both lines running, producing 12 thousand tons of nickel a year will reduce Kosovo’s balance of payments deficit by between 30 and 40%.
In addition, the complex is not just providing profit for itself and contributing to the balance of payments deficit, but also the consortium is doing much of the contract work for the rehabilitation of the plant, employing local contractors and local people.
Also it has just signed a contract with Kosovo Railways, which will be worth between 2 and 3 mil € a year to ship the ore by rail. So, an injection of a substantial amount of money into the Kosovo Railways.
I think, in my view, I would say that particular example is one that investors and others can emulate here to the benefit of both, the people of Kosovo, themselves, and broadly the economy of Kosovo, as well.
The SRSG mentioned the position on the Trepca mines, so I will not go further into that, but I would just conclude by saying that one example of Ferronikeli to me demonstrates the positive availability here in Kosovo, and with little risk and some intelligent planning, what can be achieved.
I encourage all potential investors here to look at things in that light, and take Ferronikeli as a beacon or as a guiding light of what can be achieved. Ladies and Gentlemen thank you very much!
