Serb Copper Mine Seeks Investment, Clean up

Sep. 20, (Reuters) –

A source of wealth for more than a century as home to one of Europe's largest copper mines, Serbia's Bor has struggled for years to attract foreign investment and heal its soiled environment.

RTB Bor, the state-owned company that thrived two decades ago as Yugoslavia's largest copper mine and smelter, fell into disrepair during the 1990s wars, international embargo and mismanagement under President Slobodan Milosevic.

"Our technology dates from 1961 and 1971 and we are in dire need of renewing it," Chief Executive Blagoje Spaskovski told Reuters.

Decades of mining with Soviet-era technology have scarred the region, home to about 60,000 people and around 250 km (155.3 miles) southeast of Belgrade.

"We went decades without investment, without new mines and technology such as a new foundry," Slobodan Milosavljevic, Serbia's trade minister, told Reuters.
Serbia's efforts to sell RTB Bor failed in 2007 and 2008 as two potential buyers, Romania's Cuprom and Austria's A-Tec, failed to meet terms of the tender.

In June, the RTB Bor and Canada's SNC Lavalin signed a 175 million euro ($210.7 million) contract to build a copper smelter and a sulphuric acid factory. About 135 million euros will come from a loan from Export Development Canada, Canada's export credit agency.

Serbia has pledged the remaining 40 million euros as well as another 27 million euros in mining equipment.
"Without 400 or 500 million euros (from privatization) , plus investments in the smelter, we will rather continue to dig and process (copper) alone," Milosavljevic said.

TONNES OF TROUBLE

In the 1980s, RTB Bor had an annual output of about 180,000 tonnes and disposal of about 5,000 tonnes of sulphuric acid, 350 tonnes of arsenic and 35 tonnes of zinc in vast dumps of processed ore.
Studies of the Borska Reka river show its riverbed is now so heavily polluted with copper, iron, aluminum, lead and cadmium, that more than 60 percent of Bor's fertile soil is irreparably damaged, said Dragan Jankucic of the Agenda 21 environmental group.

Environmentalists fear the Borska Reka could poison more than just its immediate surroundings.
"It flows to the Timok River and then to the Danube. If toxic waste from processed ore dumps goes into the Danube Basin through the Borska Reka riverbed, the damage could be disastrous," Jankucic said.
Rosa Milojkovic from the village of Slatina, just outside Bor said her cattle would die immediately if they drank the river's brown and grey water.

"When the river flooded our fields, we had to remove all the soil and bring new dirt from kilometers away," she said.
According to 2007 research by the LEAP, an environmental group, samples from Bor's population showed excess levels of arsenic in their urine and blood, with most suffering from at least two recurring pollution-related diseases.
"There are so many young people sick in our village ... Women are dying from cancers and men from heart attacks," said villager Milojkovic.

Bor children are also more prone to illness than any other age group, with 71 percent diagnosed with related illnesses at some point, most often with respiratory diseases, another government-sponsored study showed.
"Women usually first notice sulphur dioxide pollution when it rains. With water it forms sulphuric acid and their stockings start to melt," Spaskovski said.

In an effort to boost environmental protection, the World Bank has granted RTB Bor a 10-year, interest-free loan of 35 million euros on condition that 25 million euros are allocated to resolving the most urgent problems.
"Some efforts have been made in 2009 and 2010 and things have improved a tad," said environmentalist Jankucic.

The development of a new smelter and sulphuric acid factory should also help. "Both projects will greatly improve environmental protection," Bor CEO Spaskovski said.

"Sulphur oxide ... kills in time. One of the first conditions from our tender that was accepted by the SNC Lavalin was that the usage of sulphur oxide must be at 98.5 percent and its emissions reduced."

Spaskovski also said that the company now wants "to return Borska Reka to a condition which was given to it by God or nature. Waste dumps for processed ore ... must be covered with a layer of greenery."

The future of Bor in the European Union applicant country remains a big question mark important for the wider economy.

The jobs at RTB Bor are vital in its impoverished area of eastern Serbia and the government wants to avoid stirring up protests ahead of 2012 elections. Yet government officials are also questioning its long-term feasibility.
"The key issue is do we have more reserves of copper or not there or in the vicinity. If not, there's no justification for investments ... if there's copper, then we need to invest much more," Trade Minister Milosavljevic said.