Serbia
INDIA’S INVESTMENT INTERESTS
Investment Potentials in the Serbian Mining Industry
Mining is one of the key segments of economy in Serbia and a foundation of the domestic industry. Serbia has rich coal mines which provide resources for 65% of Serbia’s electric power needs. Apart from coal, Serbia is rich in industrial minerals such as borates and phosphates as well as metals such as copper, gold and silver. The Serbian Ministry of Mining and Energy is in the process of preparing a new law on mining and exploration that is expected to stimulate foreign direct investment in the sector. Serbian Government expects the mining industry to attract close to USD 5 billion of investment and grow from the current 2% to 5% of GDP by 2020. One of the major mining areas for copper and precious metals (gold and silver) is the Timok region (Bor and Majdanpek) in Eastern Serbia. In the sixties and seventies, government had invested substantial funds in the development of the Mining and Smelting Complex (RTB) Bor copper/gold mines. In 2015, RTB Bor finished construction of a new smelter and sulfuric acid factory worth USD 250 million which has increased its production capacities to 80,000 tons of cathode copper. Recently US mining company ‘’Freeport McMoRan’’ and its Canadian partner ‘’Reservoar Minerals’’ have found large gold deposits during their exploration of the Bor area in the Cukar Pek location of eastern Serbia. According to statements issued by the two companies, in the Bor area, 65 million tons of ore were discovered with average copper content of 2.6 % and 1.5 grams of gold per ton. Two exceptional deposits, one at a depth of 179 meters containing 10.75 % of copper content and 10.86 grams of gold per ton and another containing 15.85 % of copper and 16.77 grams of gold per ton, were also found. According to estimates, copper reserves in the Bor area stand at one billion tons. Another Canadian company "Avala Resources" which has advanced in its exploration on the Black peak mountain in the vicinity of Bor, claims to have discovered reserves of about 70 tons of gold. Currently a dozen foreign mining companies are exploring copper and gold ore in the Timok region of Serbia. With the discovery of a rare mineral Jadarite which contains a high concentration of lithium, a new segment of industrial mineral exploration has started developing. Global companies such as Rio Tinto and LithiumLi are investing into exploration of Jadar area (western Serbia) which has the potential of supplying around 20% of global lithium demand. Other borates such as boron ore is already being mined in the area. According to media reports, Canadian company Balkan Gold has found rich deposits of borates close to the city of Kraljevo. According to preliminary results, the exploration of site has revealed 7.5 million tons of minerals with a high content of boron oxide. For more information, interested Indian entities may contact: 1. Embassy of India, Belgrade, Serbia (Tel: +381 11 2666 520, Email: indemb@eunet.rs). 2. Mr Dusan Nikezic, Project Manager, CES Mecon, Belgrade, Serbia (Tel: +381 11 6558555, Email: dusan.nikezic@cesmecon.com). 3. Mr Jovica Radisavljevic, Deputy General Director, Mining and Smelting Complex (RTB) Bor, Serbia (Tel.: +381 30 427808, Email: joca.radisavljevic@rtb.rs).
Possibilities for investment in Serbian Automotive Industry
In September 2008, the Serbian Government signed an agreement with the Italian automotive manufacturer FIAT under which a joint venture “FIAT Automobile Serbia (FAS)” was to be established which was to take over the factories of Serbian automotive producer Zastava Kragujevac. The Serbian Government was obliged under the agreement to invest in the necessary infrastructure, provide subsidies and evolve a social programme for redundant workers, while FIAT was to invest USD 1.3 billion in new machinery and launching of a new FIAT 500 L model. The agreement was signed for 10 years and expires on 31st of December 2018. After launching of the new 500 L model in 2012 and several years of average success on the EU and North American markets, local media in Serbia has started speculating that FIAT is looking for an exit strategy and will probably close down the facility in 2018. These speculations have been further fueled by statements of FIAT managers to the effect that no new model is planned to be produced in the Kragujevac factory in Serbia and that FIAT is revaluating its small car strategy for the European market.
If FIAT automobiles would choose to end the arrangement with the Serbian Government in 2018, this would open up the possibilities for other automotive manufacturers to step in. As the Serbian Government is eager to have the automotive industry running, this could be a great opportunity for Indian automotive manufacturers looking to produce vehicles within the EU to step in and partner up with the Serbian Government and Zastava Automotive Factory Kragujevac. Serbia should be seen both as a local market of about 7.2 million inhabitants and as a regional hub for access to a number of lucrative markets where Serbia enjoys preferred trade status. Serbia offers unique opportunities with the following Free Trade Agreements in place: The European Union, The Russian Federation, EFTA (Norway, Switzerland, Island & Lichtenstein), Turkey, Belarus, Kazakhstan, CEFTA countries (Balkan countries not members of EU). Serbian-based manufacturing facilities have preferential / customs free access to these markets.
(Source : Embassy of India, Belgrade)