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Home/News/Offer for RTB Bor has arrived, tender has not yet been announced

Offer for RTB Bor has arrived, tender has not yet been announced

According to the announcement of the Minister of Mining and Energy, Aleksandar Antić, the public call will be announced in the first quarter of the next year

Although the public invitation for a strategic partnership for RTB Bor has not yet been announced, a letter of intent sent by Igor Altushkin, president of the Board of Directors of the company “Ranch Copper”, was presented as a finished matter in the local public. According to the announcement of the Minister of Mining and Energy, Aleksandar Antić, the tender will be announced in the first quarter of next year.

It is important that the state removes RTB Bor from the budget list, according to economist Jurij Bajec. Asked to whether the offer of Igor Altushkin is seen as finished matter even before the tender is announced, and if this can discourage interested investors, our interlocutor answers negatively.

– The state is obviously trying to find ways to solve the issue of RTB Bor. The situation is very complex and obviously a solution like the one for Iron and Steel Plant in Smederevo is sought – notes Bajec and adds that it is important for the state to minimize social damage and protect employees in this company.
Furthermore, Ljubodrag Savic professor at University of Belgrade Faculty of Economics, noted that serious investors, if any, will not be demotivated by the fact that Igor Altuskin sent a letter of intent to Serbia.

– Every serious investor knows that a letter of intent, by its legal form, is not binding. And it’s completely clear to everyone that we need new investors as soon as possible – says Savić.

As Minister Aleksandar Antic has already announced, several mining companies from Russia, China and Canada are seriously interested in a strategic partnership with this company. Visiting Pink Television, Antić pointed out that he was talking to everyone and that the strategic partner would be the one who offered the best conditions to Serbia.

“We need a partner who will invest more than half a billion dollars in the development of mining industry. New mines need to be open as well as Cerovo mine. It is not logical that the state is the only investor in the mining sector. We need a new investor.” he noted.

Seeing that the price of copper is continuingly growing since October 2016, when it amounted $ 4,700 per ton, Fiscal Council estimated that there is a possibility that RTB Bor will have good business results. Despite of good copper prices last year, this company was in a more over than 5 billion dinar minus.

The Fiscal Council, however, believes that these favorable circumstances on the world market should be used to attract a strategic partner.

– Otherwise, if RTB Bor remains state-owned, the necessary investments and company reform won’t reflect on that company’s management. This could be a permanent fiscal risk – notes the council.

From the budget, 2 billion dinars were allocated for the current business of this company in 2017, while the expenditures for the next year are not outlined.

Nonetheless, future movement of copper price is completely unpredictable. The IMF and the World Bank can’t agree on this either. Where the IMF says the price of this raw material will fall in the coming period, according to the World Bank, prices will rise.

– Attention must be paid to the frequent, turbulent and unpredictable change in the price of this stock exchange product, and the possibility of turnover in the price of copper. Possibly in a year or two. That would return RTB Bor to the zone of loss and the need to finance company’s activity from the state budget – noted the Fiscal Council.

Furthermore, the fact that the copper price is favorable does not guarantee that the RTB will do business positively. Thus, in 2014, the average copper price was $ 6,860, and the company’s operating result was around zero. In 2013, the copper price was $ 7,300, and RTB Bor recorded a negligible business profit.