EU integration, co-operation expected to improve mining industry

02/06/2014

Regional co-operation and the implementation of EU standards in the western Balkans could result in thousands of new mining jobs and billions of euros in capital, experts say.

By Ivana Jovanovic for Southeast European Times in Belgrade -- 02/06/14

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Serbia has nine operating metal and mineral mines. [Nikola Barbutov/SETimes]

EU-mandated industrial and mining improvements have the potential to add thousands of new jobs in the western Balkans, resulting in competition and economic growth, experts said.

"Adopting EU standards will help make mining more competitive and will secure access to European markets," Vladimir Simic, an economic geologist at the Faculty of Mining and Geology in Belgrade, told SETimes. "Enhancing and strengthening mine development standards will fuel economic growth by supplying essential minerals and metals to society and downstream industries, including green technologies that are much-promoted by the EU."

In 2011, Serbia enacted the Law on Mining and Geological Exploration as a basis for adapting EU directives on environmental protection in the mining sector, including managing waste from extractive industries, storing carbon dioxide and setting conditions for the exploration and production of hydrocarbons.

Serbia has nine operating metal and mineral mines, three of which are state-owned and six that are privately owned, according to a recent study conducted by the National Alliance for Local Economic Development and the communication firm Breakthrough.

A significant number of domestic and foreign companies are investing large sums in exploration, as well. In 2013, there were 135 active exploration licenses in Serbia.

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Developing new mines will result in new jobs in the region. [AFP]

"If 3 percent of these licenses are converted into mining licenses, then five new mines could open, potentially bringing 4 billion euros in capital investment," Breakthrough founder William Infante told SETimes. "Five new mines could add 1,000 direct jobs and 3,600 indirect jobs in services, transport and other related industries."

According to Dragan Milosevic, CEO of mine engineering consultant firm Terra Gold, in the last decade exploration companies have invested more than 250 million euros in Serbia. Within five years, two new greenfield mines could begin extraction, bringing more than 2 billion euros in capital.

"Mining tends to bring better-paid jobs to disadvantaged areas," Milosevic told SETimes. "In 2013, the average net wage in Serbia was nearly 400 euros a month. The average wage in the mining sector was 150 percent greater, at close to 1,000 euros a month."

Infante said many companies are interested in countries in the region.

"Exploration, mining, services and equipment manufacturers like Caterpillar, Sandvik and Atlas Copco will all benefit from enhanced market integration and the countries' harmonisation with EU regulations," Infante said.

Todor Delipetrov, a professor at the Mining Geology Faculty in Shtip, Macedonia, told SETimes that Macedonia is working to meet the EU standards.

"European standards are rigorous, and they mostly protect the environment at a higher criteria than we gradually introduced. This process will certainly continue in the future," Delipetrov said.

Macedonia is exploring other sites for metal minerals, and expects to exploit them.

Macedonia Minister of Environment and Physical Planning Abdulakim Ademi said the main benefits of mining for the region are employment, increased foreign exchange and foreign investments in both the mining and geological research arenas.

"In order to improve standards and harmonise the mining sector with EU law on mineral resources, we have implemented the Union directive on mining waste. Two new laws are being prepared on geology and mining, which are planned to be fully implemented with the EU directives," Ademi told SETimes.

Coal in Bosnia and Herzegovina (BiH) is the country's main source of electricity. The excavation of coal is carried out underground and in surface mines, and among the most significant challenges is outdated machinery.

"Our big problem is the general recessionary environment that should not reflect on normal operations. Security requirements and accuracy of mining equipment are our priority," Jakub Mehić, executive director for production and maintenance at the BiH company Rudnik Kakanj, told SETimes.

Under EU standards, the country will modernise its machinery and automate technological processes to facilitate remote monitoring in the pits.

Improved machinery will provide better results and greater amounts of pit coal. It also means a greater degree of safety to improve working conditions in the country's mining sector.

Mining co-operation between BiH and Turkey was increased last year through an agreement that specifies the exchange of scientific developments, plus a basis to foster co-operation between the countries' mining engineers.

"The agreement with Turkey implies significant international co-operation in the exchange of scientific and technological achievements," said Mirsad Jašarspahić, the director of Rudnik Kakanj.

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Canadian Ambassador to Serbia, Montenegro and Macedonia Roman Waschuk said history confirms that responsible mining and resource extraction can make countries stronger.

"Canada, Australia, Norway and Finland are sterling examples," Waschuk told SETimes. "The countries of Southeast Europe can gain similar successes if they co-operate, adopt a long-term vision and harmonise their laws, policies and taxes. This is critical for the growth of responsible mining and for downstream processing that adds value, multiplies economic impacts and contributes to development, growth and prosperity."

Correspondents Bedrana Kaletovic in Sarajevo and Miki Trajkovski in Skopje contributed to this report.

What other sectors can be developed under EU standards to benefit the region? Tell us what you think.

This content was commissioned for SETimes.com.
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