Donetsk Steel suggests consortium model for Zelezara Smederevo - Ukrainians to secure raw materials and market, Serbia to overhaul furnaces?

Ukraine's Donetsk Steel has suggested a consortium model for Zelezara Smederevo steelworks and now waits for a response from the Serbian government until the week's end, well-informed sources from the steel plant told FoNet news agency.

A meeting that was held early this week with Minister of Economy Nebojsa Ciric was attended by State Secretary in the Ministry of Finance and Head of the government's Task Force for Zelezara Smederevo Dusan Nikezic, representatives of Zelezara Smederevo and Ukraine's Donetsk Steel Group, the sources said to FoNet.

According to these sources, Donetsk Steel suggested that a consortium should be formed, with Ukrainians providing raw materials at lower prices and securing the market, whereas the profit would be shared.

In case the Serbian side accepts such proposal, it will be obligated to overhaul the second blast furnace, which could take two to three months, while Ukrainians will start delivering raw materials, coke and coal dust, within the next two months.

If an agreement is reached, such system should start functioning until September. In that case, the plan is to produce about 100,000 tonnes of iron per year.

FoNet's interlocutors agree that it would be a good deal that would keep salaries at their current level and make it possible to meet all obligations to the state.

The Serbian government has extended the deadline to find a strategic partner for Zelezara Smederevo by three more months - until September 10th. The government has already extended this deadline once, and the tender expired Monday.

Donetsk Steel is one of the three companies that applied for participation in the tender for a strategic partner.