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27 Nov 09

Importing Lignite into Coal Rich Kosovo

Balkan Insight has discovered that one of Kosovo’s biggest firms is being forced to import lignite from Malaysia and Indonesia, despite estimates that the newly independent country sits on the world’s fifth largest reserve of the fuel.
By Besiana Xharra

Metal firm Ferronikeli, one of Kosovo’s biggest companies, is importing lignite from the other side of the world because it cannot access the country’s rich reserves of brown coal.

Balkan Insight has discovered that the ferronickel exporter has been forced to sign deals with Malaysia and Indonesia to import lignite to its plant in Drenas.

Kosovo has about 14,700 million tonnes of unexploited lignite, worth some 120 billion euro, which is estimated to be the fifth largest reserve of brown coal on the planet.

But Kosovo’s current mines are soon to run out of coal and Ferronikeli, which was bought in 2007 by IMR/Alferon as part of Kosovo’s privatisation programme, complains that the lignite which is available cannot be used.

Arten Bajrushi, spokesman for Ferronikeli, told Balkan Insight: “Even early on, and still today, we have imported lignite from other countries of the world. We have agreements with Indonesia and Malaysia to import lignite.”

He added that only a very small amount of lignite is taken from KEK, Kosovo’s national energy provider, because the publicly owned firm cannot provide enough lignite, and that the coal it can provide is ‘too wet’ for Ferronikeli to use.

Bajrushi said: “Lignite that KEK uses for electricity is 38 per cent wet, while for our technological processes lignite needs to be only 18 per cent wet.

“This issue was supposed to be solved by a drying facility that KEK does have, but it does not work most of the time,” said Bajrushi.

He added that KEK’s organisational problems mean that it is cheaper for his firm to import coal from thousands of kilometres away rather than buy it in Kosovo.

Transporting from South East Asia remains cheaper, even though coal is shipped to Greece, as Albania and Montenegro do not have the capacity to take large cargo.

“The ports of Albania can only take 10,000 tonnes of coal, while the Greek ports can take 50,000 tonnes of coal, of which 10,000 goes to Ferronikeli and the rest is taken by other companies,” said Bajrushi.

He hopes that with the privatisation of KEK, the situation will improve, as currently only KEK has the right to sources of energy.

But officials at KEK told Balkan Insight that it does not have the right to sell lignite. According to Viktor Buzhala, KEK Spokesman, only Kosovacoal KC, a subsidiary of KEK, has the right to sell lignite.

He refused to comment on why the drying facility doesn’t work, pointing Balkan Insight towards KosovaCoal. No officials at the firm responded to questions.

Kosovo is currently using just 2 per cent of its coal stocks at the Mirash and Bardhi mines, which are soon to be exhausted.

Economic experts believe that Kosovo must quickly open new lignite mines, which would be able to supply Ferronikeli and other firms.

Azem Rexhaj, who is executive director of the Independent Commission of Mines and Minerals, ICMM, said: “There are two options for Ferronikeli to receive its lignite from Kosovo – one is for it to be supplied by KEK, and the other is for Kosovo to open a new lignite mine.

“Kosovo’s lignite is good enough quality to suit Ferronikeli. This can be seen by the fact that between 1985 and the beginning of the war, Ferronikeli used this type of lignite,” said Rexhaj.

He urged the government to take the necessary measures to open a new lignite mine.

“With the opening of a new mine, we will have the opportunity to extract sufficient lignite, will also create new jobs and will stop the import of lignite that wastes several million euros a year,” said Rexhaj.

Lignite reserves are plentiful in the Dugagjini and Drenica area of Kosovo, near the Ferronikeli plant, and can easily be exploited, he added.

Kosovo’s government has decided to deal with the situation by opening the Sibovc mine, which can supply coal for 40 years.

“Workers are moving fast to make the opening of the mine happen. We think that our first coal from this mine will arrive in the middle of next year,” said Arben Gjukaj, Managing Director of KEK.

The new mine is being opened to supply Kosovo’s new power station, Kosova e Re, which has been dogged by delays.

It is not known whether coal from this mine will be supplied to Ferronikeli or when the drying facility will begin to work again.


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