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Bojan Popović, Director Of London-Based Mineco Limited

Mineco: Mining First, Geological Exploration Second

When we read or hear ‘base metals’ and ‘Serbia’ in the same sentence today, the usual association is with the many media articles that we can read about encouraging drilling results announced by some Canadian, Australian or British junior exploration company. For the most part, these are intended to capture the imagination of a far-away prospective investor or provide a degree of comfort to those that have already taken the plunge and are funding the promise of future riches. Alternatively, we can think of the large, world-class copper mine in Bor that was established many decades ago, or even the ‘Jadar’ lithium project – both of which are of strategic importance to the Serbian State in their own right.

However, amongst all the hubbub, one privately-owned company was the first to recognise the mining potentials of this region and invest its own resources, firstly into mining and secondly into geological exploration. The Mineco Group is today synonymous with lead and zinc mining in Serbia and Bosnia-Herzegovina, which is why we spoke with Bojan Popović, director of London-based Mineco Limited.

How do you see Mineco; what is its past?

Mineco started out nearly twenty years ago, when experienced physical traders in base metals and concentrates formed their own trading business. Capitalising on their wealth of knowledge of the international metals markets, Mineco quickly achieved successes in delivering solutions for producing mines, other trading companies and end-users by facilitating sales, purchases and deliveries.

The opportunity for diversification into mining presented itself in 2004, when the bankrupt Rudnik lead and zinc mine near Gornji Milanovac was offered up for privatisation. At a time when the mining industry in the former Yugoslavia was struggling, the assessment was reached that Mineco possessed both the resources and the capability to relaunch operations at this mine, modernising and running it as a successful business. Sometime later, the Rudnik case study was singled out as an example of an excellent privatisation in the mining sector, not just due to its commercial success, but also due to the creation of additional employment and improvements in safety records and environmental protection.

By 2009, two more inactive lead and zinc mines had been acquired on both sides of the River Drina: the first near Srebrenica, which had been damaged heavily during the Bosnian civil war, and the second near Ljubovija, where the tailings dam had previously burst and flooded the underground horizons. Both mines received substantial funding from the Group, in order to repair, replace, modernise and reemploy workers that had previously left. Water management systems were redesigned and constructed to ensure the mines’ tailings facilities would not endanger the Drina and its river basin. By 2010, Mineco had successfully transformed itself from a pure trading company into a group that acquires, develops and operates mines in this region.

Where is Mineco today? How has it evolved?

The accomplishments with those three mines have not gone unnoticed. Aside from creating new employment, each of them became the principal generator of economic prosperity within their respective municipalities. With CSR principles being embraced from the outset, the goodwill that was generated equipped Mineco well to pursue additional capital projects and investments. Whereas the first three mines were ‘brownfield’ class, in 2010 and 2012 Mineco embarked on two ‘greenfield’ mining projects. The Bosil-Metal lead and zinc mine near Bosilegrad in southern Serbia and the Geomet lead mine in Olovo, Bosnia-Herzegovina both required a full range of works – from permitting, geological exploration and planning, to construction. Bosil-Metal is currently, since 2017, operating a pilot processing plant for the gathering of data and experience for the design of the commercial-sized plant. Meanwhile, a brand new gravitational separation plant has been built in Olovo, with the first tonnages of concentrates delivered in 2019.

Once the required licensing and permitting is issued by the Serbian Ministry of Mining & Energy, Mineco will be on a fast track to perform all required steps to ultimately commission, alone or with partners, another operating mine in Serbia

This increased mining activity led to more geological explorations being conducted, especially in exploration projects such as the one in the Čelebići area of eastern Bosnia, where we have submitted a verified mineral reserves statement, obtained the exploitation concession and are now planning construction of the sixth mine. Our group companies, in Serbia and B-H, are licensed to conduct exploration drilling campaigns using their own drilling rigs.

Further afield, through large capital investments Mineco has acquired and developed a lead recycling plant in the Moscow region. We are presently the largest producers of refined lead and lead alloys in Russia.

Where is Mineco heading? What is planned for the future?

We recently announced that our long-term plans in rebuilding and opening the old “Suva Ruda” lead & zinc mine in the municipality of Raška is gaining pace. Since 2016, when legal due diligence was performed, our local company, “Vavrina d.o.o.”, has purchased all land plots comprising the land area of the old mine and tailings facility, as the highest bidder in public auctions, and applied for exploration rights. Once the required licensing and permitting is issued by the Serbian Ministry of Mining & Energy, Mineco will be on a fast track to perform all required steps to ultimately commission, alone or with partners, another operating mine in Serbia. Our capability to carry out this process will generate much needed workplaces and investments in the Raška District, as well as regular mining royalties and other tax revenues for the State and local authority. On reflection, the Mineco Group has thus far invested and re-invested close to $200 million in its mining assets.

We will continue working towards upgrading the Bosil-Metal mine in 2021, as well as optimising the Geomet mine, while planning for the construction of our Čelebići and Raška mines.

The Serbian Ministry of Mining and Energy is planning to adopt a new Mining Law. Has Mineco participated in public consultations?

As was the case previously, when the current Mining Law was drafted, we have again taken part by voicing our views and recommendations in relation to the drafting of the new Law under Minister Mihajlović. On this occasion, the chosen forum was GRAS, which had put forward a lengthy list of amendments to the Ministry’s first draft. Successive Serbian governments have stated that they see the mining industry as a prominent segment of the economy that increasingly contributes to the country’s GDP. FDI statistics illustrate that the current mining law has already achieved this year on year, with more foreign junior exploration companies than ever now being present in Serbia. Deservedly, it has been praised as one of the best mining laws in the world, making Serbia – an EU membership candidate country – a favourite destination for miners and mineral explorers. We think it is important that the new law continues to promote this industry internationally, not at the expense of its people but for their benefit, observing the sentiments of an ever more observant public. Lawmakers should ensure that certain provisions of the new law are not in conflict with provisions and principles of other existing laws, to ensure clarity.

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