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Serbia seeks buyer for former USS plant

Keywords: Tags  Zelesara Smederevo, Boris Tadic, Serbia, Donetsk Iron & Steel, U.S. Steel, Michael Cowden

TORONTO — The Serbian government plans to seek a partner in the coming week to purchase Železara Smederevo (ZS), U.S. Steel Corp.’s former operations in the country.

Serbian President Boris Tadic said during a visit to the mill that an ideal partner would have coke production capacity and galvanizing capabilities, the latter to better position ZS to serve the automotive industry, according to a translation of a report from Serbia’s Tanjug national news agency posted on Tadic’s website.

Tadic appeared to suggest that supporting ZS was taking a toll on government resources. "There are moments when the state must stand behind the company. . . . But there are limits," he was quoted as saying.

Government support had allowed the steelmaker to continue operating and to sign several big contracts with customers in Italy and Turkey, ZS director Ivan Milosevic said in the report. "We succeeded thanks to the state," he added.

Ukrainian flat and long products producer JSC Donetsk Iron & Steel Works (DMZ) was said to be in talks about a prospective purchase of ZS, a Serbian government spokesman previously told AMM sister publication Metal Bulletin. A DMZ delegation visited the plant in late February, and the Ukrainian company had been expected to reach a decision on a purchase by early this month.

The talks between the Serbian government and DMZ were said to have been more serious than those with Luxembourg-based United Group SA, which the spokesman said had also expressed an interest in ZS.

Pittsburgh-based U.S. Steel, citing "unacceptable losses," sold ZS to the country’s government in late January for the equivalent of $1. The Serbian government subsequently announced plans to seek a new buyer.

ZS has an annual capacity of 2.2 million tonnes of crude steel, which is cast into slab and rolled into hot- and cold-rolled coils, although full capacity has never been achieved, according to the company’s website.

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