LONDON — Serbian police have arrested more than a dozen individuals for allegedly falsifying documents related to the processing of slag from the now-idled Zelezara Smederevo (ZS) steel works, costing the steelmaker as much as €5.7 million ($7.4 million).

The slag was processed under a contract held by Harsco Metals Smederevo d.o.o., a subsidiary of Camp Hill, Pa.-based Harsco Corp. Workers were tasked with extracting iron ore from slag produced at the site for reuse in ZS’ furnaces.

However, the individuals sold the high-quality iron ore to third parties rather than reselling it to ZS as required, Serbian authorities said. This left only low-quality material for ZS, which spent €2 million ($2.6 million) on repurchases, sources said.

Seven or eight of the 14 individuals arrested are former or current employees of Harsco, while the others were with private companies that had contracts to buy low-quality iron from Harsco for €60 ($78) per tonne, an official from the Smederevo police told AMM sister publication Steel First.

Harsco "released" all but two of the accused employees when the plant suspended operations in mid-2012, a company spokesman said. The remaining two employees were suspended March 4.

Harsco is cooperating with the police and other authorities and will continue to do so, the spokesman added.

ZS remains on track to restart operations in April, a plant executive said. Management said in early March that the company was planning to restart the furnace next month (amm.com, March 5).

A version of this article was first published by AMM sister publication Steel First.