2008 Minerals Yearbook BULGARIA U.S. Department of the Interior December 2010 U.S. Geological Survey THE MINERAL INDUS T RY OF BULGARIA By Mark Brininstool Bulgaria’s mineral industry included mine output of ferrous was about $1,150 million.1 NA announced that the company and nonferrous metals, mineral fuels (mainly coal), and such planned to rename itself Aurubis beginning sometime in 2009 industrial minerals as clays, gypsum, and rock salt. Additionally, (Norddeutsche Affinerie AG, 2008a, b; 2009, p. 119). the metallurgical sector smelted and refined copper, gold, iron Gold.—In 2008, 4,160 kilograms (kg) of gold were produced and steel, lead, silver, and zinc. Cement, dimension stone, and in Bulgaria. In previous years, table 1 showed production of other construction materials also were produced. On a world gold metal, but it is believed that the production figures actually scale, however, Bulgaria’s mineral industry was small and represented gold content of concentrate. The category label has mainly of regional importance. been corrected in table 1 of this report. Dundee Precious Metals Inc. announced plans to expand its Minerals in the National Economy Chelopech mining project to produce up to 2 million metric tons per year (Mt/yr) of ore, from about 1 Mt/yr in 2008, and In 2008, Bulgaria’s gross domestic product (GDP) increased to build a facility to process the ore. In July, the Bulgarian by about 6% compared with the country’s GDP in 2007. The Government approved the environmental impact assessment total value of industrial production increased by 3% in 2008 and for the mine expansion and processing plant construction after accounted for about 25.1% of the GDP. In 2007 (the latest year for Dundee agreed to pay higher royalties on mine production and which data were available), mining and quarrying activities made gave the Government a 25% interest in the processing facility. up 4.4% of the value of industrial production (National Statistical After the construction permits are approved, Dundee estimated Institute of the Republic of Bulgaria, 2008, p. 114; 2009). that it would take 18 months to complete construction of the processing plant. Dundee planned to continue producing gold Production and copper concentrate and to ship the concentrate to Namibian Custom Smelters (NCS) in Namibia for processing until the new Copper content of concentrate production increased by 5% processing plant in Bulgaria is completed (Dundee Precious compared with that of 2007, and refined copper production Metals Inc., 2008; 2009, p. 15, 16; Ilieva, 2008c). increased by 81%. Lead and zinc content of concentrate In 2008, Cambridge Mineral Resources Plc of the United production decreased by 21% and 13%, respectively, but refined Kingdom, Euromax Resources Ltd. of Canada, and International lead and zinc production increased by 5% and 2%, respectively. Resources Holdings Ltd. of Australia operated exploration Pig iron production decreased by 59% and crude steel projects in Bulgaria, but by the end of 2008, Euromax did not production decreased by 30%. For industrial minerals, perlite have any active operations in the country. Throughout 2006 production decreased by 50%; barite production, by an estimated and 2007, Euromax was unable to continue exploration at 21%; and kaolin production, by 6%. Bentonite production its Popintsi license because of opposition by local residents increased by 80%; silica sand production, by 33%; and sand and and subsequent restrictions on Euromax’s exploration license gravel production, by 12%. Natural gas production decreased by by the Bulgarian Government. According to Euromax, the 26%, and crude petroleum production decreased by 4%. Government terminated the company’s initial 3-year license on August 6, 2007, but did not inform the company of this action Structure of the Mineral Industry until May 21, 2008. After the August 6 termination of the license, the Bulgarian Government collected rent from Euromax Table 2 is a list of major mineral industry facilities. for the following year (through August 6, 2008). When Euromax discovered that its license had been terminated, it sought to Commodity Review reinstate the Popintsi license or to obtain compensation for the rent that it had paid after its license was terminated, but by the Metals end of 2008 the issue was still not settled. In December 2008, Euromax decided to discontinue exploration at its Trun property Copper.—Refined copper production increased by about after Teck Cominco Ltd. of Canada decided not to exercise its 81% in 2008 compared with that of 2007 owing to new option to obtain a 55% share of the project in return for a 4-year facilities at the Pirdop copper plant. The construction of a new $3 million investment (Euromax Resources Ltd., 2009, p. 8, 34). tankhouse was completed in October 2007, which raised the Iron and Steel.—The significant reduction in output of pig Pirdop plant’s annual capacity to 180,000 metric tons (t) of iron and crude steel in 2008 is attributable mainly to decreases electrolytic copper from about 70,000 t. The old tankhouse in production by Kremikovtzi A.D. At the end of 2007, was shut down after the new refinery began operating. In Kremikovtzi’s debt had reportedly reached about $1.14 billion, September 2007, Norddeutsche Affinerie AG (NA) purchased which led to rumors that the plant would need to close. In 29.08% of the Cumerio Group, which owned the Pirdop copper processing plant, and in September 2008, NA purchased the 1Where necessary, values have been converted from European euros (€) to remaining 70.92% of Cumerio. The overall purchasing price U.S. dollars at the rate of €0.68=US$1.00. Bulgaria—2008 7.1 January 2008, trade unions representing Kremikovtzi employees Intertrust Holding announced that it would make significant accused the plant’s majority owner, Global Steel Holdings Ltd. reductions in employment at its various companies; the largest (GSHL) of India, of mismanagement and called for GSHL’s number of cuts would take place at Gorubso Co., which was removal from ownership. By the end of February, it was a lead-zinc mining company. Intertrust hoped to rehire the reported that ArcelorMittal, U.S. Steel Corp., and two Ukrainian workers but would be able to do so only if the economic companies, Metinvest, and Vorskla Steel, among others, were situation improved and metals prices increased (Ilieva, 2008b). interested in purchasing GSHL’s 71% stake in Kremikovtzi. In May, Kremikovtzi accepted $46.79 million in emergency Mineral Fuels and Related Materials financing from ArcelorMittal of Luxembourg. Vorskla Steel had offered similar financial assistance. In July, Kremikovtzi signed Coal.—In 2007 (the latest year for which data were available), a production deal with ArcelorMittal in which ArcelorMittal about 97% of all coal produced in Bulgaria went to thermal would provide raw materials for the production of steel at the powerplants. Mini Maritsa Iztok EAD was the leading coal Kremikovtzi plant, but the deal was opposed by Kremikovtzi producer in Bulgaria, and in 2008, it produced about 24.7 million employees, and about a week later the deal was abandoned for metric tons (Mt) of lignite (Eurocoal, 2009; Republic of Bulgaria a similar production deal with Vorskla Steel. Kremikovtzi’s Ministry of Economy, Energy, and Tourism, 2009, p. 6). monthly production of steel reportedly dropped to 10,000 metric Natural Gas.—In 2008, all natural gas production in Bulgaria tons per month (t/mo) in July 2008 compared with 150,000 t/mo took place at Melrose Resources S.a.r.l.’s Galata field, which in July 2007. The Sofia City Court declared Kremikovtzi is located off the coast of Varna in the Black Sea. The Galata insolvent on August 6, 2008, and bankruptcy proceedings began. field provided about 6.5% of the gas consumed in Bulgaria; the Investors claiming to own €325 (about $480 million) worth other 93.5% was imported from Russia. On January 31, 2009, of Kremikovtzi bonds purchased in 2006 said that they would Melrose stopped production at the Galata field because the appeal the ruling because it stated that Kremikovtzi had been field’s gas resources had been almost completely depleted, and insolvent since 2005, which hurt the investors’ chances of the company began the process of converting the gasfield into recovering their investment. In October, Kremikovtzi began a gas storage facility. Melrose expected the storage facility to taking steps to shut down two blast furnaces and its coke begin operating in the third quarter of 2009; the storage capacity batteries after Vorskla Steel suspended its production agreement. of the facility was expected eventually to reach 1.8 billion cubic By the end of the year, potential deals with ArcelorMittal and meters. Melrose also explored for gas near the Galata field, and Vorskla Steel for the purchase of Kremikovtzi had apparently in 2008, it estimated reserves of about 1.3 billion cubic meters at been abandoned and Companhia Siderurgica Nacional (CSN) the Kaliakra well located 15 kilometers (km) east of the Galata of Brazil and Smart-Group of Ukraine were each negotiating to well and 0.68 billion cubic meters at the two Kavarna wells purchase the plant; by the end of 2008 and into the beginning located 7 km east of the Galata well. The company expected of 2009, however, no deal had been reached for the sale of to begin production at Kaliakra in the second half of 2010 and Kremikovtzi (Bivol, 2008; Bulgaria Gazette, 2008; Ilieva, at Kavarna in the third quarter of 2009. Although exploration 2008a, d-g; Walker, 2008). was being undertaken, there did not appear to be any immediate Lead and Zinc.—Bulgaria was mostly dependent on imports source to replace the Galata field (Melrose Resources Plc, 2009, of lead and zinc ores and concentrate to supply the KCM S.A.