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The Mineral Industry of Bosnia and Herzegovina in 2014

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The Mineral Industry of Bosnia and Herzegovina in 2014 2014 Minerals Yearbook BOSNIA AND HERZEGOVINA U.S. Department of the Interior December 2017 U.S. Geological Survey THE MINERAL INDUSTRY OF BOSNIA AND HERZEGOVINA By Sinan Hastorun Bosnia and Herzegovina is a mountainous, largely landlocked Herzegovina, 2015b, p. 1; International Monetary Fund, 2015, federation located on the western Balkan Peninsula in p. 24; World Bank, The, 2015a, p. 2; 2015b). southeastern Europe. The country borders the other former Mining and quarrying accounted for about 2.0% of the Yugoslavian republics of Croatia, Montenegro, and Serbia and country’s GDP in 2014 compared with about 2.2%, revised, has a very narrow strip of land on the Adriatic Sea. Much of in 2013. The mining of coal and lignite made up about 68% the country’s territory consists of karst limestone. Despite its of the mining and quarrying sector’s total production in terms relatively small size, Bosnia and Herzegovina has substantial of value, whereas the mining of metal ores accounted for mineral resources; the most significant among these are about 21%. Manufacturing made up about 10.9% of the GDP bauxite, copper, iron ore, lead, lignite, and zinc. The country in 2014, which was unchanged from its share in 2013. The also has significant hydropower and coal-powered thermal manufacture of base metals accounted for about 15.0% of energy potential and prospective petroleum and natural gas the manufacturing sector’s total output in terms of value; the resources; it was one of only two exporters of electrical manufacture of coke and refined petroleum products, 12.9%; energy among the Balkan countries (Trubelja and Baric, and the manufacture of nonmetallic mineral products, 3.8%. The 2011, p. 3–5; United Nations Environment Programme, 2012, gross value added by mining and quarrying decreased by about p. 56; Foreign Investment Promotion Agency, 2014a, p. 7, 10; 3.5% in real terms, whereas that of manufacturing increased U.S. Department of Commerce, 2014, p. 4; Marinkovic and by about 4.1% in 2014 (Agency for Statistics of Bosnia and Dzaferovic, 2015, p. 47, 49; U.S. Department of State, 2015, p. 3). Herzegovina, 2015b, p. 3; 2015d, p. 2). The metal-processing sector, which included both ferrous In 2014, mining and quarrying output decreased by 2.1% and nonferrous metals, was the most valuable segment of compared with that of 2013. Industrial production increased Bosnia and Herzegovina’s mineral industry. The sector was by 0.1%, and manufacturing output, by 3.8%. Total output of the country’s largest exporter of goods by value and had metal ores decreased by 3.9%, and coal and lignite output, by registered a substantial increase in production in recent years. 0.7%. Output of nonmetallic mineral products decreased by The main mineral outputs of the metal-processing sector were 6%, and base metals output, by 1.9%. Output of chemicals and alumina, aluminum, iron, lead, steel, and zinc. The mineral chemical products increased by 12.4%, and coke and refined extraction sector was dominated by the mine output of bauxite, petroleum products, by 7.3%. Energy production including coal, copper, iron ore, lead, and zinc. Mineral fuels produced electricity generation decreased by 6.9% in 2014 compared in the country were coke, lignite, and subbituminous coal; with that of 2013 (Agency for Statistics of Bosnia and coal accounted for most of the domestic energy production. Herzegovina, 2015e, p. 5). Mineral output also included barite, dimension stone, limestone, salt, and sand and gravel. In the former Yugoslavia, Bosnia Government Policies and Programs and Herzegovina was a major metallurgical center and a Each of the three constituent entities of Bosnia and major source of asbestos, barite, construction aggregates, Herzegovina—the Federation of Bosnia and Herzegovina, the gypsum, and salt until Yugoslavia’s dissolution in 1989, Republic of Srpska, and the District of Brcko—formulates and but none of those mineral commodities were produced on implements its own mineral legislation and relevant regulations. a regionally or globally significant level in 2014 (United Each of the two main political entities has its own government Nations Environment Programme, 2012, p. 57–59; Dragnic- regulatory agency for mineral- and energy-related activities, Krisovic and Nanu, 2013, p. 3; Foreign Investment Promotion including environmental protection—the Federal Ministry Agency, 2013, p. 6–7; Energy Community, 2014, p. 48; of Energy, Mining, and Industry in the Federation of Bosnia U.S. Department of Commerce, 2014, p. 16). and Herzegovina and the Ministry of Industry, Energy, and Minerals in the National Economy Mining in the Republic of Srpska (United Nations Environment Programme, 2011, p. 4; 2012, p. 56). Bosnia and Herzegovina’s real gross domestic product The Federal Ministry of Energy, Mining, and Industry is (GDP) increased by 1.05% in 2014, which was a lower rate responsible for drafting mining and energy legislation, enacting of growth than that of 2013.The nominal GDP in 2014 was regulations for implementation of the laws, and overseeing $18.3 billion. The slowdown in economic activity was in large mineral extraction and processing in the Federation of Bosnia part owing to record floods in May that were estimated to have and Herzegovina. Relevant laws governing the mineral industry cost the country the equivalent of 15% of the GDP in loss of in the Federation include the Mining Law, No. 26/10 of 2010; output; the energy sector was among the sectors that were most the Law on Geological Survey, No. 9/10 of 2010; the Law on negatively affected. Investment and consumption (both private Concessions, No. 40/02 of 2002, as amended by law No. 61/06 and public) increased, whereas net exports (defined as exports of 2006; and the Law on Environmental Protection, No. 33/03 minus imports) decreased (Agency for Statistics of Bosnia and of 2003, as amended by law No. 38/09 of 2009. The Ministry of Industry, Energy, and Mining is responsible for overseeing the BOSNIA and herzegovina—2014 8.1 use of minerals and setting electricity policies in the Republic large-scale mineral commodity producers, Aluminij Mostar, of Srpska. It regulates the extraction and use of minerals for and the steel producer ArcelorMittal Zenica, accounted for electricity generation and the production and use of biofuel. most of the metal sector’s output and employment. Table 2 is Relevant regulations governing the mineral industry in the a list of major mineral industry facilities operating in Bosnia Republic include the Law on Mining, No. 107/05 of 2005, and Herzegovina in 2014 (table 2; Foreign Investment as amended by law No. 75/10 of 2010; the Law on Energy, Promotion Agency of Bosnia and Herzegovina, 2014b; No. 49/09 of 2009; and the Law on Concessions, No. 25/02 U.S. Department of Commerce, 2014, p. 16). of 2002, as amended by the laws No. 91/06 of 2006 and No. 92/09 of 2009 (United Nations Environment Programme, 2011, Mineral Trade p. 12; 2012, p. 20–24; Federal Ministry of Energy, Mining, The value of Bosnia and Herzegovina’s total exports in and Industry, 2015; United Nations Environment Programme, 2014 increased by 3.6% to $5.9 billion1 and the value of the 2015a; b). country’s total imports increased by 6.8% to about $11 billion. Hydrocarbon exploration and production is governed by As a result, the ratio of exports to imports by value decreased to the Federation of Bosnia and Herzegovina Law on Research 53.6%. Bosnia and Herzegovina’s exports, in particular exports and Exploitation of Oil and Gas of 2013. The country did not of the metal processing sector, were purchased primarily by have a national strategy regarding energy supply security. member states of the European Union (EU) and the Central There was no development of renewable energy sources either, European Free Trade Agreement (CEFTA). The decrease in despite the existence of a national target for energy generation the global prices of base metals and electrical energy, which from such sources (European Commission, 2014, p. 48–49; were two key export categories for Bosnia and Herzegovina, Marinkovic and Dzaferovic, 2015, p. 49). as well as low demand from its primary trading partners in the Production EU, limited the growth of the country’s exports. Its imports increased significantly owing to an increase in the demand for In 2014, Bosnia and Herzegovina’s production of bentonite imported goods in the aftermath of the floods, in particular for increased more than fourfold; ecaussine and other calcareous goods to rebuild public infrastructure. A significant decrease in stone (types of monumental or building stone), by about 81%; the country’s mineral commodity imports was largely owing to granite, by 60%; coke, by 21%; pig iron, by 13%; lime and the decrease in the global price of petroleum (U.S. Department sodium compounds, by 11% each; silicon metal and crude of Commerce, 2014, p. 16; Agency for Statistics of Bosnia and steel, by 10% each; and salt, by 8%. The production of slate Herzegovina, 2015a, p. 1, 22–23; Central Bank of Bosnia and decreased by about 87%; crude kaolin, by 52%; marble and Herzegovina, 2015, p. 26). travertine, by 45%; construction sand, by 44%; limestone In 2014, mining and quarrying exports decreased by 2.7% (crushed and powdered), by 21%; silica sand, by 19%; compared with those in 2013 and made up 1.3% of total aluminum (unwrought), by 17%; sand and gravel, by 15%; exports. The exports of coal and lignite increased by 18.2% zinc (ores and concentrate), by 13%; bauxite and gypsum to $29.3 million and accounted for 38% of the total value and anhydrite, by 8% each; cement, by 5%; and alumina, by of mining and quarrying exports.
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