2015 Minerals Yearbook

MONTENEGRO [ADVANCE RELEASE]

U.S. Department of the Interior August 2019 U.S. Geological Survey The Mineral Industry of By Sinan Hastorun

Montenegro is a small country located on the western Balkan of nonferrous metals, which were the country’s leading export Peninsula; it is bordered by Albania, , category, decreased by 3.4% to $74.1 million in 2015. Exports Kosovo, and . Montenegro had been a European Union of metalliferous ores and metal scrap decreased by 17.3% to (EU) candidate country since 2010. The country produced a few $29.2 million; those of metal manufactures decreased by 4.2% mineral commodities on a limited scale, but it had the potential to $2.1 million; and those of nonmetallic mineral manufactures, to become a petroleum and natural gas producer through the by 39.9% to $1.1 million. Exports of iron and steel more development of resources in its Exclusive Economic Zone in than quadrupled to $22.4 million. Exports of petroleum and the Adriatic Sea. Montenegro’s mineral industry included the petroleum products increased by 66.3% to $16.2 million, mining and processing of bauxite and other industrial minerals, and those of coal, coke, and briquets increased by 36.4% to and lead, lignite coal, and zinc. Metal production included $2.2 million. Raw materials accounted for 2.4% of the country’s primary aluminum smelting and steelmaking. The metal sector total imports of $1.97 billion in 2015. Imports of nonmetallic was once a major contributor to the country’s economy, but mineral manufactures increased by 2.9% to $82.9 million; metal the sector’s output had decreased in recent years (tables 1, 2; manufactures, by 11.1% to $72.7 million; metalliferous ores and Negotiating Team for the Accession of Montenegro to the metal scrap, by 13.7% to $30.7 million; nonferrous metals, by European Union, 2012, p. 7, 14; Government of Montenegro, 10.4% to $15.7 million; and coal, coke, and briquets, by 37% 2013, p. 1; European Commission, 2015, p. 4). to $0.9 million. Imports of petroleum and petroleum products decreased by 19.9% to $158.2 million; iron and steel, by 1.6% Minerals in the National Economy to $44.1 million; and natural gas, by 20.8% to $10.2 million (Statistical Office of Montenegro, 2016a, p. 4–7). Montenegro had a small, open economy. In 2015, the country’s real gross domestic product (GDP) increased by Production 3.4%, which was up from the 1.8% rate of growth in 2014. The nominal GDP in 2015 was $4.0 billion. The acceleration in the Montenegro’s mineral production did not show substantial rate of economic growth was a result of increased investment changes in 2015 except for that of bauxite, sand, steel, and in construction and infrastructure. The GDP was provided stone. The production of steel was estimated to have increased mainly by the metals, energy, and tourism sectors (European substantially in 2015, but this was from a low base in 2014. Commission, 2016, p. 126; International Monetary Fund, 2016, Production of alumina, lime, and salt ceased in 2010, 2012, p. 4; Statistical Office of Montenegro, 2016b, p. 1; World Bank, and 2014, respectively. Lignite production increased by 5%, The, 2016a; 2016b, p. 1). whereas brown coal production resumed after many years of In 2015, mining and quarrying made up 1.2% of the GDP, zero production. In 2015, production of sand decreased by about and manufacturing accounted for 4.0%. The gross value added 72% compared with that of 2014; bauxite, by 68%; ornamental by the mining and quarrying sector increased by 3.4% in 2015, stone (marble blocks), by 45%; and other stone products, by and that by the manufacturing sector increased by 6.0%. Mining 20%. On the other hand, production of crushed and broken stone and quarrying output, which made up 6% of total industrial increased by 16% (table 1). production, decreased by 8.1% in 2015. Within the mining and quarrying sector, output of metal ore decreased by 67.4% Structure of the Mineral Industry and output of lignite coal increased by 8.2%. Manufacturing The leading production companies in the mineral industry output increased by 19.9%. Within the manufacturing sector, were privately owned. Kombinat Aluminijuma output of base metals, which accounted for 11.4% of industrial (KAP) (the country’s sole aluminum producer), and Rudnici production, increased by 12.3%. Output of nonmetallic mineral Boksita (its sole bauxite producer) were fully acquired by products, which accounted for 8.8% of industrial production, Uniprom d.o.o. Nikšić of Montenegro in 2015 after operating increased by 7%. Output of fabricated metal products, which under public bankruptcy administration since 2013 and 2014, accounted for only 0.2% of industrial production, more than respectively. The Rudnik Uglja A.D. coal company was jointly tripled. Energy production, including electricity, gas, and steam, owned by the A2A Group of and the Government of which accounted for 40.1% of industrial production, decreased Montenegro. Tosçelik Nikšić A.D., the main steel company by 5.9% (Statistical Office of Montenegro, 2016b, p. 4–5; in the country, was wholly privately owned by the Tosyalı 2016c, p. 1–2). Group of (table 2; Dnevne Novine, 2015; European Raw materials were Montenegro’s second-ranked export Commission, 2015, p. 26; Garaca, 2015a; Rudnik Uglja A.D., category in 2015 and made up 20% of total exports, which 2015; Tosçelik Nikšić A.D., 2015). were valued at EUR317.2 million ($338.5 million1). Exports

1Where necessary, values have been converted from euro area euros (EUR) to U.S. dollars (US$) at an annual average exchange rate of EUR0.937=US$1.00 for 2015.

Montenegro—2015 [ADVANCE RELEASE] 32.1 Commodity Review Mineral Fuels

Metals Coal.—Montenegro had about 198.9 Mt of lignite coal and 13.2 Mt of brown coal in proven reserves. An important source Bauxite and Alumina and Aluminum.—The production of of energy for the country, coal accounted for about 49% of aluminum remained unchanged in 2015. KAP, which was the primary energy production. The and the Maoce basins country’s sole aluminum-producing company, was fully acquired in the north formed the two major coal deposits. The Maoce by Uniprom with the final installment payment in August 2015. basin contained 109.9 Mt of proven reserves of coal. Rudnik A lawsuit by En+ Group of (KAP’s previous owner) Uglja’s Pljevlja Mine at Pljevlja accounted for Montenegro’s regarding the company’s nationalization in 2013 and subsequent entire production of lignite coal and supplied the country’s sole privatization in 2014 was pending. KAP had produced up to thermal powerplant, TPP Pljevlja. This powerplant accounted 10,000 metric tons per month (t/mo) of aluminum through 2012, for 49% of the power generated in 2015 by Montenegro’s only and its output had been decreasing since then. In 2015, KAP’s power utility company, Elektroprivreda Crne Gore A.D. Nikšić aluminum production reportedly decreased to 3,440 t/mo. In (EPCG). EPCG planned to double the capacity of TPP Pljevlja. September 2015, Uniprom announced plans to build a new In 2015, the company was in talks with Skoda Praha of the aluminum plant within the grounds of KAP’s aluminum smelter; Czech Republic for the construction of a 250-megawatt-capacity the plant would have a production capacity of 30,000 metric thermal power unit (Negotiating Team for the Accession of tons per year (t/yr) of alloys. Uniprom planned to begin Montenegro to the European Union, 2012, p. 15–16; European operating the plant by November 2016. The production of Bank for Reconstruction and Development, 2015, p. 3; bauxite decreased substantially in 2015 owing in large part to European Commission, 2015, p. 82; Elektroprivreda Crne Gore the bankruptcy of Rudnici Boksita, which was the country’s A.D. Nikšić, 2016). sole producer of bauxite. Montenegro had 21.5 million metric Brown coal production resumed in Montenegro in 2015 after tons (Mt) of bauxite in proven reserves. All bauxite ore from the 10 years of zero production. In January 2015, Metalfer Group Niksic Mine was exported, and KAP had imported alumina for of Serbia restarted coal production at the Mine after aluminum production since closing its alumina plant in 2009. a 10-month-long repair process. The company had acquired Rudnici Boksita, the owner of the Niksic Mine, was acquired the underground coal mine from Balkan Energy of Greece by Uniprom in September 2015 following its bankruptcy in in March 2014; the mine had been idle since 2005 owing to 2014 (Negotiating Team for the Accession of Montenegro to the flooding. Berane’s exploitable coal reserves were estimated to European Union, 2012, p. 10, 15; Central Bank of Montenegro, be about 50 Mt at 14 to 17 kilojoules per kilogram. Metalfer 2013, p. 21–22; Dnevne Novine, 2015; European Commission, was in the process of preparing a feasibility study for a 2015, p. 26; Firth, 2015; Garaca, 2015b; Government of small-size thermal powerplant nearby (Vibilia SEEbiz, 2014; Montenegro, 2015, p. 72–73; Koseva, 2015). Metalfer Group, 2015). Iron and Steel.—The modernization program at the Tosçelik Petroleum and Natural Gas.—Montenegro did not Nikšić steel plant, which had been launched in 2012 by Tosyalı produce any petroleum or natural gas in 2015, but the country Group of Turkey, continued in 2015. The company produced took steps to begin exploration of its offshore hydrocarbon ingots and steel bars and was in the process of building a resources in the Adriatic Sea. In 2015, the Government signed rolling mill for the production of rolled steel products. Tosçelik a concession agreement with Eni S.p.A.-Novatek (an Italian- planned to increase the steel production capacity at Niksic to Russian consortium) for four blocks. The agreement was a 400,000 t/yr through equipment upgrades and to reach steel result of the tender that was held in May 2014 for hydrocarbon output of 200,000 t/yr and annual revenue of about $255 million exploration and extraction in 13 blocks of identified prospects in 2016 (Bağrık, 2014; Tosçelik Nikšić A.D., 2015). within the Dinarides Thrust Belt and in the adjacent Adriatic- Lead and Zinc.—Montenegro’s proven reserves of lead and Ionian foreland basin. The Government also planned to sign zinc ore were about 20.7 Mt. Suplja Stijena and Brskovo were an agreement with the Greece-United Kingdom consortium the two identified deposits of lead and zinc in the country. The Energean Oil and Gas SA-Mediterranean Oil & Gas Plc. for one Suplja Stijena Mine was being operated by Gradir Montenegro block (Moravcevic and Lakovic, 2015, p. 131; U.S. Department d.o.o. (a wholly owned subsidiary of ZGH Boleslaw S.A. of of State, 2016). Poland) for the extraction and processing of polymetallic ores. The Brskovo deposit was under exploration by a consortium Outlook of European investors, which had acquired its license holder, Montenegro’s mineral industry, particularly its metal sector, Balkan Mining Pty. Ltd., from Balamara Resources Ltd. of is expected to increase production slowly. Aluminum and Australia in November 2014. In 2015, no updates on the Monty bauxite production in the country may increase from a low project were available; the Monty project was composed of the amount under the new ownership of KAP and Rudnici Boksita Brskovo, the Visnjica, and the Zuta Prla deposits, all located in if Uniprom’s plan for a new aluminum plant is realized. Steel (Negotiating Team for the Accession of Montenegro production is expected to continue to increase with the ongoing to the European Union, 2012, p. 15, 17; Balamara Resources modernization of Tosçelik Nikšić. Brown coal production is Ltd., 2014; ZGH Boleslaw S.A., 2015). expected to increase with the resumption of underground mining operations in Berane. The prospects for the development of additional lead and zinc deposits in the country is contingent

32.2 [ADVANCE RELEASE] U.S. GEOLOGICAL SURVEY MINERALS YEARBOOK—2015 on progress of the Monty project, which is at an early stage of Government of Montenegro, 2015, Montenegro economic reform programme development and under new ownership. Petroleum and natural 2015−2017: Podgorica, Montenegro, Government of Montenegro, January, 138 p. (Accessed October 17, 2016, at http://www.mf.gov.me/en/sections/ gas exploration in Montenegro’s EEZ in the Adriatic Sea is presentations/145799/Montenegro-Economic-Reform-Programme- expected start in 2016, and several more licensing rounds are 2015-2017.html.) planned for additional exploration blocks in coming years. International Monetary Fund, 2016, 2015 article IV consultation—Staff report— Press release—And statement by the Executive Director for Montenegro: References Cited Washington, DC, International Monetary Fund, March, 96 p. (Accessed October 14, 2016, at https://www.imf.org/external/pubs/ft/scr/2016/ Bağrık, Belma, 2014, Tosyalı’nın Karadağ hedefi 200 milyon hedefi cr1679.pdf.) [Tosyali’s Montenegro goal of 200 million]: Dünya [Lahore, Pakistan], Koseva, Dents, 2015, Montenegro high court upholds verdict against KAP March 20. (Accessed October 16, 2016, at http://www.dunya.com/sirketler/ owner: bne Intellinews, November 23. (Accessed October 16, 2016, tosyalinin-karadag-hedefi-200-milyon-hedefi-222730h.htm.) at http://www.intellinews.com/montenegro-high-court-upholds-verdict- Balamara Resources Ltd., 2014, Balamara completes divestment of non- against-kap-owner-84532/.) core Balkans base metal assets: Balamara Resources Ltd. press release, Metalfer Group, 2015, Mining operations: Metalfer Group. (Accessed November 27, 1 p. (Accessed October 16, 2016, at http://www.asx.com.au/ October 16, 2016, at http://www.metalfer.net/mining/.) asxpdf/20141127/pdf/42v1rkhdknh7q3.pdf.) Moravcevic, Slaven, and Lakovic, Milos, 2015, Energy law in Montenegro, in Central Bank of Montenegro, 2013, Recommendations to the Government of Newbery, Mark, and Goldberg, Silke, eds., European energy handbook 2015: Montenegro for economic policy in 2013: Podgorica, Montenegro, 95 p. London, United Kingdom, Herbert Smith Freehills, February, p. 131–133. (Accessed December 20, 2016, at http://www.cb-cg.org/eng/slike_i_fajlovi/ Negotiating Team for the Accession of Montenegro to the European Union, fajlovi/fajlovi_publikacije/preporuke/reccomendations_2013.pdf.) 2012, Bilateral screening—Chapter 20—Presentation of Montenegro: Dnevne Novine, 2015, Uniprom becomes the owner of KAP, Pejovic Brussels, Belgium, Government of Montenegro, November 28. (Accessed paying 14 million euros: Cafe del Montenegro, August 7. (Accessed October 17, 2016, at http://www.eu.me/mn/20/20-prezentacije-s-bilate October 16, 2016, at http://www.cdm.me/english/uniprom-becomes-the- ralnog-skrininga?download=390:steel-metals-and-other-sectors-aluminium- owner-of-kap-pejovic-paying-14-million-euros.) wood-industry-textile-clothing-footwear-and-chemicals.) Elektroprivreda Crne Gore A.D. Nikšić, 2016, Electricity production and Rudnik Uglja A.D., 2015, Vlasnička struktura [Ownership structure]: electro energetic balance: Elektroprivreda Crne Gore A.D. Nikšić. Rudnik Uglja A.D. (Accessed October 14, 2016, at http://www.rupv.me/ (Accessed October 17, 2016, at http://www.epcg.com/en/about-us/ vlasnicka-struktura.) electricity-production-and-electro-energetic-balance.) Statistical Office of Montenegro, 2016a, External trade of Montenegro— European Bank for Reconstruction and Development, 2015, Country January—December 2015: Podgorica, Montenegro, Statistical Office assessments—Montenegro, in Transition report 2015–2016—Rebalancing of Montenegro, January 25, 8 p. (Accessed October 10, 2016, via finance: London, United Kingdom, European Bank for Reconstruction http://www.monstat.org/eng/page.php?id=460&pageid=171.) and Development, November, 3 p. (Accessed October 16, 2016, at Statistical Office of Montenegro, 2016b, Gross domestic product of Montenegro http://2015.tr-ebrd.com/wp-content/uploads/2015/11/TR2015_16_CA_ for 2015: Podgorica, Montenegro, Statistical Office of Montenegro, Montenegro.pdf September 30, 10 p. (Accessed October 10, 2016, via http://www.monstat.org/ European Commission, 2015, Montenegro progress report 2015: eng/page.php?id=163&pageid=19.) Brussels, Belgium, European Commission, October 11, 83 p. Statistical Office of Montenegro, 2016c, Indices of industrial production— (Accessed October 13, 2016, at http://ec.europa.eu/enlargement/pdf/ December 2015: Podgorica, Montenegro, Statistical Office of Montenegro, key_documents/2015/20151110_report_montenegro.pdf.) January 28, 3 p. (Accessed October 10, 2016, via http://www.monstat.org/ European Commission, 2016, Montenegro—Volatile growth amid public eng/page.php?id=1250&pageid=34.) finance concerns,in European economic forecast—Spring 2016: Brussels, Tosçelik Nikšić A.D., 2015, News: Tosçelik Nikšić A.D. (Accessed Belgium, European Commission, Institutional Paper 025, May, p. 126–127. October 16, 2016, at http://www.toscelikniksic.me/news/.) (Accessed October 13, 2016, at http://ec.europa.eu/economy_finance/eu/ U.S. Department of State, 2016, Investment climate statements for 2016— forecasts/2016_spring/cc_montenegro_en.pdf.) Montenegro: U.S. Department of State. (Accessed October 17, 2016, Firth, Nadine, 2015, Future of KAP: Aluminum Today, September-October, at http://www.state.gov/e/eb/rls/othr/ics/investmentclimatestatements/ 1 p. (Accessed October 16, 2016, at http://www.aluminiumtoday.com/ index.htm?year=2016&dlid=254397.) contentimages/features/CEAC.pdf.) Vibilia SEEbiz, 2014, Metalfer from Sremska Mitrovica takes over brown coal Garaca, Maja, 2015a, Administrator of Montenegro’s Rudnici Boksita mine Berane: Vibilia Business Portal, March 5. (Accessed October 16, 2016, accepts Uniprom Metali bid—Report: SeeNews, September 15. (Accessed at http://www.vibilia.rs/dokument_new.php?s=vesti&ID=5064951&lang=en.) October 16, 2016, at https://seenews.com/news/administrator-of- World Bank, The, 2016a, Data by country—Montenegro: Washington, DC, -rudnici-boksita-accepts-uniprom-metali-bid-report-493014.) The World Bank. (Accessed October 14, 2016, at http://data.worldbank.org/ Garaca, Maja, 2015b, Montenegro’s Uniprom plans new aluminum smelting unit country/montenegro.) by Nov 2016—Report: SeeNews, September 29. (Accessed October 17, 2016, World Bank, The, 2016b, The World Bank in Montenegro—Country at https://seenews.com/news/montenegros-uniprom-plans-new-aluminium- snapshot: Washington, DC, The World Bank, October, 4 p. (Accessed smelting-unit-by-nov-2016-report-495050.) October 16, 2016, at http://pubdocs.worldbank.org/en/693041475865777593/ Government of Montenegro, 2013, Montenegro facts: Podgorica, Montenegro-Snapshot-October2016FINAL.pdf.) Montenegro, Government of Montenegro, Government ZGH Boleslaw S.A., 2015, Capital group: ZGH Boleslaw S.A. (Accessed Guide Series, July 3, 24 p. (Accessed October 15, 2016, October 14, 2016, at http://zghboleslaw.pl/en/capital-group.) at http://www.gov.me/en/info_guidebooks/129284/Montenegro-Facts- Government-Guide-Series.html.)

Montenegro—2015 [ADVANCE RELEASE] 32.3 tABLe 1 Montenegro: ProDUCtIon oF MInerAL CoMMoDItIeS1

(Metric tons unless otherwise specified)

Commodity 2011 2012 2013 2014 2015 MetALS Aluminum, metal, ingot, primary 92,838 74,813 47,951 r 42,767 r 42,499 Bauxite 158,614 -- 61,154 155,153 50,369 Iron and steel, crude steel 61,164 26,161 19,723 8,000 e, r 36,602 Lead, content 2,400 e 2,800 e 3,350 e 3,400 e 3,476 Zinc, content 6,600 e 9,200 e 9,200 e 14,400 e 14,136 InDUStrIAL MInerALS gravel cubic meters 47,717 48,374 78,374 59,783 58,312 Lime 3,448 ------Salt (sea water evaporate) 10,000 16,000 10,000 -- -- Sand -- 47,811 31,898 68,537 19,240 Stone, excluding quartz and quartzite, dimension, crude: Crushed and broken cubic meters 69,141 62,922 135,178 221,584 258,120 ornamental (marble blocks) do. 32,804 48,495 48,989 54,677 30,227 other, stone products do. 35,487 61,959 53,289 68,537 54,641 MInerAL FUeLS AnD reLAteD MAterIALS Coal Brown ------17,989 Lignite 1,972,671 1,706,302 1,692,535 1,655,045 1,734,769 eestimated; estimated data are rounded to no more than three significant digits. rrevised. do. Ditto. -- Zero. 1table includes data available through october 17, 2016.

tABLe 2 Montenegro: StrUCtUre oF tHe MInerAL InDUStrY In 2015

(thousand metric tons)

Major operating companies and Annual Commodity major equity owners Location of main facilities capacity Alumina1 Kombinat Aluminijuma Podgorica (KAP) Podgorica nA (Uniprom d.o.o. Nikšić, 100%) Aluminum, primary do. do. 72

Bauxite Rudnici Boksita (Uniprom d.o.o. Nikšić, 100%) niksic Mine 700 e Coal: Lignite rudnik Uglja A.D. Pljevlja (A2A group, 39.5%; Pljevlja 2,000 e government of Montenegro, 31.1%; other investors, 29.4%) Brown Metalfer group Berane 40 Lead and zinc gradir Montenegro d.o.o. (ZgH Boleslaw S.A., 100%) Suplja Stijena Mine near Pljevlja 20 e Steel, crude Tosçelik Nikšić A.D. (Tosyalı Group, 100%) niksic 150 e eestimated. do. Ditto. nA not available. 1no alumina was produced in Montenegro in 2015.

32.4 [ADVANCE RELEASE] U.S. GEOLOGICAL SURVEY MINERALS YEARBOOK—2015