Secrets of the Macedonian Gold

Or how and who has, overnight, sold the Macedonian gold and copper mine "Bucim" to a mysterious buyer for DM 3.7 million. And while the entire public in the country cannot recover from surprise, the Government which staged this scandalous transaction, is avoiding giving any explanation and replies to many questions so that there are growing doubts and speculations, while the unprepared miners are trying by a strike to turn things to their own advantage.

AIM Skopje, November 15, 2000

Like a tectonic earthquake a new scandal is rocking the Macedonian economy. The state package with 82 percent of shares of the only copper, gold and silver mine in the country - "Bucim" from Radovis

• which was until recently the largest and most profitable economic facility, was sold late last week at the long-term security exchange in Skopje. In an allegedly regular sales transactions, an anonymous foreign buyer got 246,220 shares at the face value of DM 100 each and 85 percent discount rate, and paid them DM 3,67 million instead of DM 30 million. That is ten times less than the originally assessed real value of the mine and its accompanying facilities built during twenty years of its successful operation. Its privatisation was expected, because the Government has been offering it on the stock exchange ever since last October, but the manner in which it was carried out represents a precedent in the usual practice. The transaction has caused a considerable nervousness both of 800 mine employees, as well as of public at large.

First, it was carried out in an extremely hush-hush manner with whole-hearted mediation of the top leadership of the ruling VMRO-DPMNE. Just five day before the sale of the mine, their representative in the management board of the Privatisation Agency managed to push through the decision on this amazing discount and reduction of the value of shares from DM 100 to only DM 15. The explanation offered by the Agency was that until now no one showed interest in the purchase of the mine although on two occasions the value of shares was lowered, first from DM 100 to DM 70, and then to DM 50. The very fact that not a single one of the interested parties in the country was informed of the approved unusually high discount rate of 85 percent raises doubts that the whole operation was staged and the buyer secretly chosen in advance.

Secondly, as the name of the new owner had not been officially published yet, nor the terms under which the valuable national wealth was sold to the "unknown" foreigner, speculations were spreading. The competent ministers feigned surprise and tried to cool tempers down. People at the stock exchange say that this it is a usual practice for the buyer to remain unknown until the entire sum is paid and which makes him eligible to be entered in the court registry and entitled to all rights and duties under the law.

Only when miners went on general strike was the new boss finally disclosed. It is an American-European security trading firm "EurAm" desirous of investing in south-east Europe with branch offices in Basel, Paris, Riyadh and Washington. Allegedly, it sent a fax from Washington which raised new doubts. The most frequently mentioned story is that behind the whole transaction is the Bulgarian firm "Multigrupa", close to VMRO-DPMNE frontmen from earlier times.

Namely, as the miners and all those who saw the fax claim, it briefly informed that the mine was bought on November 8, which is incorrect because it was done a day later, and announced the visit of firm's representatives to Radovis by the end of this month. It is interesting that the fax had no address, seal, no information on the buyer's intentions, price he had paid and under what terms, nor any indication of his future plans regarding the workers. That is why they consider this fax a fake and stubbornly insist on seeing Prime Minster Georgijevski personally, who is these days avoiding the press like the plague. The miners demand that the concluded transaction be cancelled and the mine offered first to them, under the same conditions, which they asked for long time ago but never got.

They have announced that they will fight with all means, which implies the suspension of production and blockade of main traffic routes in the country. The Council of Trade Unions also sided with the miners, while opposition parties are also trying to take advantage of this opportunity for their aims.

The third thing that makes this sale of copper and gold mine suspicious, which at this moment has on stock waste worth more than the amount it was sold for to "a strategic partner from abroad", are all the event that happened in this enterprise ever since the Coalition for Change came to power.

Namely, it replaced the entire expert management team of the mine with VMRO party members. According to miners, ever since then they dedicated more effort to producing scandals than to increasing production, strove to fill their own pockets instead of taking care of the workers, machines, facilities built in "good old times of successful operation". In only 16 months the new leadership managed to turn the DM 3.5 million profit, which the firm had at the time of their arrival, into DM 2 million worth losses which cumulatively amount between DM 7.8 million and even DM 12 million, depending on the source. The output went down by 30 percent, miners' wages by 12 percent (from DM 515 on average, to DM 450), the supply of hot meals for the second shift was discontinued, and there were attempts at closing the health centre and sell the equipment of the dental clinic, which the miners prevented by setting barricades.

Embittered miners told us that instead of protecting interests of the enterprise and state, the new Director, Stojan Ristov spent DM 120 thousand on fees for his party comrades members of the Management Board and for self-financing, additional DM 570 thousand for the repair of some equipment he entrusted to the so called Bulgarian experts instead to his own engineers who were prepared to do the same for DM 80 thousand. He bought each miner a Bible so as to have, as he had put it, what to swear on watching all the stupidity. The list of spicy details of this kind is a long one. Both the miners and economic analysts are convinced that personal and party interests have brought "Bucim" on the edge of the abyss and placed it on the list of loss-making enterprises which are envisaged "to come under the hammer". The only question is whether that was done out of ignorance and greed of individuals, or with ulterior purpose.

According to the opposition paper "Makedonija danes" (Macedonia Today) the political local gossip has it that Ljupco Georgijevski, Prime Minister and VMRO-DPMNE President personally, who "loves gold", is behind the latest economic scandal. It is only unclear whether he will give the mine to the Bulgarian "Multigrupa" as a compensation for its recently failed investment in the Bitolj sugar factory (which fell through because of workers' protest) with which it would split profit, or only use it to increase the wealth of his party's economic collection, which includes factories, printing offices and trade enterprises. Well-versed government experts and businessmen claim that "Bucim" has 130 million tons of mineral deposits which guarantee profitable exploitation in the next 10 to 15 years, at minimum. Copper concentrate contains 20 to 25 grams of gold which is enough to cover all costs of production so that all other metals, like copper, silver, etc. will mean net profit.

Refuting these speculations only five days later, Minister of Finance, Nikola Gruevski, said that the sale of the only copper and gold mine in Macedonia was legal and transparent. The buyer will pay as much as he should, take over debts and by the end of the week his representatives will come to explain to miners all they want to know and to agree with the authorities the details of the concession for the exploitation of mineral deposits, underlined Gruevski.

At the same time he pointed to negative effect of strong reactions which every sale of some loss-making economic capacity provokes in the country, but failed to explain why is the sale usually carried out in such nontransparent way and by means of strictly confidential indirect agreements. "We send the world negative signals and therefore will never get real strategic partners which we need for carrying out reforms and pulling the country out of economic crisis", underlines Finance Minister, urging the public to tolerance and patience.

Legal experts also agree with this, but openly expressing the doubt in the sincerity of power-holders that they wanted to sell "Bucim" legally, because all the evidence points that the transaction was truly pushed by "the back door" and remind of all loopholes in the law which the Macedonian legislation is full of when concessions are question. Not a single initial binds the new bosses to pay compensation for the exploitation of country's mineral resources to the state, which is a nonsense and contrary to all European norms. They insist that the autumn sale of the national wealth should be stopped until legal uncertainties are removed and while there is still something left to sell.

That is also the opinion of numerous economic analysts. In view of the way in which the Macedonian Government sold until now loss-making firms to foreigners, starting with the Skopje Oil Refinery "Okta", the only one of that kind in the country, Veles Lead and Zinc Smeltery and Kavadarci Ferro-nickel Combine "Feni" to the cherry on the top of the Macedonian speculative privatisation - the Copper and Zinc Mine from Radovis. People from "Bucim" say that the undermining of state's economic foundations must be stopped without delay. They have roughly calculated that by selling these four economic colossuses with feet of clay, Macedonia made DM 20 million and lost DM 300 million which will have to be repaid by at least three to four generations to come.

AIM Skopje

BRANKA NANEVSKA