The Grey Chronicles


Understanding GSHL: The Balkan Adventures

BosniaGlobal Steel Holdings Ltd’s [GSHL] venture in the Balkans started with the acquisition of a Lukavac coke oven company in Bosnia in 2003. Global Ispat Koksna Industrija Ltd. [GIKIL] was formed to execute a five-year agreement. GIKIL holds 51% shares while the Government of Bosnia retained the balance. Facilities consist of two (2) coke oven batteries at 700,000 metric tons each. GIKIL supplies 50% coke to Ispat Industries in India, particularly the blast furnace at its Dolvi plant.

Between that time until 2007, GSHL also acquired the Magnohrom Refractory in Serbia, Llamkos Steel in Kosovo, Kremikovtzi Steel in Bulgaria. Global Steel also operates thermal power plants in Bulgaria and Nigeria (New Europe, 2007).

Two years after acquiring Bulgaria’s Kremikovtzi Corp, GSHL acquired Newco Llamkos Steel LLK however, through legal recourse.(New Europe, 2007)

GSHL added an investment program that includes full maintenance with spare parts, automation of the line, speeding up of the process of galvanization and improvement of the work conditions were under process. The investment could be in the range of Rs 100 crore.(The Business Standard, 2007) At 40.870INR to a US$ in May 2007, per FxTrade, the investment would amount to about US$24 Million.

Kosovo, Serbia-based Llamkos primarily produces galvanized sheet. The 130,000 ton-a-year plant employs around 457 workers. The capacity utilization stands at 60%. Llamkos is fed with cold rolled coil from Kremikovtzi. GSHL proposed to invest Rs 1,900 crore (US$465 Million) by 2011 to scale up the annual capacity from 1.3 million ton to 2.2 million ton by 2011. (The Business Standard, 2007)

GSHL also acquired Ivangrad thermal coal mines in Montenegro for an undisclosed sum. The Ivangrad “brown” coal mines, located 140 km north-east of the capital Podgorica, is estimated to have reserves of 150 million tons of thermal coal. (The Economic Times, 2007)

It plans to invest about $600 million for the rehabilitation of existing mines and development of six new mines and washing facilities besides expanding capacity to 3Mtpy. Global Steel will also invest €500 million for a 500 MW power plant fed by Ivangrad coals. The facility may also feed its 280 MW power plant in Bulgaria (The Economic Times, 2007).

The Business Court in Bijelo Polje refused on 19 April 2007 the complaint from the Balkan Energy Company to the decision of the trustee in bankruptcy of the Lignite Mine in Berane to sell the property to Global Steel for €2 million. To sweeten the deal, Global Steel added that it intends to invest about €500 million over the next ten years. Of that sum, about €120 million would be invested into the mine and the rest into construction of a thermo-block.

The request of the Global Steel not to pay customs duties and value added and profit taxes in the next ten years, and providing of land for construction of the thermo block free of charge or under favorable conditions was not accepted. “No reasonable person would accept it,” Dusan Bugarin, the trustee in bankruptcy of the Mine, said.(Pioneer Investors, 2007)

AzerbaijanDivested by Ministry of State of the Republic of Azerbaijan, the mining operation at Dashkesan Iron Ore mines was discontinued after the disintegration of USSR. It is believed to have a total reserves of 138 million tons.

GSHL operates a 1.1-Mtpy Iron Ore Concentration Plant through wet-magnetic dressing process with iron composition of concentrate at 62% Fe.


Pioneer Investors in South East Europe (2007). Global Steel deal valid, Metals — Serbia & Montenegro. Online: Pioneer Investors in South East Europe, 05 July 2007. back to text

The Business Standard (2007). Global Steel buys Newco Llamkos Steel LLK, The Business Standard. Online: MJunction Services, 31 May 2007. back to text

The Economic Times (2007). Global Steel buys Balkan coal mine, The Economic Times. Online: Article Archives, 02 June 2007. back to text

The New Europe(2007). Global Steel to invest 1.1 bln Euro in new deal, The New Europe. 733. Online: The Media Company S.A, 09 June 2007. back to text

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