Dragan Jovanović, CEO of Steam Power Plant and Strip Mines "Kostolac" – The ball is in our yard

(Dragan Jovanović)

Production of 1 billion kWh more energy than in 2008 and new records on daily, monthly and annual basis in production of electric energy and coal are only a good ticket and recommendation for the new investments cycle in business organization "Steam Power Plant and Strip Mines Kostolac" (TE KO "Kostolac"). According to the words of the CEO of that company, Dragan Jovanović, about 1 billion EUR will be invested in revitalization of existing and construction of new capacities, as well as in several projects that will contribute to environment protection prior to 2020.

- We may have not reached theoretical maximum in 2009, but I dare to say that we have definitely reached the real maximum. First of all, we have met all the balance obligations set by the Government of Serbia for year 2009, even though they were bigger than before. We have made some huge step with old machines and equipment – Jovanović said to the present on the occasion of celebration of successful business year in Steam Power Plant and Strip Mines "Kostolac".

The company's performance in 2009 is supplemented by the increase in the capacity of strip mine "Drmno" to 9m tons of coal, which still is not its projected maximum.

- During the previous year, revitalization of mining equipment from strip mines "Ćirikovac" and "Klenovnik" was finished, and one of the biggest investments of our company was put in operation in May - the fifth coal conveyor system at strip mine "Drmno", worth 65m EUR – said Jovanović.

One of the most modern dredges in Europe is currently part of that coal conveyor system. The fifth coal conveyor system at strip mine "Drmno" was put in trial operation on June 2nd, 2009. Ever since, dredge SRs 2000 enables daily production of about 70,000 cubic meters of solid mass.

The preliminary project for expansion of production capacities of strip mine "Drmno" to 12m tons of coal per year is being elaborated, and it should be finished prior to March 2010. The increase in the strip mine's capacity is only one of the projects that will be financed from the credit arrangement with China in amount of about 850m EUR.

"Chinese loan" of 750m EUR to be granted soon

(Dragan Jovanović and Đin Čunšeng)

Namely, the credit arrangement with China is an extension of the national agreement that the President of Serbia, Boris Tadić, signed with Chinese officials in September. It was decided on that occasion that part of the funds would be set aside for the energy sector.

- The Government of RS made the decision to reserve the funds in the budget for year 2010 in order for the state to be able to issue the guarantee for the credit arrangement, which is projected at 850m EUR, while our obligation is to provide 15% of the total amount, so that we should receive about 750m EUR from the loan. The estimate of the possibility of realization of that loan currently, conditionally speaking, depends on us. It is in our interest to realize that loan as soon as possible, but it is also in our interest to hire as many local electric-mechanical engineering companies as possible. Because, of course, it is in the interest of the Chinese to sell their equipment and employ workers through approval of that loan. Technical and commercial negotiations should start any moment and we first expect to hear the position of China concerning the companies they recommend to us and can provide guarantee for.

Investments from the loan

- Realization of two big revitalization projects involving the works on blocks B1 and B2 in steam power plant "Drmno" and construction of the sulfur elimination unit, which is an exceptionally big ecological project, are expected within next three years. These are the works worth about 350m EUR. Already prior to 2014 we expect the production capacity of strip mine "Drmno" to reach and exceed 12 million tons of coal per year, which, once again, represents a precondition for construction of new block B3 – Jovanović told "eKapija".

He said for our portal that the study on preparation works for construction of block B3 was being elaborated by "Energoprojekt" from Belgrade.

According to current plans, that new block should be put in operation in 2021, but, thanks to "Chinese loan" and the company's own funds, the CEO of "Kostolac" is of the opinion that that the production in that new block may start much sooner.

- We are bringing both good and bad things to this region. That is why we invest significant funds in refurbishment of these consequences. Realization of the project for reconstruction of the system for collecting, transporting and disposing ash and slag from the blocks within Steam Power Plant "Kostolac B" is underway, and it should be put in operation at the end of the first quarter of the next year. It is our biggest ecological project ever, worth 30m EUR, and it is financed by the European Bank for Reconstruction and Development. By putting this unit in operation, we will resolve the problem of ash as a by-product of the work of blocks, which pollutes air and subterranean waters – Jovanović explains.

Evaluation of the bids for other similar project for Block A is in progress. This project, worth about 20m EUR, will be financed from the loan of KfW Bank.

Projects to be financed from company's own funds

- The projects that will be financed from our own funds are, as we call them, "the investments in infrastructure" and investments in elimination of harmful effects of the business organization's functioning. That is, primarily, construction of heating system in local community Klenovnik where we are going to invest 50m RSD in the first phase. There are also projects for final regulation of the water supply system in local communities Drmno and Stari Kostolac and construction of complete plumbing system in the village of Kličajevac – Jovanović told "eKapija" and added:

- These are the works for which we plan to set aside 200m RSD in 2010. There are also constant works on reconstruction and extension of hot water pipeline network in settlements Stari Kostolac and Kostolac.

Opportunity for young people – open competition for new workers soon

Jovanović said that the open competition for employment of younger personnal would be announced already at the beginning of year 2010. The opportunity for employment will be given to graduate engineers, while the open competition for employment of workers of other educational profiles will be announced already at the end of February 2010.

The chances for realization of the announced investments of about 1 billion EUR in Steam Power Plant and Strip Mines "Kostolac" are growing. But, as Jovanović explains, it is only up to them whether the plans will be successfully realized.

- The ball is in our yard – says the CEO of "Kostolac".