Arcelor Mittal to buy steelworks in Smederevo?

As Novosti daily learns, a new strategic partner of the Smederevo steelworks, which was bought last week by the Serbian government from U.S. Steel for USD 1, will most probably be India's Arcelor Mittal, which was also interested in the steel mill back in 2003. Two months ago the management of U.S. Steel offered the Smederevo steelworks to one of the world's richest people - Lakshmi Mittal, asking a total of USD 300 million for that steel mill, but Mittal was ready to give only USD 23 million, that is, the same amount that U.S. Steel had paid to buy the largest company in Smederevo, then in bankruptcy.

Negotiations ended two weeks ago, when the management of Mittal definitely gave up the acquisition of the steel mill in Smederevo because even the lowered price of USD 200 million was not low enough for them.

However, the management of U.S. Steel negotiated at the same time with owners of steel mills in China, who were willing to pay the requested USD 300 million to the Americans, provided that they also got all their businesses in this part of Europe for that price. U.S. Steel then assessed that the sale of the Smederevo-based steelworks to the Chinese under such conditions would endanger the company's positions in this part of Europe, which is why they decided to close the plant in Smederevo. Then the Serbian government stepped onto the stage, wishing to preserve the production and about 5,400 jobs.

- It is hard to speculate, but it seems that India's Arcelor Mittal is still among the most serious potential buyers of the steelworks in Smederevo - Novosti cited a well-informed source as saying.

- Arcelor Mittal's production accounts for close to 10 percent of the global steel production, and what is even more important is that it is already in the neighborhood, since it has bought a steel mill in Zenica, in Bosnia-Herzegovina.

Serbian President Boris Tadic said Monday that the talks with potential investors in the Smederevo steelworks had already commenced.

- The future investor will have to meet two conditions - it must be a steel production operator and have its own iron and coke mines.

Tadic stressed that the state was not specialized in steel production and had no plans to engage in it, but that it had to do everything to preserve jobs and the potential of Zelezara Smederevo.