Professor Branko Radulović has called on Special State Prosecutor Vladimir Novović to urgently examine the business credibility of the lessee of Željezara Nikšić to prevent potential negative outcomes. Radulović emphasized that a thorough investigation is crucial to assess the lease agreement’s validity and prevent further damage to the steelworks.
“Simply searching for the partner company 8B Capital S.A.-Lugano and their representative Igor Šamis online reveals concerning information. It is also essential to scrutinize the lease conditions. It’s evident without expert knowledge that this arrangement could be detrimental and jeopardize any chance of transforming Željezara Nikšić into a modern, eco-friendly, and profitable enterprise,” Radulović, a member of the Movement for Changes (PzP), stated.
He expressed concern that if the Special State Prosecutor’s Office (SDT) does not address the issue, Montenegro might lose another valuable developmental asset that could contribute to economic diversification and added value.
“I have repeatedly pointed out that Željezara could thrive if it is modernized and restructured efficiently, managed by a competent team, and supported by a knowledgeable Government and professional institutions. However, this has been disregarded,” Radulović said.
He highlighted that distinguished regional university professors have previously asserted that Željezara has promising prospects, citing examples of successful steelworks in Slovenia as evidence.
“Unfortunately, these arguments were ignored by Prime Minister Milojko Spajić and Minister of Energy Saša Mujović. They have also disregarded successful European and global practices in other areas, including energy and the aluminum industry,” Radulović noted.
Steel, he pointed out, is a critical component of the economy and is used across various sectors. According to the World Steel Association, global steel production reached 1.88 billion tons last year. The International Energy Agency predicts that steel demand will grow by a third by 2050.
“However, studies show that global steel production emits nearly 10% of the CO2 responsible for global warming. About 75% of steel is produced in coal-based plants that release CO2,” Radulović explained.
He emphasized that the next decade is crucial for transforming steel production infrastructure to significantly reduce CO2 emissions and achieve environmental neutrality. This will involve substantial financial investment, new technologies, regulatory changes and economic measures. The goals include producing “green” steel, using “green” hydrogen, and renewable energy.
“The call for adherence to EU competition protection standards and Protocol 5 of the Stabilization and Association Agreement, which prohibits state aid in coal and steel sectors, is not practical. For instance, the European Commission approved about two billion EUR in state aid for ThyssenKrupp to decarbonize its steel production with hydrogen in Dresden. This company will invest an additional billion EUR for restructuring,” Radulović said.
He noted that leading companies like Rio Tinto and China Baowu are collaborating on projects to reduce CO2 emissions from steel production in Australia and building a sponge iron pilot plant in China.
“Global steel production and trade are being reorganized to align with climate priorities, with the European Union taking a leading role. China, which produces about 50% of the world’s steel using high CO2-emitting technologies, is subsidizing this production. Beijing aims for peak emissions in its steel industry by 2030. This technology and support need to change,” Radulović added.
The European Parliament and Council have agreed on a cross-border CO2 tax for certain goods imported from countries without adequate CO2 emission taxation. Steel quotas have also been introduced to protect the EU economy from unfair competition. Exporting steel companies will need to obtain a CBAM certificate, and the cross-border tax will not apply to countries with similar climate ambitions to the EU’s.
“Given these factors and the significant impact of a single job in developed countries, as well as the demand for various steel and metal products, Željezara Nikšić has a bright future. It should be developed as an integrated producer of ‘green’ steel with medium to high technological content, with a production capacity of up to 200,000 tons annually,” Radulović concluded.
Such a modern steelworks could employ over 1,500 people. Introducing solar panels and hydrogen production would help reduce energy costs and achieve decarbonization.
“Modernization and restructuring should involve further ecological upgrades to the steelworks, installation of additional equipment like presses, melting units and rolling mills. The investment value would be around 70 million EUR, with equipment installation taking about three years. The cost of introducing ‘green’ hydrogen is not included. Financing could come from state aid, guarantees, grants, and/or commercial credit with a three-year grace period,” Radulović assessed.
He believes that a modern steelworks could generate over 350 million EUR in revenue, cover all obligations, repay modernization loans and operate profitably. Further processing and technological advancements would enhance these benefits.
“A high-quality study on the modernization and restructuring of the steelworks should be conducted by the University of Montenegro. Organically, the steelworks should be part of a newly established state enterprise, Industry of Montenegro. Elektroprivreda (EPCG) should focus solely on developing ‘green’ energy and remain state-owned,” Radulović said.
He concluded that the future of Željezara Nikšić depends on the competence and actions of the Government.
“The University of Montenegro must provide full expert knowledge. If not, it will be another reason to change the current parliamentary majority and dissolve the relevant faculty,” Radulović concluded.
