The Trepca mining complex: How Kosovo's spoils were distributed

WSWS - By Paul Stuart
28 June 2002

In northern Kosovo, near the town of Mitrovica, sits a huge
dilapidated industrial site known as the Trepca mining complex.
During the 1980s, it employed 20,000 workers and accounted for 70
percent of all Yugoslavia's mineral wealth. One economist described
Trepca as a "colossal conglomerate composed of more than forty mines,
foundries, and subsidiary plants-which [at its height] generated 25
percent of the entire regional industrial production and figured
among the principal exporters of the ex-Yugoslavia." According to the
same study, "In the subsoil of Kosovo, one of the richest of Europe,
enormous deposits are hidden of lignite, lead, zinc, non-ferric
metals, gold, silver and petroleum," on top of 17 billion tons of
coal.
The British built core production facilities in the 1920s. During the
German occupation of Yugoslavia in World War II, Stari Trg, the
centrepiece mine, supplied 40 percent of lead used in the Nazi war
industry. The complex also made the batteries used to power the U-
boat fleet. After the Yugoslav partisans drove the Nazis out, Trepca
was maintained as a nationalised industry. During the break-up of
Yugoslavia in the early 1980s, workers at Trepca fought to defend
their jobs against mass sackings. Warring Albanian and Serb
nationalist factions exploited the workers' fears.
Prior to the NATO bombing campaign in spring of 1999, the Yugoslav
government had attempted to privatise Trepca. In 1998, despite
international sanctions, the first phase of a restructuring of the
site was undertaken in partnership with Mytileneos Holdings S.A., the
Greek metals group. According to one study, Mytileneos signed several
contracts with the Serbian agency of foreign trade "for a total of
$519 million." In return, Trepca would receive concentrates for
production and modern mining equipment. However, "Any further
development was hampered by the precipitation of events and by the
collapse of the economic, judicial, and administrative system of
Kosovo," the study found.
Global investor interest in the potential of the site was widespread
before the NATO strikes. On June 22, 1998, the New York Times
reported that the Yugoslav government was negotiating for the sale of
shares in the Trepca complex. It was on Yugoslav President Slobodan
Milosevic's list for eventual auction. The Times sent reporter
Christopher Hedges to the Stari Trg mine in Kosovo during the Kosovo
Liberation Army (KLA) insurgence against the Yugoslav government. He
wrote an article on July 8, 1998, "Kosovo War's Glittering Prize
Rests Underground", describing his visit to the Stari Trg lead and
zinc mine. "As the iron box rattled and squealed on the ear popping
journey, dropping at 18 feet a second, it left behind the potent
symbols of nationalism and ethnic identity scattered in disarray on
the ground above. Instead, in the shrill cacophony, it exposed the
real worth of Kosovo.
"There is over 30 percent lead and zinc in the ore', said Novak
Bjelic, the mine's beefy director.... We export to France,
Switzerland, Greece, Sweden, the Czech Republic, Russia and
Belgium.... In the last three years we have mined 2,538,124 tons of
lead and zinc crude ore ... and produced 286,502 tons of concentrated
lead and zinc and 139,789 tons of pure lead, zinc, cadmium, silver
and gold."
Hedges' visit was a scouting mission, alerting US investors that
while geo-strategic interests were at stake in the Balkans, investors
should not forget the substantial assets to be seized-he estimated
its value around $5 billion.
Shortly after cessation of the NATO bombing which virtually destroyed
all significant infrastructure, attention refocused on
Trepca. "Winning Kosovo's peace", a speech delivered on July 26,
1999, by Samuel R. Berger, assistant to the president for national
security affairs in the US, claimed that Trepca's furnaces had been
used to burn the bodies of 1,500 missing Kosovo Albanians. But after
the withdrawal of Yugoslav troops, the Organisation for Security and
Cooperation in Europe (OSCE) special investigators from France
dismissed the charge of alleged atrocities. Even the Hague Tribunal
admitted it found no evidence. The OSCE reported that the Zvecan lead
smelter (part of the Trepca complex) had not been working since the
commencement of the NATO air war. A US National Public Radio
broadcast in January 2001 resurrected the atrocity claim. Once again,
it was refuted, but this time Hague Tribunal officials questioned the
investigative equipment they had used as "outdated".
Miraculously, during 37,000 sorties by NATO bombers Trepca remained
untouched, whereas other branches of industry were destroyed with
deadly precision. One example was the Yugoslav oil industry. One
account explained that the "Italian oil company ENI had foreseen a
pipeline from Pitesti (in Romania) to the Yugoslav refinery in
Pan.... But US war planes destroyed the Yugoslav complex with
remarkable tenacity." During this period, the Trepca complex ceased
production. Serb and Albanian miners worked without pay to stop the
mines from flooding. The majority of the complex remained under the
control of the Yugoslav authorities. Production at the lead smelting
plant restarted in July 1999.
In February 2000, 25,000 Kosovans marched on the mixed town of
Mitrovica. The aim of the march was ostensibly to reunite the
population with lost relatives, but the KLA had ulterior motives.
They exploited the march and directed it toward driving out all non-
ethnic Albanians-as part of their strategy of creating a Greater
Albania. The KLA also wanted the Trepca complex. They had slowly
encircled the Zvecan plant, cutting off workers' pathways. In advance
of NATO troops, they had seized and placed armed guards at many of
Kosovo's industrial sites. The KLA wanted to be the arbiters in the
transfer of Kosovo's public assets to the free market. Indeed, in
2002, the KLA's political wing, the PDK, would secure the ministerial
posts for public utilities and trade and industry in the Kosovo
assembly, both closely involved in the sale of the province's assets.
Albanian miners who had worked under Serb management at Trepca were
murdered or driven out as traitors. Stari Trg was now in a KLA
controlled area, while the main smelting plant, Zvecan was under
Yugoslav management.
Military seize Trepca
In July 1999, Bernard Kouchner, head of the United Nations Mission in
Kosovo, decreed, "UNMIK shall administer movable or immovable
property, including monetary accounts, and other property of, or
registered in the name of the Federal Republic of Yugoslavia or the
Republic of Serbia or any of its organs, which is in the territory of
Kosovo."
Kosovo was split up into sectors under the control of various NATO
powers, with the Trepca complex being in the French sector. A
conflict ensued between UNMIK and the Trepca management, who feared
that UNMIK would take over the complex, as they had done with
hundreds of other factories in Kosovo. The management and workers at
the plant refused to leave and threatened to defend the plant "to the
death". Therefore, NATO had to temporarily back-down and look for a
new justification for seizing the Trepca complex.
Trepca management's fears were well founded. One example of what
happens when UNMIK demands cooperation took place in July 1999. A
visit to Kosovo by the British Trade International (BTI) mission
headed by trade minister John Battle led to the appointment of an
engineering team to prepare a report on re-establishing generation
and transmissions for Kosovo power stations. At one stage, British
tanks surrounded a power station, refusing access to its former
engineers and allowing the British team a free rein. The following
June, an agency of the European Union awarded the contract to
refurbish the power station to the British Npower corporation, with a
promise of further contracts.
In November 1999, the European Bank for Reconstruction and
Development (EBRD) demanded UNMIK resolve the issue of ownership of
industry in Kosovo, insisting, "Without clarity on this point
investment will not be forthcoming." Demanding immediate action,
Carolyn McCool, head of the Mitrovica office of the OSCE, said of
Trepca, "Something has to be done with the bloody thing."
UNMIK orchestrated a press campaign to prepare public opinion for a
military takeover of Trepca. They declared that Milosevic used Trepca
for money laundering and financing paramilitary Serb units. In the
build up to NATO's seizure of Trepca, propaganda about the
environmental impact of smoke from the Zvecan lead smelter was
widespread. UNMIK began blood tests on the local population, pointing
out that lead content far exceeded recognised world health standards.
After NATO had dropped tens of thousands of depleted uranium bombs,
blowing up chemical and petrochemical plants, and affecting the whole
region for decades to come, Kouchner declared, "The people of
Mitrovica are at risk because of this smelter.... As a doctor, I can
tell you that lead poisoning can have tragic consequences for
families. It can mean irreversible damage to children and
complications for pregnant women." He insisted that the complex had
to be closed down, describing it as "the only remaining Stalinist
KOMBINAT [antiquated nationalised industry] in the world, a dinosaur
with twenty-three activities all linked to each other."
On August 14, 2000 nine hundred British, French, Italian and
Pakistani KFOR troops launched a dawn raid from helicopters. First,
they completely cordoned off the Trepca plant. Troops then entered
the facility, captured workers and managers, tied them up and took
them to the administration centre called "Three Hotel". Workers who
tried to defend themselves were brutally assaulted by troops using
tear gas and plastic bullets. Zvecan came under UNMIK control.
Typical of media reports at the time was that in the Boston Globe:
"Hundreds of NATO-led peacekeeping troops wearing surgical masks
against toxic smoke swept into a Serb-run smelting complex in Kosovo
yesterday and shut it down, then used tear gas and rubber bullets to
disperse protesters.... About 900 peacekeepers cordoned off a 200
square yard area around the huge facility before sweeping into the
mining complex.... Soldiers ... gasped for air as clouds of black and
white smoke belched from ageing chimneys."
NATO has launched wars on several occasions under a humanitarian
pretext, but this must be the first time that it has mounted a
military takeover in order to clamp down on alleged pollution! One
commentator pointed out that surgical masks were a media gimmick
useless against lead fumes he insisted that only a carbon-filter
system would provide adequate protection. One month later NATO troops
from Jordan guarding the Zvecan gates were still wearing surgical
masks.
Senior French ministers supported the capture of Trepca and a press
release from the US State Department praised the capture of Zvecan
and the battle to "rehabilitate" the Trepca complex. Once a series of
workers' protests had subsided, Kouchner said, "Now we can get to
work to bring Trepca back to life, and back to the people of Kosovo."
In a press release on the same day, UNMIK signed an agreement with
the ITT (International Technical Team) Kosovo Consortium, made up of
mining and smelting experts from French TEC-Ingenierie, US Morrison
Knudsen International and the Swedish Boliden Contech. The three-
phase plan would begin with a technical audit, an assessment of
financial viability and asset preservation. In the meantime, the
plant would be closed down.
The same press release admitted that concern for the environment had
been a sham: "Gaining full access to the mines was vital for
producing complete and fully documented ore body assessments. A new
commercial mining law was also essential for investors so that
whoever operated Trepca could be assured sufficient quiet enjoyment
of the facility' to ensure return on investment."
On August 18, 2000, during an UNMIK press briefing chaired by
Kouchner, reporters raised the question of the former owners. The
majority of property in Kosovo was state owned and UNMIK seized it
without opposition, but in a small number of cases, ownership was
challenged. This was the case at the Sharr Cement Works in southern
Kosovo, now owned by a Swedish corporation. Despite the claim for
ownership, UNMIK prepared the Works for tender, advertised it on its
web site and declared that if the court ruled that there was a
legitimate claim then the former owners would be compensated.
According to an article by Richard Merten in Christian Science
Monitor September 15, 2000, "Over the next six months, the UN plan to
explore similar options with 30 of Kosovo's largest factories."
In the same briefing, the criteria for environmental safety was
downplayed and priority was given to "the competitive participation
of Trepca in the world economy." An ITT Kosovo study of Trepca would
be done in conjunction with global trends in the metal markets. In
case of business concerns over security, Kouchner guaranteed that
NATO troops would be made available. When ITT Kosovo presented its 13
volume report on March 6, 2001, UNMIK stated that Trepca
was "promising but not a golden goose", with a "solid core of
profitable assets".
Ever since the military takeover of Trepca, ownership claims and
counter-claims have followed each other. The Mytileneos Holdings S.A.
group is demanding their contract be recognised. The British, who
built the plant in 1927 and supposedly secured a 50-year concession,
terminated in 1941, are demanding compensation. In private, French
ministers are determined not to miss out on the resources in their
own sector as they had done in Bosnia. Trepca has entered the
third "production" phase of its rehabilitation, as UNMIK continues to
digest ITT Kosovo's report. It will not be long before the profitable
parts of the Trepca complex goes the same way as the rest of Kosovo's
industry-put up for sale on UNMIK's web site.