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The Government of the Republic of Serbia

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Second blast furnace in Smederevo steelworks operational again

Smederevo, 9 October 2015

Prime Minister Aleksandar Vucic attended today the commissioning of the second blast furnace at Smederevo steelworks Zelezara Smederevo, and pointed out that this manufacturing facility will bring Serbia a 1% GDP growth.

Addressing experts and workers at Zelezara Smederevo, Vucic said that as of today they will be making new $400 million per year, which is a new 1% GDP growth for the entire country in the coming year, with the reminder that the first furnace already gave the same result.

The Prime Minister said that the negotiations are underway with the strategic Chinese partner Hebei Iron and Steel Group Company Limited (HBIS Group) on investing in the steelworks, and explained that this is the second or even the most powerful steel plant in the world.

The Chinese company is interested to invest at least €300 million in investment for galvanising, he said and stressed that this would mean a new life not only for Smederevo, but also for the entire country.

According to Vucic, the potential partners from China were presented the condition of no layoffs, but rather hiring new workers.

Vucic pointed out that steel prices are currently at their lowest level in the world, or $380 per tonne, and expressed hope that it rises to at least $480 per tonne.

In that case, Zelezara Smederevo would become profitable and would be earning extra money, which is a prerequisite for an increase of wages.

Executive Director of the HPK Management in the steelworks and supervisory board member Peter Kamaras said that this is a big day for Serbia, bearing in mind that after almost five years, the second blast furnace is again operational.

The furnace that is now put into operation, began working in 1971 and was shut down for the first time in 1987 because of general overhaul, when the modern blast furnace 2 was put into operation, with a maximum capacity of 95,000 tonnes per month.

When it comes to starting this furnace, it takes 10 to 15 days to complete the stabilisation of production, after which it is expected to achieve maximum working capacity of 75,000 tonnes per month.