TIRANA, April 20 – The Albanian government has extended the term of a concession contract to a Turkish-Chinese company operating in the country’s mining industry for another 15 years until the end of 2043.
The contract extension comes as the Beralb concessionaire has been operating in the country for 15 years and exceeded its investment targets by investment a total of $70 million, more than double compared to its original contract expiring in 2031. The government say the company has also met production targets of more than 200,000 metric tons a year and reached processing capacity of 600,000 metric tons a year already halfway the initial 30-year concession.
The contract extension also comes at a time when commodity prices have been suffering since mid-2014, with a negative impact on the country’s key mineral and oil exports, employment and government revenue.
“The involvement of serious and stable investors under conditions of unfavorable situation in the mining and raw material market and pessimistic international expectations in the mid-term is vital for the further development of the mining sector in the country,” says the government in its report to the draft law on the contract extension.
Back in 2015, the Turkish-Chinese consortium operating a copper plant in the northern Albanian district of Puka suspended its operations for several months due to sharp cut in international base metal prices, leaving hundreds of workers jobless.
The concessionaire has been involved in copper extraction and enrichment in northern Albania where it operates state-owned assets since 2001.
The concessionaire was fully Turkish-owned until 2014, when a consortium led by China’s biggest copper producer, Jiangxi Copper Corporation, bought a 50 percent stake in Turkey’s Nesko Metal Sanayi ve Ticaret’s Albanian mining operations for $65 million. Nesko, owned by Turkish metal trading firm Ekin Maden, runs copper mining businesses in Albania through its Beralb subsidiary which has a capacity of 600,000 tonnes of copper ore a year.
The contract extension also envisages the concessionaire will continue to benefit from incentives such as a reduced mining royalty of 3 percent and corporate income and dividend tax of 10 percent, compared to a current 6 percent royalty and 15 percent tax rate.
Albania’s copper reserves in fifty existing mines and deposits are estimated at around 32 million tonnes.
Back in 2016, the Albanian government also extended Albanian-owned Balfin Group’s Bulqiza mine concession by another 10 years until 2040. The country’s biggest mine of Bulqiza was acquired by Balfin, one of the country’s biggest companies, in 2013 from Austria-based DCM Decometal.
The slump in commodity prices since mid-2014 has severely affected Albania’s oil and mining industry, producing the country’s second largest exports, paralyzing investment and cutting staff with a negative impact on the country’s economy.
The 2017 oil and mining prospects seem more optimistic as commodity prices are picking up.
