Incompetent individuals, without knowledge and education, driven by particular interests, make strategic decisions about Montenegrin assets in a non-transparent manner and through direct bargaining, said Professor Branko Radulović, commenting on the situation in Nikšić's Željezara.
He believes that Željezara has a perspective bearing in mind the trends in the EU and the world, as well as the effects achieved by one workplace in the industry in developed countries, the demand for certain types of steel and metalworking products and assemblies.
"A prerequisite for a modern and competitive Iron and Steel Industry, as well as for the perspective of the overall economy, is a competent government. Unfortunately, it was neither the 42nd nor the 43rd Government. In many respects, they were a continuation of the previous DPS governments. Spajić's government does not promise anything good either, if the basic criterion is not the program and expertise, but the party's 'trades'. What is of particular concern is that the leadership of certain parties, as (Milo) Đukanović used to do, makes decisions about the future of strategic entities and sectors," said Radulović in a statement.
At the beginning of the year, after several failed privatizations in the last 20 years, the state-owned Elektroprivreda (EPCG) bought Željezara for 20 million euros. EPCG, after buying the factory from its previous owner, Točelik from Turkey, founded the company EPCG Željezara Nikšić and announced the start of production, which has not happened even almost seven months later.
Branko Radulović says that as a certified scientist and businessman in the field of metallurgy and metalworking, with the highest academic title, research results and economic awards in that field, he has a professional and moral obligation to once again point out the state of steel production in the world in the context of the future of the Iron and Steel Industry and offer a solution.
He reminds that the last time he spoke in the Parliament of Montenegro and at the meeting in Nikšić about how Željezara can be a successful and profitable business entity and a significant development potential as a result of optimal re-industrialization.
"Unfortunately, after only a short period, the worries I had proved to be justified. "These days, new projections are being announced that are not based on knowledge and positive practice, which will again lose significant financial resources, valuable time and the possibility of substantial economic progress," he said.
According to him, electricity from renewable sources is one of the prerequisites for establishing a modern and competitive Steel Plant and the overall economy.
"What is being done with the sale of solar and wind potential and the incorrect valorization of hydro potential is the biggest blow to the country and its future. Various tycoons will collect billions and the citizens of Montenegro will pay the most expensive price for electricity," Radulović warned.
As he says, first of all, it must be kept in mind that steel is the main artery of the economy and that it is used in all sectors.
"According to the data of the World Steel Association, during 2022, 1,885 billion tons were produced in the world. The International Energy Agency estimates that demand for steel will increase by a third by 2050. However, new studies indicate that the world's steel production emits almost one-tenth of the CO2 that causes the greenhouse effect and leads to global warming. About 75% of steel is produced in coal-fired plants, which release CO2 through chemical reactions".
The goals are "green" steel and reduction of CO2 emissions
The next ten years will represent, as Radulović says, a crucial period for changing the infrastructure in steel production with the aim of significantly reducing carbon dioxide (CO2) emissions and environmental neutrality. For this purpose, he reminds, enormous financial resources are allocated, new technologies are introduced, legal regulations are changed, numerous economic measures are adopted.
"Definitely the production of 'green' steel, the use of 'green' hydrogen and electricity from renewable sources are the set goals".
Radulović believes that the call of the Council of the Agency for the Protection of Competition to fulfill the criteria for closing Chapter 8 on the protection of competition and Protocol 5 of the Stabilization and Association Agreement, which treats steel production at the EU level and prohibits state aid in the coal and steel sector, has no basis in practice .
"For example, this year the European Commission approved the payment to Germany of up to two billion euros in state aid to ThyssenKrupp for the decarbonization of the hydrogen steel production process in Dresden. This company will invest another billion euros to restructure production. A direct reduction capacity of 2 million tons and the production of 5 million tons of 'green' steel are foreseen.
The EU's executive body also approved state aid of 850 million euros to the French steel company ArcelorMittel in Dunkirk to switch to "green" or low-carbon hydrogen, biogas and electricity, he said. This company received 280 million euros from Belgium for the same purpose.
"There are other examples of financing the transition of steel production and the process of decarbonization and obtaining a carbon neutral product. In Sweden, 190 million euros were collected from private investors to start the construction of a steel plant in Boden, which will use 'green' hydrogen. Norway's Blastr Green Steel has announced the construction of a steel plant with an integrated hydrogen production facility in southern Finland. The investment is estimated at 4 billion euros".
Slovenian steel producers SIJ Acroni and SIJ Metal Ravne, he said, received a loan of 230 million euros from NLB Bank, which leads a group of nine foreign and domestic creditors, and the European Bank for Reconstruction and Development will participate in the project with 25 million euros. reducing the impact of steel production on the environment.
"Rio Tinto and China Baowu, the world's largest iron ore and steel producers, are teaming up on projects to reduce CO2 emissions from steel production in Australia, and to build a 'sponge' steel pilot plant in China." The company PSI in collaboration with the Brazilian steel producer Villares Metals is developing software for full control of energy consumption during steel production and processing".
Radulović states that global steel production and trade is being reorganized to take climate priorities into account.
"The European Union especially insists on that. It should be borne in mind that China produces about 50% of the total steel production in the world, with technologies that emit huge amounts of CO2. China, as a state, also subsidizes such production. Beijing projects that China's steel industry will reach peak emissions by 2030. Such production technology and support must change".
He reminds that the European Parliament and the Council of the European Union reached an agreement on the introduction of a cross-border tax on CO2 for certain goods imported from countries that do not have adequate taxation of CO2023 emissions. The start of application is October XNUMX.
"Quotas" on steel were also introduced in order for the EU to protect its economy from unfair competition. Companies that export steel to the EU will be required to complete and purchase a CBAM certificate. The cross-border tax will not be paid by countries with the same climate ambitions as the EU. Despite the difference in opinion, the US and the EU are harmonizing the methodology for measuring CO2 emissions from steel and aluminum".
A modern steel plant could generate income of over 250 million euros
Radulović believes that because of all this, the Ironworks in Nikšić has a great perspective and it should be developed as an integrated production of "green" steel with medium and high technological content, with a production structure of forged, structural and special steels, with a production volume of over 100.000 tons/year.
"Such a steel plant would employ around 1.200 employees. Solar panels and hydrogen production should be introduced to reduce the cost of energy used. Modernization and restructuring should be carried out through further ecological modernization of the steel mill, installation of another press, continuous casting and rolling mill. The value of the investment would be around 65 million euros, and the completion time of all works would be around three years. The method of financing can be state aid, state guarantees, grants, assistance and/or commercial lending with a grace period of three years".
As he said, such a modern steel plant could generate income of over 250 million euros, service all obligations and operate profitably.
"Further processing and increasing the technological content would increase the effects exponentially. The study of the modernization of the Ironworks must be of high quality. Organizationally, Željezara should be a part of the company Industrija Crne Gore ad, and the management of EPCG and the mayor of Nikšić should deal with their work, they have too much of it," said Radulović.
Professors are silent, hidden in their offices
He believes that the university professors bear the greatest moral responsibility for the current state of the Nikšić Ironworks and the degradation of all economic resources and potential.
"Hidden in their offices, pretending to be great, they remain silent on all deviations and do not even offer the solutions they present to students in lectures. Has a voice ever been heard from them on all these deviations, let alone offered a solution? There were few who expressed their views clearly and loudly and because of that they were discriminated against and persecuted. There are countless people who signed harmful and fake documents for a handful of dirty money. After the change of government, they received high appanages, and they are still shamefully silent," he said.
He added that "freedom did not wake up there alone".
"That's why the amendments to the Law on Higher Education should structure the salary so that 50% is earned from teaching, and 50% must be earned from scientific and development projects. Those study programs for which there is no interest or market need for such staff in Montenegro should be abolished or completely reformed in accordance with the new development trends", said Radulović.
In order to implement a new economic policy and sectoral reforms and contribute to the modernization and competitiveness of the Steel Industry, it is necessary, as he believes, to form the Institute for Development, Industrija Crne Gore ad, the Development Bank and the Bond Fund.
"Unfortunately, I am increasingly convinced that the future of Montenegro will be bleak, that there will be nothing from reforms and economic revival, that what remains of the autocratic and oligarchic DPS rule will be destroyed or devastated by ignorance, dealings with tycoons and neighbors, direct secret agreements, regardless of whether we will be a member of the EU or not," concluded Radulović.
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