Serbia's only steel plant, the loss-making Zelezara Smederevo, will restart its second furnace this week to boost both its output and prospects for a sale to a foreign investor, the country's prime minister said on Thursday.

The plant which has two furnaces, has been swallowing $120 million per year in subsidies since 2012, when Serbia bought it back from U.S. Steel for $1 to avert its closure and save more than 5,000 jobs.

In March, after a sale to U.S. steel firm Esmark collapsed, Serbia selected the Netherlands-registered HPK Engineering BV to run the plant and make it profitable until its privatisation.

"We are proud that we have managed to restart something that was dead, that was shut down," Prime Minister Aleksandar Vucic told a news conference.

Vucic will visit the Smederevo plant on Friday to mark the resumption of production at the furnace, which has a monthly capacity of 75,000 tonnes and was shut down in 2011, his office announced on Thursday.

Earlier this week, Vucic told reporters that a "major Chinese company" was eyeing Zelezara Smederevo and pledged that he would "organise fireworks" if the sale materialises.

Offloading the steel mill and other heavily-subsidised state-run enterprises is a condition of a 1.2 billion euro ($1.4 billion) precautionary three-year loan deal between Serbia and the International Monetary Fund.

 

reuters.com

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