Bulgarian Oligarch Hires Troubled Metallurgy Workers at PM's Request

Business » INDUSTRY | May 20, 2012, Sunday // 18:26
Bulgaria: Bulgarian Oligarch Hires Troubled Metallurgy Workers at PM's Request Wealthy Bulgarian businessman Nikolay Valkanov has received much praise from the Cabinet and the syndicates for stepping in to resolve the crisis at the Gorubso Madan Mines in the spring of 2012. Photo by Capital Weekly

The new concessionaire of Bulgaria's Gorubso Madan Mines, wealthy businessman Nikolay Valkanov, has created jobs for 60 workers from the troubled Lead and Zinc Complex (LZC; OTZK) in Bulgaria's Kardzhali.

This has been announced by Plamen Dimitrov, head of the Confederation of Independent Bulgarian Syndicates (KNSB), on Radio K2 on Sunday.

Dimitrov explained that Valkanov, who is the owner of Minstroy Holding, opened the new jobs at the request of Bulgarian Prime Minister Boyko Borisov.

"The Gorubso Madan Mines will sign with Economy Minister Delyan Dobrev the concession contract for a new deposit on May 31. This is a wonderful example of good work with social responsibility and corporate responsibility," the head of the KNSB declared, apparently praising the responsibilities assumed by Nikolay Valkanov.

"We at the KNSB together with Prime Minister Borisov and Economy Minister Dobrev are seeking a solution of the grave problem of the workers from OTZK Kardzhali. At the request of Borisov, Valkanov provided jobs for these people in order to prevent a social, and potentially, an environmental disaster if OTZK stops working completely," Dimitrov said referring to the crisis situation at the largest Bulgarian non-ferrous metal producer, the Lead and Zinc Complex in the southern city of Kardzhali.

Dimitrov noted that Bulgarian Economy Minister Dobrev is happy with "the success" that Minstroy Holding has achieved after the assuming the concession of Gorubso Madan Mines notorious tycoon Valentin Zahariev's Intertrust Holding, which also owns the OTZK in Kardzhali, earlier in the spring.

"The mines are working, the people are working, the tunnels have been reinforced and equipped with new lighting, people are safe, their families are okay, the town of Madan is developing. What is more, Nikolay Valkanov has repaired the stadium in Madan and Prime Minister Borisov will soon come there with his football team Vitosha Bistritsa in order to open the stadium in a match against the local team," the syndicate leader elaborated.

"If the Lead and Zinc Complex doesn't start working soon, there will be an economic crisis in the entire region," the KNSB chief warned

The largest Bulgarian producer of non-ferrous metals, the Lead and Zinc Complex (LZC; OTZK) in the southern city of Kardzhali has been in trouble for at least several months now, with many fearing that the heavily indebted LZC, which has been out of operation in the past four months, will have the fate of Kremikovtzi, the behemoth steel mill near Sofia, which no longer operates as a result of years of mismanagement.

The creditors and trade unions have agreed to seek a way to fuel the Lead and Zinc Complex in Kardzhali again.

A few weeks ago representatives of the Polish consortium Silesia, who are interested in renting the plant, paid a visit to it followed by representatives of the French bank BNP Paribas.

On April 12, after 40-day protests over delayed salaries, the workers at the Lead and Zinc Complex received some of their money, totaling BGN 500 000, which were distributed on as a result of the sale of another troubled company, the Gorubso-Madan mining firm.

Both the LZC and Gorubso-Madan were part of Intertrust Holding owned by Bulgarian tycoon Valentin Zahariev. However, both have descended into debt, leading to workers' protests, and an intervention by the state arranging the sale of both companies by Intertrust Holding.

Zahariev owes a total of BGN 1.4 M in unpaid salaries to the Lead and Zinc Complex workers, and the payment of the January salaries came after 42-day protests by the plant workers which started in Southern Bulgaria and reach the capital Sofia. Zahariev has raised the needed cash through the sale of the Gorubso mines in the southern town of Madan.

Bulgaria's government has indicated that the LZC in Kardzhali is also for sale, and that there are three bidders – one Bulgarian and two foreign – vying for it. However, Bulgaria's Finance Minister and Deputy PM in charge of the economy Simeon Djankov never specified which the bidders were, with the news about the interest expressed by a Polish consortium first emerging on Friday, April 20.

Initial data indicate that Zahariev's debts already amount to BGN 360 M, and are way beyond the earlier known figure of BGN 320 M.

A total of 519 employees of the Lead and Zinc Complex in Kardzhali, the leading Bulgarian non-ferrous metals producer, had not received salaries for half a year.

In early April, the workers filed personal claims in Court against the owner of the plant, Bulgarian oligarch Valentin Zahariev, who is also know for mismanagement of what used to be the largest steel-maker in Bulgaria, the now bankrupt Kremikovtzi plant near Sofia. They demand the replacement of the entire management, starting with him.

The Lead and Zinc Complex is still owned by Zahariev, the now-former owner of the Gorubso Madan metal mines. Gorubso Madan miners finally received their overdue wages after they had been staging protests for two weeks.

Businessman Nikolay Valkanov has taken over the concession of the Gorubso Madan metal mines from Valentin Zahariev. Valkanov is a former VP of Multigroup, the company of Bulgarian tycoon Iliya Pavlov, who was shot dead in 2003. Valkanov currently owns "Minstroy" and Gorubso Zlatograd, another mining company in Southern Bulgaria, and has a concession of the "Varba" mine.

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Tags: delayed salaries, Madan, Gorubso, miners, Valentin Zahariev, concession, Delyan Dobrev, Lead and Zinc Complex, protest, Gorubso, Madan, Kardzhali, rally, protest, OTZK, Simeon Djankov, finance minister, Nikolay Valkanov, Multigroup, Valentin Nikiforov, KNSB, Confederation of Bulgarian Independent Syndicates, syndicates, Poland, Polish, consortium, Silesia Consortium, BNP Paribas, Plamen Dimitrov
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