Kosovo nickel plant attracts bid of 49.5 mln euros

PRISTINA, Serbia and Montenegro, May 11 (Reuters) - Kosovo's privatisation body declared a 49.5 million euro ($63.59 million) bid provisional winner in the run-off to buy the "Feronikelli" mine, the province's most significant sell-off since the 1999 war.

Two companies submitted final-round bids of 49.5 and 33 million euros for one of the largest nickel and mining complexes in Europe, up from initial offers of 27 and 22 million.

Sources within the U.N.-run Kosovo Trust Agency (KTA) named the higher bidder as the Albania-based mining firm Adi-nikeli.

"We declare the higher bidder the provisional winner ... but it is subject to debate within the board of directors," KTA director Jasper Dick told reporters. The board meets on May 26.

The privatisation of the "Feronikelli" mine in the central Kosovo town of Glogovac is the largest by the U.N. since it took control of Serbia's southern province in 1999.

Kosovo is rich in nickel -- used to produce steel -- and lignite, but its mines are in desperate need of investment after years of neglect and mismanagement in the 1990s.

U.N. officials say the industry could have a major impact on stagnant Kosovo's economy and provide thousands of jobs. A jobless rate of more than 50 percent has fueled bouts of violence by Kosovo Albanians impatient for independence.

Ferronikelli, which was bombed during NATO's 1999 air war against Serbia, is estimated to have 13 million tonnes of nickel ore in three open-pit mines valued at 2 billion euros.

At full capacity, the mine could produce 100 million euros in annual revenue. The tender states the buyer must invest 20 million euros over the first three years and employ a minimum of 1,000 workers.

Kosovo's suspended status means its privatisation process has been dogged by ownership disputes. The KTA has sold only around 30 of 500 socially-owned enterprises -- a unique corporate model of old socialist Yugoslavia -- since May 2003.

To speed up the process, the U.N. adopted a regulation in April allowing sales to go ahead before ownership is determined.

The 78-day NATO bombing campaign in 1999 drove out Serb forces accused of atrocities against Albanian civilians while fighting separatist rebels. The West hopes to decide this year whether Kosovo becomes independent or remains part of Serbia.

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