Two bidders offered €27 and €22 million for the FerroNikeli ferro-nickel plant in Kosovo, which is being privatised by United Nations organisation the Kosovo Trust Agency (KTA).
The bidders are allowed to submit a second bid by May 11, the KTA said, at which point it will sell FerroNikeli to the highest bidder or open the bidding process again.
The identity of the bidders was not disclosed, and market sources were uncertain as to who might be interested in the plant. "It's too small for Norilsk, it's too small for BHP. . . I don't know, I think it's a big headache," said a source in the nickel industry.
Another nickel trader thought that one of the bidders could be a Japanese stainless steel producer, while another name suggested was UK-based nickel miner European Nickel, which is developing the Caldag deposit in Turkey.
The first trader said that although most of the necessary equipment at FerroNikeli is still in working order, it would require serious investment after sustaining bomb damage in 1999, and there may be other questions that may deter investors.
"There could be political questions about safety of investment and security of ownership; there might be questions over the orebody, and they don't have a lot in the way of an electrical infrastructure in place right now. There could be lots of hidden costs."
Under the terms of the tender, bidders had to commit to investing €20 million and guaranteeing the employment of 1,000 workers.
When built in 1983, the plant had a design capacity of 12,000 tpy but actual production peaked at 7,000-8,000 tpy.