- Collaboration agreements signed by the
Company with SASA group of FYROM and RMHK TREPCA mining group of New Yugoslavia
have been the very first sizeable collaboration agreements of Mytilineos
SA abroad. Nevertheless, they are bound to constitute the "model"
on which the Company is relying at its present development and growth
stage. Therefore, the character and the way of application of these agreements
will have to be elaborated. Specifically: * Agreement with SASA group of
FYROM is the commercial character and involves 86 million U.S. dollars.
By virtue of this agreement, Mytilineos SA has undertaken exclusive exploitation
of the group's sulphurous zinc and lead ores. Agreement is valid until
the year 2004. In exchange for the right of exclusive marketing, Mytilineos
SA has undertaken to finance the mine's production. * Contract with RMHK
TREPCA ores group of New Yugoslavia will last five years, involves 517
million U.S. dollars and came into effect on June 1st, 1997. According
to this contract, Mytilineos SA will be channeling 100.000 tons of metals
per year into the market (lead and zinc).In addition, the Company undertakes
financing of the group's production. This agreement forms an extension
of a trade agreement to the tune of 135 milllion dollars, with the very
same group, that had been signed in 1995 and had terminated on May 31,
- Such agreements exceed by far the frameworks
of mere trade deals. They are agreements in which the one contracting party
undertakes: - Financing of the operation of mines and ores process factories,
- Finding and supplying the latter with raw materials (ores) for processing
by factories, - Providing them with essential mechanical equipment to modernization
of production procedure, - Sharing of know-how to effective operation of
the units, - Exclusive marketing of a large part of the factories' production
in exchange for financial and technical assistance.
- Through these contracts Mytilineos SA
is rendered, in essence, a financier and co-manager of collaborating groups,
although, at present stage, it doesn't participate in the companies' capital.
Yet it holds aprivatization. The company is thus safeguarded against a
probable buy out of its suppliers by competitors. Business deals of this
type tend to prevail in the eastern European countries, as they respond
better to the needs of local producers. The latter, even though they usually
possess a significant production potential, are deprived of working capital
and the necessary knowhow in order to function in the international competitive
environment. Companies such as Mytilineos SA, that adopt a long-term collaboration
policy with local producers, enjoy special treatment and revel in their
exclusive marketing rights on company products.
- BOR Mining Group
- BOR Mining Group (RTB Bor) was founded
in 1903 and is one of the main mining complexes in Europe. Today it constitutes
an integrated copper and precious metals production and processing unit,
while it also manufactures electric, mechanical and other devices. The
group consists of a complex formation of individual companies which employ
21,000 people. It is one of the most important ecomonic units in New Yugoslavia,
with an acute export orientation.
- Yearly production of main metals of the
Bor Complex is itermized as follows: 165,000 tons of copper metal, 30 tons
of precious and rare metals, 70 tons of selenium, 800,000 tons of pyrite
grading at 61% iron.
- Moreover, Bor complex includes other
significant metals and materials processing units, mechanical equipment
assembly lines, precious metals processing and chemical products manufacturing