SARAJEVO (Reuters) - ArcelorMittal (AS:MT) will postpone the redundancy of 300 out of 800 workers at its iron ore mines in Bosnia while seeking to resolve outstanding issues with a regional government there, the company said on Friday.
The world's largest steelmaker, whose plant in the central town of Zenica processes iron ore from its Omarska mines in Prijedor, said in May it planned to cut output by a third to 1 million tonnes and cut jobs from Sept. 1 to prolong the life of the mines.
In January, its application to bid for the Serb Republic government's stake in the nearby Ljubija iron ore mine was rejected, prompting the steelmaker to warn of risks to the future of mining in the area.
Ljubija would have provided it with more sustainable ore supplies over a longer period. The company is still pressing for involvement in the project, according to sources.
The firm said in a statement it was in talks with the government of Bosnia's autonomous Serb Republic, where the mines are located, about "serious issues that currently stand in the way of a long-term sustainable future" of its mining business.
It said it had "made it clear that without a satisfactory resolution of these matters, it will have no choice but to reduce current operational capacity and regrettably, ArcelorMittal Prijedor's workforce".
ArcelorMittal has idled a series of plants across Europe, cut production in others and slowed a planned ramp-up of production at Ilva, Europe's largest steel plant that was acquired by ArcelorMittal last year.
It said it was looking at further cost-saving initiatives, such as reducing the working week, cutting contractor costs and using less expensive raw materials.