According to anonymous sources cited by Serbian newspapers, the sale of the Zelezara Smederevo steelworks in Serbia to Russian company UralVagonZavod is imminent, with only a few details reportedly remaining to be clarified. The Russian group is the only investor which has knocked on the Serbian government's door with a view to taking over the assets previously owned by US Steel. Early in October, the Serbian government launched a tender for the sale of the Smederevo mill, with bids due to be submitted by today, October 26. However, UralVagonZavod previously stated it will not bid, preferring instead to conduct private negotiations with the government.
UralVagonZavod is reportedly aiming to acquire the two blast furnaces at Smederevo for free or for a very small sum in view of the large investment which will likely be needed to reactivate the plant. At the end of January this year, the Serbian government bought back the Smederevo plant (then called US Steel Serbia) from Pittsburg-based US Steel for a symbolic amount of $1.
It is thought that UralVagonZavod is in a strong negotiating position. The restart of steel production at Smederevo would save thousands of jobs and contribute significantly to Serbian GDP. A deal with UralVagonZavod would increase political and economic synergies between Belgrade and Moscow and could open the doors to investment in Serbia by other Russian companies.
UralVagonZavod is an important industrial group operating in the field of military vehicles (tanks constitute 20 percent of its production), rail cars, excavators, tractors and metallurgical products.