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OPM Kostolac plc is a coal-mining subsidiary of Elektroprivreda Srbije (EPS), Serbia's state-run power utility.
OPM Kostolac's mines produce approximately one quarter of the lignite in Serbia.
Coal expansion deals with China
In 2009, China president Hu Jintao and Serbia president Boris Tadic signed a 15-year agreement for China to invest $1.25 billion in Serbia’s infrastructure and energy through OPM Kostolac. The deal is the latest in a series of energy projects agreed over the past two years with China, along with Russia, when Serbia faced international isolation in the 1990s.
The initial plan was for a new power bloc to replace the two existing plants at the TPP Kostolac Power Plant, with respective installed capacity of 100 megawatts and 200 megawatts. The plants were to be decommissioned in 2017 and 2024 and replaced with the new one, fueled by the Drmno mine, which has around 350 million tons of remaining coal reserves, and the planned acquisition of the nearby Dubravica field, which contains around 400 million tons of recoverable coal reserves. The $700 million new power bloc was expected to produce 2.5 billion kilowatt-hours of electricity a year based on 7,000 operating hours, and would start generating power between 2014 and 2020.
In October 2012 it was reported that Serbia plans to apply to a $10 billion fund that China earmarked for investments in 16 countries of central and eastern Europe. The loan would be for the $700 million project to add a new 350-megawatt plant in the Kostolac power generation complex and increase coal output at the Drmno mine from 9 to to 12 million tons a year. China Machinery Engineering is already involved in an upgrade of two plants at Kostolac B, supported by a $344 million 20-year loan from the Export-Import Bank of China, or Exim Bank.
On October 20, 2011, EPS said it had signed a preliminary deal with a Chinese consortium to jointly build a 744 megawatt coal-fired unit at an estimated cost of more than 2 billion euros ($2.7 billion). Under the deal, a consortium that includes China Environmental Energy Holdings and Shenzhen Energy, and EPS, will form a joint venture for the future project in the southwestern town of Obrenovac, part of its TPP Nikola Tesla Power Plant power complex. An upgrade of the Radeljevo coal mine will feed the plant.
Articles and Resources
- Elektroprivreda Srbije, "About Us: Basic Data: Facilities for coal production, processing and transport OPM "Kostolac"", Elektroprivreda Srbije website, accessed July 2011.
- Elektroprivreda Srbije, "About Us: Basic Data: Facilities for coal production, processing and transport ", Elektroprivreda Srbije website, accessed July 2011.
- Gordana Filipovic, "Serbian Mine Sees Chinese, Vattenfall Agreements for Upgrades" Bloomberg, Nov 1, 2011.
- Misha Savic, "Serbia Will Seek Chinese Funding to Expand Kostolac Power Plant," Bloomberg, Sep 27, 2012.
- Maja Zuvela, "Serbia, China sign deal for coal plant, mine" Reuters, Oct. 20, 2011.