Coal at a Crossroads in the Balkans

n the town of Stanari, in the northern hills of Bosnia-Herzegovina, the Chinese came and the Chinese went. Jerimic M. Eoran, 43, a local coal miner whose family has worked in the open pit lignite mine here for three generations, recalls lignite mining in the area slowing progressively through the years. By 2004, operations had nearly come to a complete stop.

All that changed in 2012 with the arrival of the Chinese construction and engineering crews. That year, work began on the building of the brand new 300 MW Stanari thermal power plant, or TPP Stanari.

Key Points: 

In 2016, construction was completed for Bosnia-Herzegovina’s first new coal-fired power plant in decades, made possible by Chinese financing. Five other coal power projects in the country are in planning with Chinese financing.

Given Bosnia-Herzegovina’s lagging economy and lack of jobs, employment positions at state-owned mines and power plants is highly prized for those with political connections. Local politicians tend to use such projects as political capital. 

A loan guarantee for one Chinese-financed coal project, Tuzla 7, could constitute illegal state aid under EU rules. This and other concerns regarding state aid, public procurement and environmental impact could cause problems for Bosnia-Herzegovina’s bid for EU membership. 

Coal’s new lease on life in Stanari began in 2005, as Energy Financing Team (EFT), a London-based company founded by Serbian businessman Vuk Hamovic, took over control of the mine and announced plans to build a coal power plant. China Development Bank stepped in to extend a 350 billion Euro loan, and Dongfang Electric, a Chinese company headquartered in Sichuan province, won the bid for construction of the plant. A contract was signed in late 2012, and the Chinese arrived on site soon after.

Eoran remembers hundreds, sometimes thousands, of Chinese workers camped near the building site. Through faltering interactions, he managed to pick up odd details about Chinese life and culture. “It turns out that all Chinese names have special meanings,” he explains. But the detail that made the most lasting impression was a story he didn’t dare pursue further. “One Chinese worker received news that his father had died,” he tells me. “He wanted to go home and attend the funeral, but the boss wouldn’t allow it, so he committed suicide. He hanged himself.”

This rumor, which spread among the local miners in Stanari at the time, is Eoran’s strongest lingering impression of the Chinese. Once construction was completed in 2016, the Chinese workers packed up and left. For a while, a few engineers remained to ensure that the EFT team could operate the plant smoothly. But even the engineers are gone now.

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