Copper Investments (COPIN), the investor in Macedonia’s Kazandol mining project, is seeking an apology from Macedonia’s deputy prime minister for his statement that the project was illegally financed, media reported.

Copper Investments is the owner of Sardich MC company, reportedly set up with British and Ukrainian capital, which started developing the Kazandol mining complex in southern Macedonia. However, the Macedonian government decided on March 27 to annul the concession agreement on the exploration of copper, gold and silver at the site, claiming the concessionaire had breached the agreement. The annulment of the contract also came after environmental concerns about the complex were raised.

Sardich MC signed a concession deal on the Kazandol project with the previous VMRO-DPMNE government in 2015. Residents voted against development of the deposit in a referendum last year, and prosecutors are also probing the process by which the concession was issued.

On April 20 in a TV21 debate show, Deputy Prime Minister Koso Angjusev said that authorities launched an investigation to find out how the Kazandol project had been financed. He did not reveal any details, but said that not a single euro came from Ukraine even though the project is believed to be Ukrainian investment, and that investments came from several island states.

According to Angjusev, €18mn has been invested so far in Kazandol, but the real owner of the money has not been identified and he therefore considers the financing was illegal.

Copper Investments responded, saying that Angjusev's statement that an investigation has begun into how the Kazandol mining complex was financed is “worrying”.

“Copper Investments is an investor of the project and information about who are the owners is transparent and accessible document for the public,” broadcaster TV21 said on April 23 citing the company’s officials.

Copper Investments said it appreciates the commitment of the competent institutions to investigate tax and financial misdeeds, but so far, financial controls have found no irregularities at the company.

According to Copper Investments, such statements undermine the company’s reputation.

If the deputy prime minister fails to deliver an apology, Copper Investments warned it will take a legal action due to the “misinformation presented to the public through the mass media”.

Some media reported recently that the government is likely to have to defend itself before the Arbitration Court in London if it terminates the deal on the Kazandol mining project. Broadcaster 24vesti learned that Sardich MC will initiate a procedure against Macedonia and will seek compensation of €380mn if the government unilaterally terminates the agreement for ore exploitation, a move which was effectively taken by the government last month.

The Kazandol site stretches across three municipalities: Valandovo, Bodgdanci and Dojran. Sardich MC launched construction works for the production of copper cathodes at the Kazandol complex near the town of Valandovo in August 2016. Investments of €35mn were planned. 

However, citizens of these three municipalities voted last year to halt the construction of the complex over concerns about environmental pollution.

According to COPIN’s website, the chairman of the company’s board is Skubenko Volodymyr and the executive director is Zoran Majnov. Ace Spasenoski, a former agricultural minister in the VMRO-DPMNE government and former ambassador to Ukraine, serves as non-executive director.