Officials Speak about Details of Chiatura Manganese Privatization

Georgian Economy Minister Lexo Alexishvili and State Minister for Economic Reforms Kakha Bendukidze dismissed Ukrainian company Interpipe?s allegation that privatization process of Chiatura manganese mining was non-transparent, as ?absurd? and explained Georgian government?s decision to sell the enterprise to the Russian EvrAzHolding and Austrian-Georgian DCM-Ferro as an attempt to avoid ?corporate war? in Georgia.

The Ukrainian giant Interpipe Corp. which is owned by the influential tycoon Viktor Pinchuk, son-in-law of outgoing Ukrainian President Vladimir Kuchma, was among those companies bidding for a privatization package including manganese mining and Vartsikhe hydro power plant. However, after the EvrAzHolding and DMC-Ferro decided to apply with the joint bid offering USD 132 million, the Georgian government took a decision in favor of Russian and Austrian-Georgian companies.

According to the Georgian daily 24 Hours, at a news conference on January 19, Georgian Economy Minister Lexo Alexishvili admitted that bid made by the Ukrainian company was ?more perfect? than of its competitor companies; however he added, that Ukrainian company was demanding from the Georgian side ?to force the Austrian company to give up its shares in the Zestaponi Ferro-Alloy Plant, which would have led to corporate war in Georgia.?

The Zestaponi Ferro-Alloy factory, owned by DMC-Ferro represents the part of the technological process necessary for functioning of the Chiatura manganese plant, as the Zestaponi Ferro Alloy is the major customer of Chiatura manganese plant?s product.

State Minister for Economic Reforms Kakha Bendukidze said at a news conference on January 19, that Georgia would have ?blown its investment image? in case of yielding Ukrainian company?s proposal.

?They [Interpipe] offered us to use banditry methods. And doing this [forcing DCM-Ferro to give up shares in Zestaponi Ferro Alloy Plant] would have been illegal. On the other hand, no one would have ever invested in Georgia in case we acted this way,? Kakha Bendukidze said.
 
According to the Georgian Economy Ministry Russian EvrAzHolding and Austrian-Georgian DCM-Ferro will set up a holding to jointly run the Chiatura manganese plant.