Bosnia's sole aluminium smelter, Aluminij Mostar, said on Wednesday it would purchase a new melting and casting furnace in January to upgrade its foundry and boost annual output by an additional 50,000 tonnes.
Aluminij will turn to lenders to buy the furnace from the Austrian company Hertwich Engineering GmbH, while the world's top commodities trader Glencore International will provide the banking guarantees, Aluminij Mostar spokesman Darko Juka told Reuters.
Juka said the foundry line upgrade would be completed by the end of 2012.
Bosnia's second largest exporter, Aluminij Mostar is expected to return to profit this year and produce a record 128,500 tonnes of primary aluminium, after posting a loss of 13.4 million Bosnian marka ($9.6 million) in 2010 as the global crisis slashed demand for the metal.
In March this year, Aluminij signed a two-year deal with Glencore that will ensure continuous deliveries of alumina to Aluminij and of aluminium to Glencore from 2012 to 2014.
The smelter said last week that its exports in the first half of 2011 increased by 23.2 percent compared to the same period last year to 240 million marka. ($1=1.40 Bosnian marka)
(Reporting By Maja Zuvela; editing by Keiron Henderson)