Montenegro seeks to take over key aluminium producer

PODGORICA, May 12 (Reuters) - The Montenegrin government wants to take control of the indebted Russian-owned Kombinat Aluminijuma Podgorica (KAP) aluminium producer, the country's largest industrial enterprise, a top official said on Tuesday. "The only issue is how much time we need for that as we want to avoid jeopardising the outcome of a possible arbitration procedure," Igor Luksic, deputy prime minister said in a Budva TV broadcast. Kombinat Aluminijuma Podgorica (KAP), Montenegro's top exporter accounting for 50 percent of country's exports, runs at a loss because of falling global metal prices and high operational costs. KAP, which has 2,100 workers, has decided to halve production to around 60,000 tonnes in 2009. It defaulted in 2008 on tax, duties, VAT and other payments to the state and state-owned companies. In March, the government offered KAP guarantees for a 20 million euro loan if its Russian owners dropped a court case against Montenegro. KAP's owner En+ Group, part of Russian holding company Basic Element, launched a case before a German arbitration court in 2008 seeking 300 million euros ($396.5 million) in damages over an alleged false evaluation of KAP assets at the time of sale. Luksic said Montenegro's legal team "was dealing with the issue in the right way." "We must end this agony in the KAP because everyone, the people and the workers are expecting that from us, I also believe the strategic partner is aware it lost its track on this issue," he said. Montenegrin media also reported that KAP's workers will stage a protest in downtown Podgorica on Wednesday demanding overdue payments for March. (Reporting by Bojana Stanisic; Writing by Aleksandar Vasovic, Editing by Peter Blackburn) Keywords: MONTENEGRO ALUMINIUM/ (aleksandar.vasovic@thomsonreuters.com, +3811 1311 4275)