Montenegro’s Ministry of Energy and Mining has ranked MIH Metal Development first in the tender for a new concession covering the Šuplja Stijena zinc and lead mining district near Pljevlja, after the other two submitted bids were rejected during the administrative and eligibility review.
The consortium led by MIH GmbH of Horstmar, Germany, received 100 points for its technical proposal and was ranked first on 7 August. Its members are BH Holding and Kamena Dolina of Sarajevo and Duemo Ltd of Nicosia. The decision identifies MIH Metal Development as the preferred bidder but does not constitute a signed concession agreement. The unsuccessful bidders have 15 days from receiving the decision to appeal to Montenegro’s Concessions Commission. A timely appeal would suspend the next stages of the procedure until the challenge is resolved.
Before an agreement can be signed, the ministry must establish that all members of the preferred consortium continue to meet the statutory eligibility conditions. The existing concession held by Gradir Montenegro expires on 1 January 2027.
MIH was the only bidder to pass the initial compliance review
All three offers were submitted by the 31 July 2026 deadline, but only MIH Metal Development proceeded to technical evaluation. The first rejected proposal was submitted by a consortium led by Turkish construction company IC İçtaş İnşaat Sanayi ve Ticaret, together with Tethys Teknoloji İnovasyon Danışmanlık ve Ticaret and Global Industrial Solutions of Bijelo Polje.
The commission determined that Global Industrial Solutions had not submitted confirmation from the competent local authority showing that its municipal taxes and contributions had been paid. The consortium also failed to provide evidence that the company’s executive or responsible person had no outstanding obligations related to penalties from misdemeanour proceedings. The bid was further rejected because its documents were not bound in the required manner. The tender rules required documents to be secured against the subsequent insertion, removal or replacement of individual pages or sections.
The second unsuccessful bidder was Gradir Montenegro, the existing operator of Šuplja Stijena. Its submission lacked a Ministry of Justice certificate, or an accepted equivalent declaration, confirming that board chairman Andrzej Szary, identified as the company’s legal representative, had no relevant criminal convictions. Gradir’s documentation also failed to meet the prescribed physical binding requirement.
The commission concluded that each deficiency was independently sufficient to disqualify a bid. The missing eligibility documentation could not be submitted after the deadline because the concession rules permit clarification of technical and financial information but do not allow bidders to add documents that were required as part of the original eligibility package. Consequently, MIH Metal Development was not selected after a comparative technical and economic assessment of three valid mine-development proposals. Its 100-point technical score reflects compliance with the published technical criteria, while the rejected bids never reached that stage. The available decision does not establish how MIH’s proposed investment, production plans or concession payments would have compared with those submitted by Gradir or the IC İçtaş-led consortium.
Concession includes four deposits covering 610 hectares
The concession provides for detailed geological exploration and extraction of zinc and lead at Šuplja Stijena, Đurđeve Vode, Paljevine and Ribnik, all within the Ljubišnja mining district in Pljevlja municipality. The concession area covers approximately 610 hectares. Official documentation attributes about 17.14 million tonnes of geological reserves to the four deposits, with Šuplja Stijena and Đurđeve Vode accounting for approximately 15.6 million tonnes.
The disclosed geological inventory is not equivalent to a bankable mining reserve. Additional drilling, geological modelling, geotechnical investigations and metallurgical testing are required, including work at depth beneath Šuplja Stijena and at the less-developed Ribnik deposit. At a notional processing rate of 600,000 tonnes per year, the geological inventory would represent more than 28 years of gross ore supply before accounting for mining losses, dilution, reserve conversion and economic cut-off grades. The eventual mine life will depend on the quantity that can be converted into economically recoverable reserves and processed profitably.
The economic value of the deposits will also depend on zinc and lead grades, as well as recovery rates, strip ratios and concentrate quality. Historical operations demonstrate commercially recoverable mineralisation. Silver associated with lead concentrate could provide by-product revenue, while copper and other elements may occur in parts of the polymetallic system. Their economic contribution would depend on recoveries and payable terms.
Existing mine infrastructure forms part of the operating base
Mining at Šuplja Stijena began in 1954 and continued until 1987, when the original operation closed. During that period, approximately 3.95 million tonnes of ore were processed, with average grades of about 1.72% lead and 4.73% zinc. Historical production included approximately 76,700 tonnes of lead concentrate and 299,900 tonnes of zinc concentrate. A subsequent open-pit campaign between 1996 and 2000 produced another 283,000 tonnes before mining again stopped.
Gradir acquired the insolvent mine in 2006 and restarted production in 2010. Polish zinc producer ZGH Bolesław later took control of the operator. From 2010 through 2024, Gradir extracted approximately 7.25 million tonnes of ore and produced around 171,000 tonnes of selective zinc concentrate, 47,000 tonnes of lead concentrate containing silver, and 36,000 tonnes of combined concentrate. The operation already has a processing plant, roads, electricity connection, tailings facilities and workforce. Those assets could reduce the capital requirements compared with a completely new mine, although their future use would depend on ownership, technical condition and arrangements reached during the transition.
The award of mineral rights does not itself transfer all fixed and movable assets needed to operate the mine. MIH Metal Development and Gradir may therefore have to resolve arrangements covering equipment, inventories, processing facilities, employees, environmental liabilities and site access. Failure to settle those matters before the existing concession expires could affect production continuity even if the new concession agreement is signed before 1 January 2027.
Change of operator adds transition requirements
Gradir’s unsuccessful bid has particular significance because the company is the incumbent operator, with more than 15 years of recent production experience, an established workforce and operational knowledge of the deposits and processing facilities. The incoming concessionaire will need access to operational records, geological databases, mine plans, environmental monitoring data and maintenance information. The completeness and legal ownership of those datasets could influence the preparation of an updated mining plan.
The transition will also involve determining employee arrangements, the applicability of existing labour agreements, and the allocation of health, safety and technical responsibilities.
The consortium is led by MIH GmbH, whose publicly visible core business is fibre-optic infrastructure, including network planning, civil engineering and installation in European markets. The consortium also includes BH Holding, Kamena Dolina and Duemo Ltd. The identity of the technical mine operator has not been disclosed. The consortium’s structure brings together its participating companies, while the specific source of mining and metallurgical expertise remains unspecified. The group is associated with businessman Hajriz Brčvak, who leads MIH GmbH and is also connected with BH Holding.
Environmental obligations will form part of the concession framework
Environmental issues are among the matters that will need to be addressed as the new concession is finalised. In July 2025, authorities temporarily suspended operations following an incident that contaminated the Ćehotina River. Residents of the Šula area have also raised concerns involving water quality, dust, tailings management, landscape damage and the cumulative effects of mining activity.
The concession arrangements will need to distinguish historical liabilities from obligations attributable to the existing operator and future impacts associated with MIH Metal Development. This includes potential responsibility for seepage, contaminated soil, old waste facilities and rehabilitation of previously disturbed areas. Financing major mine investment will also require environmental and social assessment covering tailings-facility stability and capacity, mine-water collection and treatment, stormwater management, acid-rock drainage, dust control and closure provisions.
Water management is particularly relevant given the mine’s proximity to waterways. Zinc and lead mining can generate sulphide-bearing waste requiring controlled drainage after extraction has ended. Financial security for rehabilitation and post-closure treatment will therefore form part of the overall concession framework alongside production and concession payments.
Investment and production commitments remain to be established
The selection decision does not disclose the consortium’s proposed capital expenditure, production schedule, employment commitments, concession payments or environmental investment. Those terms will determine the scale of investment associated with the new concession and whether the transaction involves substantial recapitalisation of the existing operation.
The processing plant has been used since the 2010 restart, while continued operation of an ageing mining district requires investment in equipment, crushing, grinding, flotation, water treatment and tailings capacity. Development of deeper ore can also increase haulage distances, geotechnical requirements and pumping needs. The future operator will need to determine whether to maintain output near historical levels, increase processing throughput or modify the mine plan to focus on higher-margin zones. The consortium’s financing structure has not been disclosed.
Financing conditions for the mine will depend on zinc and lead prices, reserve confidence, concentrate offtake arrangements and environmental risks. The mine has historically exported concentrates for processing abroad, including to Poland. Long-term offtake arrangements could support working-capital and project financing, although the economics would have to account for treatment charges, transport, impurities and payable silver.
Montenegro would receive employment, tax, concession-fee and local-procurement benefits from concentrate production, while most downstream refining value is generated outside the country. A domestic zinc or lead smelter would require substantially larger and more secure feed volumes than Šuplja Stijena alone may provide.
Appeals could suspend the concession procedure
The two unsuccessful bidders can appeal the decision within 15 days of receiving it and can inspect the tender documentation during the same period. A valid appeal would suspend the concession procedure. Gradir has a direct commercial interest in challenging the result because it is the current operator and the concession underpins its existing mining operation and related infrastructure. The ministry’s decision lists separate grounds for rejecting Gradir’s bid, including missing eligibility evidence and failure to comply with the document-binding requirement.
The IC İçtaş-led consortium faces several deficiencies in its submission, while the tender rules prevent bidders from supplementing missing eligibility documentation after the deadline. If no appeal is filed, or if any challenges are rejected, the ministry will proceed with the final eligibility verification and negotiations on a concession agreement with MIH Metal Development. The parties will then have to organise the transition before Gradir’s existing concession expires on 1 January 2027. The tender has established MIH Metal Development as the preferred bidder, while the concession contract, operational transition, treatment of existing assets and liabilities, and financing of future investment remain to be resolved.
