Essay on the Extractive Industries in Albania

Essay on the Extractive Industries in Albania

Rakip Belishaku – Faculty of Geology and Mining

Is extractive industry “Gordian knot” of the Albanian economy?

In the past 25 years the Albanian economy has been more a function of inertia than a concrete plan of its development on a scientific basis. I mean, all these years we did not have a clear strategy of sustainable economic development. A strategy that will resist the temptation of every government to undo everything and get started from begining. Emphasis is put on agriculture, tourism and sometimes to the building and apparel industry and less on the most potential sector of Albania’s extractive industries.  Albania is blessed with many natural resources ranging from oil, gas, coal, chromium, copper and iron-nickel. However, these are just the top of the iceberg of the Albanian underground. Explained in other terms these liquid and solid minerals are those which are used these 25 years and which have been attractive to investors because they have low cost of extraction using infrastructure inherited and getting fat profits from their high value on world markets.

However the bulk of the minerals are “asleep” waiting for the reorganization and rebuilding of the extractive industry based on pure scientific projects and wise investment. We have large reserves of coal in Memaliaj, Vërdovë-Dardhas Priskë-Mushqeta, Babien-Krosnisht-Qenskë, Mborje-Drenovë, which now are abandoned mines.

If there are built thermal power plants that use coal as fuel, advantages of coal extraction would be considerable and maybe bringing reduced price of electricity. I want to mention for the sceptics that Australia produces the larger share of electricity from coal. And if after studies it results efficient in terms of energy and environmental, government can give permission of a particular type. Namely if a company is interested in building a coal-fired power plant should not import it, but use domestic coal. This would result in the opening of employment opportunities in areas where there are mines and increase in state tax contributions.

Also of economic interest is to put into industrial use all deposits of limestone, marble, stone salt, olivinites, gypsum, volcanic glass. Although with the potential to supply the markets of Europe, currently Albania imports each year thousands of tons of processed products clay and gypsum. There are needed investments in their careers for the extraction, but also factories for the processing that will multiply the value of the product. Selenica Bitumen and sands found in different deposits could shine as export product to European markets. Just to remember in early 20th century Vienna and Paris streets were paved with Selenica bitumen.

To turn again to the most important mineral products now days, petroleum, chromium and copper. Apart to frequent price variations in world markets, companies that deal with their use are a success story in terms of profit and growth rates of annual production. Certainly that is not a sector without problems, as requires enormous investment to keep in the pace of development, and  above all to have a sustainable development,  which is of interest for everyone, the people of community as owners, the state as supervisor and controller of the companies and investors, that seek for continues investments for maintaining the reputation. We need a greater role of the state as a regulator and as a partner in the development of natural resources and the extractive industries as the main potential for economic development and improvement of the life standard for the citizens.