MINISTER BRIEFS AMBASSADOR ON DISPUTED GUARANTEE FOR IRONWORKS

ZAGREB, Feb 28 (Hina) - Croatia's Economy Minister Ljubo Jurcic met with Russian Ambassador Eduard Leonidovich Kuzmin on Friday, informing him about the ministry's position regarding developments in the purchase of the ironworks in Sisak and the contentious parts of Russian company Mechel's purchase guarantee. #L# Jurcic reiterated the Croatian government wished for the sale to go through, i.e. for Mechel to alter the text of the bank guarantee so that production in the bankrupt ironworks might start. The minister said the document stated the guarantee would become invalid if the sales contract was terminated in part or completely. The economy ministry and the government seek guarantees for damages in case of contract termination. Jurcic further said that Mechel's company Conares Balkan had not yet signed a contract for the purchase of spare parts and raw materials that are required to start production and that as a result, the payment of January salaries was late. For the sales contract to become effective, the Croatian government has been asked to lift mortgage on certain plants in the Sisak ironworks, which is why the mortgage funds cannot be used to pay out the January salaries, the Economy Ministry said earlier today. Also today, ironworks director Nasibulli Mukhtadinov announced steel production should start this evening after a ten-month stalemate. Given the guarantee problems, unofficial sources have said, Mechel "legally is not in the ironworks" and, therefore, cannot start production. Officials in charge of the plant's bankruptcy are said to have informed the Russian company that the sales contract will not go into force tomorrow and that production will not begin because the government's conditions have not been met. (hina) ha