Reuters reported that Serbia's sole steel mill, bought back by the government from US Steel, is to shut down its only operating blast furnace and idle most of its workforce due to a shortage of raw materials caused by the cold snap enveloping Europe.

The underperforming steel plant in the central Serbian city of Smederevo idled its other iron making blast furnace in late 2011 to cut costs, before US Steel cut its losses and sold the operation back to the Serbian government for USD 1.

Mr Vukoica Scekic, the acting CEO of the Smederevo Steel Mill, said that "The raw materials such as coke and iron ore that we have ordered are either in river ports that are frozen solid or are stuck somewhere downstream on the Danube and will not arrive soon."

He said most of the 5,500 strong workforce would be put on leave on 60% pay.

Much of Serbia has been brought to a standstill by subzero temperatures and heavy snow in the blast of Siberian air that has swept westwards through Europe.

Its budget under strain, the government says it hopes to quickly re sell the loss making steel plant, but Mr Scekic the weather was not helping. He said that "This weather could not have come at a worse time as we had planned to boost production while the government is seeking a strategic partner."

(Sourced from www.reuters.com)