Kosovo has built a stable macroeconomic environment through trade liberalization agreement with the EU and the rest of the Balkans region. Kosovo's modern legal and institutional frameworks are already in place for a sustainable and competitive market economy compatible with EU standards. Kosovo enjoys non-reciprocal, customs-free access to the vast EU market.

Under the new Kosovo Mines and Minerals Regulations of January, 2005, royalty on a ton tone of marble, granite or slate extracted is 50 cents to December 3s, 2006. Investors can receive and retain abroad proceeds from export sales.

The traditional and future world demand for the types of decorative and dimension stone resources which Kosovo can supply should cause the Kosovo authorities to prohibit any further blasting and crushing of its dimension stone resources because the prices offered by the world market for blocks are much higher than the prices offered in Kosovo for crushed aggregate. For example, the Gadimiia e Poshtem marble breccia quarries located in Lipjan municipality have vast reserves of marble breccia traditionally provided from Italy throughout Europe for use in antique buildings.

No similar material at present is available to the world market because similar mines in Italy are exhausted. The aggregate produced from these, and similar quarries in Kosovo, sells at an average of 12 euros per m3, compared to the European market value ranges from 400 to 800 euros per m3 of cut blocks.

The technical management and equipment observed of the only imported block cutting operation in Kosovo is considered small compared to those in Italy. The company's limited financial resources and technical expertise prevent it from proceeding to a stage of setting up a quarry to extract marble blocks and to expand their processing capabilities to cut and polish them.

The technical management of the operations observed in Kosovo for cutting, polishing and finishing is average to that throughout Europe. Except for a small quantity of granite slabs obtained from the local company referred to above, all slabs of marble and other dimension stones are imported. The international market demand for stone tiles in standard sizes provides an excellent opportunity for local processors to manufacture these products from local stone, rather than from imported slabs at much higher costs.

Task findings and recommendations

This was the consultants first visit to Kosovo. Within the fist day of filed observations, the consultant was very pleasantly astonished that he could inspect Kosovo's different types and vast quantities of unexploited decorative stone resources within very short driving distances.

Information has been provided for 24 sites in Kosovo as an example of the vast supply and variety of unexploited dimension stones available to investors. This information is based on site surveys by the consultant and KCBS project team staff of Chemonics International Inc. The European Union Independent Commission for Mines and Minerals in Kosovo provided available resources volumes.

The types of decorative and dimension stones which occur in Kosovo, and especially the marbles, are of particular interest immediately to foreign investors for their color, attractiveness, and the variety of combinations of colors and patterns available within very close proximity to one another in a very compact area of approximately 10,000 m2. This feature alone provides investors with very cost effective quarry development opportunities. In addition, Kosovo enjoys the competitive advantage of being close to all of Europe, with low transport, energy, and labor costs.

Some abandoned quarries which provides cut blocks and existing ones with blasting and crushing operations, especially those with vast marble reserves, provide investors immediate opportunities to easily and quickly develop dimension stone quarry production. It is recommended that:

The abandoned breccia marble quarry in Decani is given a high priority for investment interest, because it can begin operations within 3 months of approval to easily remove approximately 400 m3 of rough face, an then commence with dimensional block cutting with an approximate investment of 1-1.5 million Euros.

Other abandoned quarry operations should be prospected as soon as possible to determine the optimum location for establishing new quarries for block cutting, especially the abandoned onyx marble quarry at Baja e Pejes in Istog municipality.

Blasting and crushing aggregate operations currently underway in marble and other higher value dimension stone reserves should not be permitted by the Kosovo authorities. Rather, these reserves should also be prospected as soon as possible to locate the optimum locations for development of quarries for block cutting.

The publication was produced by the

United States Agency for International Development.

It was prepared by Chemonics International Inc. Based on a final report prepared by Paolo Giovannangeli, working under a Chemonics' subcontract with Paradiso Mermer Granit of Pristina, Kosovo.