The closure of the New Zenica Steelworks, located in Bosnia and Herzegovina’s confederal entity Republika Srpska, is threatening the existence of the Railways of Republika Srpska. An earlier closure of a coke plant is sending ripple effects through various companies in the supply chain and has now reached the railway company.
The New Zenica steel plant is a vital customer of the Railways of Republika Srpska (RRS). Freight transport for the plant accounts for about 60% of RRS’ freight revenue. Dragan Zelenković, Acting General Director of the Railways of Republika Srpska, has said that the loss of these volumes would be “catastrophic” for the company and put the livelihoods of 1,700 people at risk.
The challenge started in November 2025, when the Lukavac coke plant went bankrupt. It stopped production on 23 February. Not long after Lukavac’s bankruptcy, the Zenica steel plant also failed to fulfill its financial obligations and, likewise, went bankrupt.
Now, iron ore mine operator Nova Ljubija is reportedly preparing to file for bankruptcy as well. It informed RRS that iron ore transport on the Omarska-Zenica route would be suspended as of 2 March.
No other options
The business collapses have plunged RRS into nothing short of a disaster. “Do we have an alternative? We do not. Traditional goods and other cargo that should be transported by rail are being transported by road”, commented Zelenković.
“We are more affordable and more acceptable both environmentally and financially, but difficult times and certain poor legislative decisions have, unfortunately, worked against the railway sector in Bosnia and Herzegovina for decades.”
RRS transported around 1.4 million tonnes of iron ore, scrap iron, and other raw materials for the New Zenica Steelworks annually.
60% revenue
“On an annual basis, the Railways of Republika Srpska generated approximately 19 million BAM (9.7 million euros) in revenue from this transport. 60% of our total freight revenue came from transport services for the New Zenica Steelworks”, continued Zelenković.
“The Railways of Republika Srpska, like the Railways of the Federation of Bosnia and Herzegovina, are of essential importance in both entities for the economy and industry, regardless of its size and level of development. They not only provide freight transport services but are also a key factor in maintaining economic stability. At a time when we are facing numerous market challenges and economic turbulence, any additional crisis could have a negative domino effect. The shutdown of the New Steelworks would result in the loss of a significant number of jobs, further burdening the economy and increasing unemployment.”
The shutdown of the steel plant and railway companies are not an option, added Zelenković. “We want to survive. Do not take away our jobs.”