Kosovo's parliament voted late on Friday to put a huge mining complex under government control and save it from bankruptcy, despite objections from Belgrade and protests by local Serbs.

The Trepca lead, zinc and silver mines, which before the armed conflicts that swept through the Balkans in the 1990s accounted for two thirds of Kosovo's gross domestic product, are currently operating at minimum capacity with creditor claims at 1.4 billion euros ($1.57 billion).

 

The complex's ownership structure has been the subject of dispute between Kosovo and Serbia. Belgrade claims 75 percent of Trepca, part of which is on its territory.

 

Trepca straddles Kosovo's Serb-Albanian ethnic divide and, since the territory broke away from Serbia in 1999, the mine has been held in trust and readied for sale by an agency created by the United Nations.

 

However, the Privatisation Agency of Kosovo (KPA) has failed to come up with a plan for the mine's future, partly due to its murky ownership structure.

 

Seventy-nine deputies in Kosovo's 120-seat parliament voted late on Friday to put the mine under government control, adopting a law giving the state an 80 percent stake and miners 20 percent.

 

The new legislation makes the government the guarantor of the company's debt. The complex had been due to face bankruptcy proceedings on Nov 1.

 

"The mineral resources are the property of the Republic of Kosovo and with this law Trepca's assets are and will remain in Kosovo," Prime Minister Isa Mustafa told parliament.

 

Serb lawmakers boycotted the vote while local media said hundreds of protesters, together with Serb ministers, blocked a road for few hours in the Serb-dominated part of northern Kosovo, where the complex is located.

 

Once a mainstay of industrial production in the former Yugoslavia, Trepca employed 20,000 people at its height and accounted for most of the country's mineral wealth.

 

Serbia considers the complex as belonging to a list of "socially-owned enterprises" and would view its appropriation by the new Balkan state as theft.

 

Kosovo says Serbia lost rights to state-controlled enterprises on Kosovar territory when forces under late Serbian strongman Slobodan Milosevic massacred and expelled ethnic Albanians from Kosovo in a 1998-99 counter-insurgency campaign.

 

Kosovo declared independence in 2008.

 

In Belgrade, the Serbian government office in charge of negotiations with Kosovo called a news conference for 0900 GMT on Saturday in response to the new legislation.

 

($1 = 0.8929 euros)