Dimitar Tsotsorkov: Capital goes where investment conditions exist

As Chairman of the Board of Directors of Assarel-Medet, how much are you involved in the company’s management and what are your responsibilities in the company?

I work together with Assarel-Medet’s CEO Delcho Nikolov. We have operational briefings every week, where we discuss our most important current projects. At the moment, this is the modernization of the enrichment plant, in which we are investing BGN 150 million of our own resources just for this year. The technological scheme for ore processing remains the same, but the capacity of the ore processing plant is increased from 13 million tonnes to 15 million tonnes per year in order to reduce our costs of production and increase our production of metal.

How is the company developing after the prof. Lachezar Tsotsorkov has passed away?

The shock was just over two years ago, this is no short time. The management model and strategy of the company are very long-term, they have been developed with the help of leading global consultants, thus they will be maintained not only in terms of technological modernization and investments, but also in terms of engagement with the local community. There were, of course, lots of worries, but I think we proved ourselves and coped with this transition period. I’ve been in the company for 20 years, the CEO Delcho Nikolov has been around for even longer – 40 years. We have a vision, we have good partners and a good team, and I would say that the company is stable.

What was the purpose of the Assarel-Medet stock buyback announced several months ago?

 It is a worldwide practice when companies have cash, this cash is to be used. Our company had generated a lot of spare resources and it didn’t make sense to put that money in deposits, which currently have a 0% or even negative interest rate.

You said you had spare resource. Have you considered investing abroad?

We are indeed exploring opportunities in several places abroad, we have ideas for expansion outside of the country. We are targeting places where we can manage the geopolitical and geological risk. Africa, for example, is not an option for us, even though it seemingly offers attractive options. We are more interested in North America – Canada, and Europe. By the way, 10 years ago we developed a strategy at Assarel Investment, based on a study of basically the whole world. For example, we have excluded countries such as Greece, Macedonia, Romania and Turkey.

At what stage are the projects of Assarel Investment and its subsidiaries?

We have 10 projects that are outside Assarel-Medet. They are in clusters. One is near Burgas, the other is in the Western Rhodopes, and the third is Tran – Breznik. We also have a joint venture for geological exploration in the area of ​​Panagyurishte with the largest copper company in the world – Freeport-McMoRan, with them leading with 51%. So, in general, we have a lot of projects. The most advanced is Breznik, where we are currently researching the final selection of enrichment technology. We’ll start production there in two or three years.

The other projects are in different phases, but not as advanced. We have obtained rights, in some cases for exploration, in others – concession rights, in third – we are in the middle stage – commercial discovery. No one can tell when they will start, but the good thing is that we are already in negotiation with two mining companies that are interested in partnering with us in some of these projects.

How do you see the future of the mining industry, given the opposition to extraction from different groups?

In my opinion, the future of the mining business has not changed. If there are professionals who think in the long-term and who have the resources, the opportunities, and especially the people, then there are good examples of the development of the mining business in Bulgaria, such as ours in Breznik. The so-called opposition are people who have very strongly defined personal interests and use the advancement of digital technologies to literally flood the media with fake problems. And because people are not necessarily educated in a topic like the mining industry, they just trust them and get scared. The bad thing is that society does not ask those who tell lies about the mining industry to support their claims with evidence.

Do you not think that the lack of trust is due to the fact that the Bulgarian institutions, which are responsible for the control, are seen by the citizens as corrupt, ineffective and non-transparent?

Bulgarian citizens have chosen their government themselves, so it is not the responsibility of business to comment on this. As I said, if we see geological potential in a project, I do not see a reason for us as a company to not develop it. People’s distrust in government institutions is no excuse for companies like ours to do their job. In addition, people may not necessarily be educated in the mining business, but they are not stupid. Sooner or later, they understand who pays real salaries and who the one who helps is, they see the positive examples, and they see who is lying to them. I am an optimist.

Where do you see the solution in a situation like the one in Tran?

I see the solution firstly in the court ruling that this is an illegal referendum. Then I see it in an information campaign among the people so that they can make an informed decision. But this issue is not on our agenda. We cannot invest by force. Capital goes where conditions for investment exist, where it is welcome. We are developing a portfolio of projects from which we will choose where to invest. That’s why Breznik has managed to start. And the people of Tran are already beginning to wonder why there is no unemployment in Breznik, why incomes are increasing. People sooner or later understand the truth.

Is this the hardest thing about running a company in this sector? To convince people that they will benefit from such a project?

In places where there are active mining projects, people do not need to be persuaded because they can see it with their own eyes. Wherever we work, mainly in Panagyurishte so far, the city is flourishing. Wherever a new mining project starts, people who have been acting locally for years usually see us as a threat. In Tran, for instance – if a mining project starts, where the average salary is BGN 2,000, there is no way anyone would agree to work for BGN 200.

What are the new technologies in your sector, what ongoing changes exist?

We are, for example, currently working on upgrading our existing ERP system, which, thanks to thousands and thousands of sensors, allows us to gather a huge flow of information which can then be literally traced via the manager’s phone. The system shows, for instance, micro-cracks in the machine, long before it breaks, so that it can be replaced just in time. It also measures production in real time – what goes in and out of the factory, etc. The system implementation will be completed by the end of next year, and then we will have improved efficiency and safety as well. On a global level, drones, robots, including heavy mining trucks that are fully automated, are entering the mining business. There is a great potential for robotics in the mining sector, but we are in no hurry with these projects as we have a conscious social function. For now, we only focus on where new technologies can help to avoid human mistakes.

There is already a clear policy direction in favor of circular economy in the EU. To what extent will it enter Bulgaria, when, and what business opportunities does it create?

Modern trends in the economy and innovations usually require a developed ecosystem, stability of the environment and huge investments. In Bulgaria, this is observed in some sectors, such as IT, outsourcing and payment services, as well as in some industries supporting the automotive industry. But in order to enter Bulgaria on a larger scale, a stable state policy and huge investments are needed. This again depends on things that are out of our control. We need to dethrone a myth here – that in Bulgaria we produce the raw material, and the Western countries add value and make huge profits. This is not true, because at Assarel Investment we carried out a study, for example, on the production of copper cathode cables. The margins there are 4-5%, provided you have to maintain 2,000 items, have a huge marketing department, and the competition is fierce.

In terms of the circular economy, we have a lot of mining waste, with a lot of metals in it. We have a corporate policy to keep up with the latest developments in the mining industry, we have set aside investments for innovations, but there is simply no technology developed yet to utilize these metals. Such innovations require huge investments in R&D that only multibillion-dollar companies can afford. In Bulgaria, the economy simply does not have that depth. We know our position, we are not a company that can set aside such a resource. But we would buy the technology if it were to be developed somewhere in the world.


What type of manager are you – one who assigns tasks or who is in control of everything?

It depends on the project and the task. If I can make a comparison to the management style of Prof. Tsotsorkov, I am less controlling. I tend to delegate more, I give more freedom to associates.

Which is the most difficult management decision you have made?

One of the decisions, which was very difficult, was to determine how many days I would spend in Panagyurishte and which are the top things I will take care of there. At one point, it turned out that there cannot be two CEOs in the same mine, because this creates confusion. Our current CEO – Delcho Nikolov, has proven himself over the years, we work very well together. I spend one day a week in Panagyurishte.

Do you manage to find a work-life balance?

I try to be close to the balance, although it depends a lot on the dynamics of the tasks, the problems, the holidays of my children, for example. Personal life also includes maintaining good health, as well as sports. I do swimming, trekking in the mountains, some fitness, all sorts of things.

What other hobbies do you have?

Travelling, other cultures, other places. I have an ambition to go to the North and the South Pole, but it takes time.

Favorite author?

I am currently reading Sapiens. A Brief History of Humakind by Yuval Noah Harari. I really like The Road Less Traveled by M. Scott Peck, who describes the psychology of a successful person.

Favorite quote?

I would quote Prof. Tsotsorkov in relation to the rumors that barriers exist for our mining projects. He used to say: “There are two types of managers – the ones who do their job and the ones who don’t do their job. Those who don’t, find an excuse.”

Source: Capital Weekly, August 31, 2019 / Interview by Ognyan Georgiev and Iglika Filipova


Dimitar Tsotsorkov is the Chairman of the Supervisory Board of Assarel-Medet and the Executive Director of the investment subsidiary Assarel Investment. He holds bachelor’s degrees in Economics and Finance, as well as in Computer Science from Richmond University (American University in London). He holds a master’s degree in Information Management and Finance from Westminster University in London. He has worked as a sales and marketing agent in London Electricity, as well as a shipping manager in Glencore UK. He has been with Assarel-Medet since 2001 as a sales and hedging expert, subsequently becoming head and director of the Corporate Development department. He is a member of the Management Board of Assarel-Medet since 2014, and from 2015 to 2017 he was Chairman of the Board.

The company

Assarel-Medet is a copper ore extraction company, exploiting the ore deposit near Panagyurishte. Once a state-owned enterprise, it was privatized in 1999 – the first privatization in the Bulgarian mining sector. Currently, the major shareholder is VA Copper Invest Malta, and most of the remaining shares are held by Bulgarian individuals, including the heirs of the late Lachezar Tsotsorkov. Assarel-Medet is ranked 61st in the K100 ranking of the largest Bulgarian companies, with total revenue of BGN 396.5 million for 2018. Profits for the same period are BGN 88.8 million, meaning that the company reports more than 22% profitability. It employs 1,200 people, and another 400 are employed in subsidiaries.