|NOT ALL THAT GITTERS IS GOLD FOR ROSIA MONTANA INVESTORS
Source: The Diplomat
Despite President Traian Basescu’s support for the controversial Rosia Montana mining project, Rosia Montana Gold Corporation still has to clear further hurdles from the cultural and environment ministries, as The Diplomat Bucharest learned. By Dana Verdes
The Rosia Montana project seems to have become a never-ending saga. While the disputed mining scheme has earned the expressed support of President Traian Basescu, the tortuous story seems no closer to reaching a conclusion.
A mountain to climb
Kelemen Hunor, culture minister, told The Diplomat Bucharest in an interview that for the project to get the OK, Carnic Mountain has to be stripped of the protected status it enjoys under Romanian law.
“When we saw the commission’s position when we received the Rosia Montana file last year we realized in what direction the whole story was going. Most likely they will agree with the downgrading. Then I tried to establish a format and some guarantees for any eventuality. When the operations begin, if the project starts, I will have the certainty that I have the necessary funds from the investors to protect the cultural heritage of Rosia Montana,” says Hunor.
Environment Ministry lays down the law
Ministry of Environment officials told The Diplomat Bucharest that they will recommend the government approves the Rosia Montana project only if the investor follows best practices in the mining sector.
RMGC gives guarded response
Rosia Montana Gold Corporation officials refused to respond to The Diplomat Bucharest‘s questions. However the company has made several short statements in the international media. It has protested that reducing the level of cyanide in mining lake, as requested by the Romanian Government, would cost the company “tens of millions of dollars,” said Horea Avram, VP for environment at RMGC, in an interview with Agence France-Presse.
Rosia Montana: the story so far
Gold and silver exploitation at Rosia Montana would be carried out by the Rosia Montana Gold Corporation (RMGC) company, controlled by Canadian firm Gabriel Resources, which currently owns 80.46 percent of the share capital. The Romanian State, through Minvest Deva, has a 19.31 percent stake in RMGC. Among the names linked with the Canadian company are billionaire businessmen such as John Paulson, Beny Steinmetz and Thomas Kaplan. Gabriel Resources was founded in 1997 by controversial Romanian businessman Frank Timis, who retired from the company in 2003 to focus on other businesses. In 1997 Minvest had a 33.8 percent stake, and Gabriel Resources, which at that time was named Euro Gold Resources, 65 percent. The Romanian State issued the exploitation license for gold and silver at Rosia Montana in June 1999 approved through Government decision 459/1999. One year later, the State transferred the license from state-owned company Minvest Deva to private firm RMGC. But the RMGC has not managed to convince the Romanian State and the different ministries over the years, and has still not received the necessary permits for the exploitation. Another hurdle the RMGC has had to face is the public’s opposition, as cyanide will be used in the process. The Rosia Montana deposit is evaluated at approximately 300 tons of gold and 1,600 tons of silver.