Hedge funds slash bullish wagers on gold before war jitters
Speculators have reduced net-long positions by 3.6%.
Romanian Prime Minister Victor Ponta dealt a major blow to Canada’s Gabriel Resources (TSE:GBU) on Monday after urging Parliament to reject draft legislation in support of the Rosia Montana gold mine project – the same legislation Ponta’s ruling party approved just two weeks ago.
Gabriel dropped 53% on the Toronto exchange, trading at $0.71.
The declaration comes after a week of massive anti-mine protests; thousands of Romanians have been rallying on the streets calling on the government to reject the mine.
“There’s no point in wasting time, I want to make sure that the Senate and the Chamber of Deputies vote on the rejection and then this project is closed,” Ponta said, as reported by Bloomberg. “I don’t want the government to be responsible for contracts undertaken by previous cabinets.”
Today’s announcement indicates that the protests may have had a major effect on Ponta who just two weeks ago pushed forward the draft legislation, calling the project- which would be Europe’s largest gold mine – of “overriding national public interest.” Before taking power in May 2012, Ponta said he opposed the mine.
Now, the ruling party admits that they may have opened the door to a lawsuit from Gabriel. The company noted in a statement that if Parliament rejects legislation, the firm would consider suing Romania for “multiple breaches of international investment treaties.”
In Monday’s press release the miner also called on the Romanian government to clarify today’s statements and urged investors to use “caution in the trading of its shares.”
Last week the firm lost more than 13% as investors watched the protests gain momentum. Meanwhile, Gabriel notes that recent polls indicate “majority of support for progression of the Project across Romania.”
Romanians are concerned about plans to use cyanide as part of the gold extraction process and other environmental issues including shaving off portions of mountain peaks.
While the mine would create 900 jobs during operations, Ponta said he would find other ways to drop unemployment figures in the region, the Associated Press reports.
Parliament is expected to vote this month but no date has been set yet.
Image from Wikimedia Commons
15 Comments
Tom Henricksen
Rosia Montana will be a great mine for Romania. None of the protestors make any sense at all with respect to the potential environmental damage. The rules put forth by the banks who will fund this mining activity require that the strictest environmental standards be kept.
ambra blu
tom henricksen, as a romanian i want to assure you we will oppose this law until we kick rmgc out of romania. happy now? united we save rosia montana! this is romania, not a third world country!
Gordon
Why is it that while environmentally responsible mining can take place in European countries such as Sweden, Finland, Norway, Spain, Portugal, Ireland and Poland – it can’t in Romania using the modern technologies to be employed at the mine? Obviously the full time, non-seasonal jobs and taxes are needed both locally and nationally. Instead of simply being opposed to one mine or another, responsible NGO’s could work together with the government and mining companies to lessen the impact of mining and increase the local and national benefits of the mining. Otherwise, it’s simply to buy the metals from somewhere else where you don’t have any control.
Cris.G
Cyanide used at Rosia Montana will be 13x time higher then in the rest of the Europe used. This is bad, we dont want cyanide in our country. We had one tragedie already in 2000 and they also told us that cyanide extraction is safe, well it’s not and we dont want that to happen again in Romania.
ambra blu
RMGC the mining company has invested 5 million euro in online advertising alone. despite this, despite the bribes, despite the total media boycott, people have still taken to the streets by tens of thousands. now, my well meaning international readers, now this is democracy. romania is not africa, romania is a democracy.
roisa montana is ours. we have the largest gold deposit in central eastern europe and we won’t let some greedy thieves control it.
ambra blu
what cyanide mining entails and its disastruous consequences:
a program on romanian national tv :
http://www.tvrplus.ro/editie-biziday-130060
smallbeans
ambra blu. You represent everything that is wrong with the anti-mining lobby.
You are clearly seriously missed-informed about the risks and benefits of
modern mining. Mining takes place in many countries far more developed by any
measure than Romania because the people of those countries know the benefits that mining can bring.
For example in Sweden part of the historic town of Kiruna is about to be moved 3km due to the impact of mining. See
http://www.mining.com/mining-forces-entire-swedish-city-to-move-3-km-60895/
But is this international news? No, because the people of Sweden know the benefits that mining brings to them and accept the associated risks.
Just because you‘re loud and can spell four letter words does not mean that you either represent the majority of Romains or know what’s best for your country and people.
ambra blu
bla bla bla. romania will get 6% of the gold. our gold. no percentage out of silver & rare metals. besides, rosia montana area is where romania’s oldest village, alburnus maior, is. our history, then.
whyncha go and start mining with cyanide or sulphuric acid in those developed countries such as sweden, africa, australia, peru, the list continues? we romanians are too smart and too strong for shits like rmgc. our protests have for now stopped the project. this is how powerful we the people are.
what part of my country, my gold you fail to understand, foreigner?
ambra blu
rmgc should go ahead and sue us all they can. there’s always an ”odious debt” law one can resort to.
apple
Thank You Ambra Blu
I am sure you are a fine representative of your country and its attitude to foreign
investment. You have convinced me to never invest in Romania or any company
working there.
apple
I am curious to the future of the Rosia Montana mine after deveolpment is denied. Will Gabriel be compensated for investement to date and loss of future earnings. Will the Romanian government turn the area into a park or sell the mine to some other investor.
ambra blu
they will most likely want to sell to another investor, but we wont let it happen. in a matter of years, rosia montana will be part of unesco world heritage. rgmc will not be compensated, as long as there is such a thing as ”odious debt”. thanks.
Ciprian
http://en.wikipedia.org/wiki/Exploitation_of_natural_resources
Ciprian
http://www.youtube.com/watch?v=1oDoO5QpLv0&feature=youtu.be
Daniel
The threat by RMGC’s CEO J. Henry was absolutely preposterous.
From The Globe and Mail: “If the lower house [of parliament] does reject the project, we will go ahead with formal notification to commence litigation for multiple breaches of international investment treaties for up to $4-billion,” Mr. Henry said in a phone interview. “Our case is very strong and we will make it very public that Romania’s effort to attract foreign investment will suffer greatly.”
Never heard a private company’s CEO putting pressure on a sovereign country’s Parliament to vote a certain law in their favor in this way before.
If they invested money in a project that was not able to meet the legal requirements over 14 years, that’s their problem. You can’t expect laws to be drafted to suit you. If they did, it’s their loss.