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Romania is one step closer to becoming the co-owner of Europe’s largest open-pit gold mine. On Wednesday the ruling Social Democratic Party approved draft legislation allowing Canadian miner Gabriel Resources to proceed with its Rosia Montana proposal, which has been under debate for 14 years.
Declaring the project of “overriding national public interest,” Prime Minister Victor Ponta pushed forward legislation on which parliament will officially vote in September.
The Rosia Montana site – originally created during the communist era – is run by the local Rosia Montana Gold Corporation (RMGC). Gabriel owns majority shares of RMGC and the Romanian government 20%. Under the draft law, the state will own 25% once construction begins.
Communist-era abandoned crusher at Rosia Montana | Gabriel Resources
The draft bill also requires Gabriel to pay royalty taxes of 6% – 2% more than other mineral resource projects.
Gabriel has been negotiating with the government over royalties, ownership rates, environmental and cultural concerns for more than a decade now. In a statement on Wednesday the company’s CEO said he was “extremely encouraged” by recent developments.
Pending parliamentary approval, Gabriel anticipates first gold production in November 2016.
But not everyone is applauding the government’s move. Some locals strongly oppose the Canadian miner’s plans to use cyanide as part of the extraction process and cut into mountain peaks.
In response Gabriel has promised to “ensure environmental protection and eliminate historical pollution” while adding 2,300 jobs during construction phases and 900 for operations. Unemployment in the Rosia Montana area reached 80% after a state-owned miner, Minvest, ceased all operations in the Rosia Montana concession zone in 2006.
Gabriel also estimates the project will bring more than $24 billion to the country through direct and indirect GDP contributions.
Rosia Montana, located in western Transylvania, has estimated reserves of more than 10 million ounces of gold and 47 million ounces of silver.
Gabriel’s stock price has proven highly sensitive to the company’s political dealings which have often been confusing and controversial. On Wednesday the miner gained more than 5%, trading at $1.84 but by mid-afternoon simmered down to $1.76. Wednesday’s peak was the firm’s highest share price since May.
Images from Gabriel Resources
7 Comments
Nutu G.
Prepare to pour your money into Romania, guys!
city puzzle
i hope you all know that, in fact, Romanians are against this …
” the co-owner ” ? hahahahahahahahaha ! Co-owner is when you have or gain something ….
Just
@not_you What do you know about this project? What do you know about Romnia?
John
This is a high risk project and investment. There are many problems with the exploitation at Rosia Montana. Rosia Montana Gold Corporation and the Romanian state will have to break several laws in order to pursue this project.
The company will illegally expropriate the people living in the area and thus violating European principles and the Romanian citizen’s rights.
The European Court of Human Rights will oppose such violations of human rights.
Moreover, Romania is still subject to a Mechanism for Cooperation and Verification by the European Union which will not allow such flagrant violation of citizens’ rights.
Sandra
The a state-owned miner, Minvest was brought into solvency by the state, all with the bribe received from Gold Corporation, so that they can offer them exclusivity. The tender bid was a private one, which allowed only Gold Corp to take part- is that democracy, I guess not 🙁
Sandra
Romania – a sold country to the Canadian corporation owned by Kaplan
Voichi
In my opinion the Romanian state, in its desire, do nothing else but
respect and implement the development strategy of Europe. Over time EU
has become a convention strictly defined and imposed by regulation or
legislation, followed by a compliance with the rules of all
participants. In other words, it was transformed into a system of
propaganda programs and educational issues which require citizens to
join the EU and its vision in an attempt to convince everyone that their
lives will be much fairer and better. So Rosia Montana Gold
Corporation, aided by megalomaniac romanian political system and the EU’s vision,
has found the weakness and entered into the system. These points to the
real problem, allowed by the main actors of the game, which occurs when
the expropriation becomes the exception that reinforces the rule
because then not only the integrity of private property is attacked, but
also the rule of law. Becoming an exception, it creates precedent. If
it is such a precedent, will create chaos. Maybe a dystopia.