Sun, Jun 03, 2012 page11

• Mining town in Romania suffers from gold riches

  • By Luiza Ilie / Reuters, ROSIA MONTANA, ROMANIA
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  Rosia Montana Town, made up of 16 villages that dot the slopes along the river Rosia in western Romania, has hundred-year-old churches and houses, cemeteries and ancient Roman mine galleries.

  It also has gold, but for those who live here, that is more of a bane than anything else.

  Canada’s Gabriel Resources wants to build Europe’s largest open cast gold mine in Rosia Montana, a 15-year quest that has put the area at the center of a national debate between heritage and development.

  The mine could bring billions of euros in taxes and potentially thousands of jobs to an economically depressed region, but it will also require blasting four mountain tops, relocating the community and flooding one village to create a 300 hectare pond for chemical waste held back by a 180m high dam.

  The mine has the support of most of the 2,800 locals, the mayor and county administration and Romanian President Traian Basescu.

  Those who oppose the project — a handful of residents, several church, environmental and human rights groups, the Soros Foundation and Hungary, which fears the consequences of any environmental damage — want to turn the area into a UNESCO heritage site focused on tourism and farming.

  Critics are concerned that concession rights were awarded without transparency and without exploring other options.

  Romanian Prime Minister Victor Ponta, a political opponent of Basescu, has openly criticized both the plan and the president’s support, and the topic will be a focus of debate in the run-up to a November parliamentary election.

  The issue also cuts to the heart of Romania’s economic problems, as the EU’s second-poorest nation struggles to take advantage of its resources and strategic location between western Europe and the Middle East.

  “Basically it’s a choice between two world views set around the question of how we see Rosia Montana and Romania’s future in five, 50 or 500 years,” said Magor Csibi, country manager at the Romanian arm of environmental group WWF.

  “It’s a war of nerves,” Csibi said. “Whoever lasts longest wins.”

  Countless court cases challenging the permits are pending, as are many appeals by the company.

  Stuck in the middle, with no other source of employment, the community is slowly dying out. The villages lack central heating or running water and infrastructure is decaying, while previous mines have polluted the water.

  Most locals hope Gabriel Resources’ Romanian unit, Rosia Montana Gold Corp (RMGC), will restore jobs and the economy.

  The town is in the Golden Quadrilateral, an area of about 900 square kilometers which holds one of Europe’s largest gold reserves and is also rich in copper and silver.

  However, after the 1989 collapse of communism, Romania was left with an inefficient, heavily subsidized mining sector that employed hundreds of thousands and scarred the environment. It closed hundreds of mines and sacked workers. The government estimates it still needs 1 billion euros (US$1.2 billion) for ecological repairs.

  Many people left Rosia Montana. Others sold their properties to RMGC and moved to modern houses the firm built in the town of Alba Iulia, 80km away.

  Eugen David, a former copper miner who moved to Rosia Montana about 17 years ago when he met his wife owns land on top of one of RMGC’s planned quarries and where it aims to build a processing plant, and says he will give it up only by force.

  As the head of an anti-mine organization his alternative to the mine is farming and using Rosia Montana’s notoriety to attract tourists.

  However, the area is difficult to get to and has little tourism infrastructure in spite of its natural beauty and mining heritage.

  “If it goes forward it will destroy this community. There will be no more mountains. The company will relocate 1,000 families. How is that good for the community?” David asked.

  RMGC, in which the Romanian state holds a 19 percent stake, started exploration work in Rosia Montana in 1997 and secured concession rights two years later. Opponents are angry that parts of the agreement are confidential under the country’s natural resources legislation.

  RMGC estimates the mine to be worth US$7.5 billion and that the state would get more than half of that in royalties, taxes, dividends and indirect services, based on a 2007 study that used an average price of US$900 per ounce of gold. The Romanian Ministry of Economy, Commerce and Business Environment approved the study without conducting an independent survey.

  Gabriel’s chief executive said the mine could be worth up to US$30 billion at current prices of roughly US$1,600 per ounce, and the mine would make Romania the EU’s largest gold producer, overtaking Finland, Sweden and Spain.
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