Why The Rosia Montana Project Must Be Stopped

Rosia Montana Landscape

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From “The Hypocrisy of The Romanian Government: Why The Rosia Montana Project Must Be Stopped”

by Raluca Besliu on May 29, 2013 in Democracy and ElectionsEnvironmental PolicyEuropean Politics and Society

Dominating in the Parliament and presiding over the government, USL has taken multiple measures to demonstrate its lack of political consistency on the matter. The first sign after the election that the new USL government intended to pursue the Rosia Montana project was its decision to divide up Minvest SA Deva, a state-owned company specializing in mining, extraction, processing, and export of gold-silver and copper, and create a new part, called Minvest Rosia Montana. This new company was established to handle the Rosia Montana project and manage its afferent patrimony – consisting of the company’s package of shares in the mining project and the liabilities resulting from loans it has taken in order to participate in the project.

The Romanian state will be a direct shareholder in the newly-created company, through the Department for infrastructure projects and foreign investment. However, Gabriel Resources would obtain 80 percent of the profits, with the Romanian government getting only 20 percent. Rosia Montana is the largest known gold deposit in Europe and the third largest in the world. Its value is estimated to be around at around $20.8 billion, representing a huge possible endowment for Romania but one the country is likely to see little of. Even if Minvest Rosia Montana starts renegotiating the profit percentage, it is unlikely that the Canadian company, which has to satisfy its stakeholders, will be willing to allow the Romanian government a substantially larger share of the profit.

In addition, according to the Bucharest Academy of Economic Studies, after the environmental clean-up costs and the repayment of loans taken out by Minvest from Gabriel Resources, the project would generate nowhere near the $4 billion claimed by RMGC, but instead bring “nothing to the region but a long term sentence to poverty.” This conclusion dismantles the myth that the mining project would bring economic benefits, much hailed by both the company and the Romanian government. Simply put, Romania has nothing to gain from this project. The country would effectively just be offering its highly valuable gold resources in exchange for hundreds of thousands of tons of cyanide, which would destroy one of its most beautiful and ecologically diverse regions forever and transform it into a toxic wasteland.

Apart from creating Minvest Rosia Montana, the Romanian government has not released any public information about its intentions at Rosia Montana since the beginning of 2013, maintaining the same level of secrecy as the previous government, which it once so ardently criticized. For instance, the Committee for Technical Analysis, responsible for assessing the environmental impact of the Canadian project, restarted its operations in April 2013 for the first time since November 2011 but the Ministry of the Environment failed to publicly announce this development. The information only became available because Gabriel Resources published the information in a report for its investors. Furthermore, Gabriel Resources recently announced that, on April 22, 2013, it had obtained a new planning certificate for the project, which the Romanian government has also failed to disclose.

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