Romania: World Bank Rejects Controversial Gold Mine Project

On October 10, the International Finance Corporation (IFC), the World Bank's private lending arm, announced that it would not financially support the controversial Rosia Montana gold mine project in Romania's Apuseni mountains. The project had come under fire from an international coalition of NGOs based on fundamental problems in the project proposal and concerns about Gabriel Resources, the project sponsor. In an official statement, the IFC said that it had "concluded that it is in everybody's best interest that we do not pursue discussions with the company regarding IFC's involvement in the [Rosia Montana] project."

The Rosia Montana project, if realized, would be Europe's largest open-cast gold mining operation. Gabriel Resources' plan, in order to be economically feasible, would transform the valley of Rosia Montana, the oldest documented settlement in Romania, into four open-pit mines. The neighbouring valley of Corna would be converted into an unlined cyanide storage 'pond' covering a surface of up to 600 hectares, held back by a 180-metre high dam. The pits would generate roughly 196.4 million tonnes of cyanide-laced waste. The international coalition opposing the mine points to the disastrous experience at the Baia Mare gold mine in Romania, where a cyanide spill in 2000 polluted the Tisza and Danube Rivers, contaminating the drinking water supplies of 2.5 million people and killing 1200 tonnes of fish.

In order to make way for this mega-project, more than 2000 people would have to be relocated. Many are subsistence farmers who do not wish to leave their lands. The IFC had projected that the mine would employ a workforce of 250 to 300 people over the mine's estimated lifespan of 15 years.

Toronto-based company Gabriel Resources (registered in Barbados) had approached the IFC for a loan rumoured to be approximately $250 million. The company has no previous mining experience. According to Dundee Securities, Gabriel Resources' founder and chairman Frank Timis has two convictions for possessing heroin with the intent to sell. An earlier venture of Mr. Timis, a Ukrainian petrol company, had been barred from the Toronto stock exchange. Gabriel Resources (T.GBU) is currently listed on the Toronto exchange.

In March this year, the mining company started an aggressive relocation program, in the absence of adequate public hearings or any Environmental Impact Assessment (EIA) studies. Toronto-based Planning Alliance is responsible for the resettlement. Prior to working with Gabriel Resources, it had been involved with the controversial relocation of 20,000 people at the Gold Fields mine in Tarkwa, Ghana.

The NGO coalition opposing the project welcomed the IFC's statement. In addition to MiningWatch Canada, coalition members include Alburnus Maior (a local community group), CEE Bankwatch Network, Mineral Policy Center (Washington, DC), Friends of the Earth International (Amsterdam), Greenpeace CEE (Vienna), and the Halifax Initiative (Ottawa).

The project was also heavily criticised by a group of 83 economics professors from Romania's renowned ASE university as well as by a host of international archaeologists who are extremely worried about the project's destructive impact on the area's unique Roman mine galleries and other archaeological treasures.

As part of MiningWatch's support to the affected communities, we arranged a visit to Canada by Codruta Nedelcu, a geologist working for Alburnus Maior.

Codruta was in Toronto on September 16 and 17 and in Ottawa on September 18 to 21. She met with journalists, ethical investment firms, other NGOs, government officials and the Export Development Corporation, to talk about the community concerns. She was accompanied in her meetings by David Brooks of Friends of the Earth Canada, Ioanna Cotutiu of Greenpeace and Joan Kuyek of MiningWatch Canada.

Following meetings in Canada, she traveled to Washington to meet with World Bank officials, with evident positive results.

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