Romanian Villagers Oppose Canadian Gold Mine at Rosia Montana

A new citizens' organization called Alburnus Major has been organized in Romania to oppose an open pit gold mine being promoted by Canadian company Gabriel Resources. They claim to represent 80% of the people living in Rosia Montana, the oldest village in Romania.

Gabriel intends to relocate their town and build a gigantic open pit gold mine on the site. The mine will also destroy an invaluable archaeological heritage site dating from Roman times.

Alburnus Major spokesperson, Francoise Heidebroek, says: "A large majority of the people are totally opposed to this resettlement operation. Nobody has consulted the population and asked whether they agree to move from their homes. Nobody has asked if they agree that their churches and cemeteries be excavated."

According to the Northern Miner, the village "epitomizes the pastoral tranquillity of rural Europe." Although there has been mining in the area for 2500 years, it was on a small scale. The village is considered Protected National Patrimony by a government decree of April 2000. Gabriel Resources estimates that about 800 residences and 2000 people will have to be relocated to make way for the mine.

"Although the 11 members of the local planning council of Rosia Montana have approved a new Land Use Plan to allow mining operations, they did so without organizing a referendum. Such an approval is illegal under Romanian law. The prefect of the region has confirmed that the land use plan is not valid without a referendum," says Heidebroek.

The director of Archaeology of Romania's National Museum of Unity, Horia Ciugudean, states: "the area is very, very rich archaeologically." The Roman empire established mining there in 200 BC, and a village was built two kilometers from the site. The ruins now lie under the town, and will be destroyed by the mine. Two years ago, a team of German and French archaeologists uncovered 20 altars bearing inscriptions to Roman gods.

The Canadian firm, Gabriel Resources, has obtained licences to exploit this large gold body in the heart of Transylvania, in an area known as the golden quadrilateral. Grade is 1.4 ounces per tonne. The mine is expected to produce 500,000 oz per year at about US $157 million per ounce over a 16 year mine life. The company expects to payback the costs of development over 2.5 years, with an after-tax net profit of US$1.1 billion. They have been indemnified by the Romanian government against damage done to the environment by previous operators.

Romania is a disadvantaged country with a history of mining. It is desperate for foreign investment. To attract this mine, the Romanian government has designated the Rosia Montana region as a "Disadvantaged Zone" for 10 years or longer. This designation — with other benefits — means that the company enjoys the following:

  • No VAT or customs duties on imports or the manufacture of depreciable assets
  • No corporate income tax on profits
  • No restrictions on foreign exchange
  • No restrictions on payments of dividends
  • No restrictions on repatriation of capital
  • Corporate tax rate of 25%
  • Indemnification against environmental damage caused by previous owners

The government of Romania holds a 20% interest in the project through the state mining company Minvest, and will receive a 2% gross production royalty.

The company has hired Planning Alliance of Toronto to manage the resettlement of the village. Resettlement packages, relocation and schedules will have to be negotiated before the mining can begin. Gabriel Resources is very optimistic about resettlement prospects, and expects to have the first phase finished this year.

Alburnus Major alleges that the Romanian authorities in charge (National Agency for Mineral Resources, Ministry for Environmental Protection, National Institute of Geology) lack the necessary financial and technical resources to carry out environmental monitoring and to assess environmental impacts. Hungary is currently suing Romania for US$105 million in environmental damages, alleging negligence for the collapsed tailings dam at Baie Mare last year, which destroyed life in the Tisza River.

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For more information please contact: Joan Kuyek, National Coordinator, MiningWatch Canada (613) 569-3439