Canadian firm’s gold-mining project in Romania falls flat

BUCHAREST – A plan by a Canadian company to establish Europe’s biggest open-cast mine in the Carpathian mountains has hit a stumbling block following objections by Romanian lawmakers, parliamentary officials said yesterday. The plan, which requires thousands of people to move to make way for drilling sites that could churn out over 500,000 ounces of gold a year, has angered ecologists, human rights groups and historians, who fear damage to local archaeological sites. A parliamentary committee weighing up the economic benefits and environmental drawbacks of Toronto-based Gabriel Resources Ltd’s $500 million project is expected to complete its report next week. Its approval, essential for the project to go ahead, appears to be in the balance following objections by some members. «There will be objections,» Senator Gheorghe Flutur, secretary of the 13-member body, told Reuters, adding that the absence of a local referendum was one of the main problems. Gabriel, which owns 80 percent of the Rosia Montana Gold Corporation (RMGC) set up to build and operate the mine in Alba Iulia, 400 kilometers (250 miles) north of the capital, aims to extract about 300 tons of gold over 14 years. Prime Minister Adrian Nastase dealt Gabriel a heavy blow last week when he said the plan was «environmentally risky.» His comments were welcomed by critics of the plan. «It’s very positive that (he) acknowledged the project’s real cost in terms of the social, environmental, archaeological and economic impact,» Eugen David, president of the Alburnus Maior, a group of local landowners, told Reuters. Environmental pressure group Greenpeace has also asked Romania to pull the plug on the project, saying a pond needed to store water and cyanide nearby would damage the environment. RMGC says its project will use the latest environmentally safe technology and would benefit Romania, bringing the state $880 million in profits and tax revenue, in addition to fuel and power representing a further $795 million. Gabriel has invested $50 million so far in Rosia Montana, mainly to resettle residents. It said construction of the mine would create 2,000 jobs and, once it is up and running, a further 540. Rosia’s jobless rate is 60 percent. «The project is fundamentally sound from an ecological and economic point of view,» Adrian Dascalu, a spokesman of RMGC told Reuters. «We anticipate that all this will be acknowledged by the committee and we will have a positive report.» But Flutur said the report, which might need to be debated in Parliament after the summer recess in September, was expected to criticize the absence of a referendum for Rosia Montana’s villagers and deem the financial benefits of the deal too poor. RMGC said it was not legally required to conduct a referendum but only public debates. «Romanian law does not require or foresee a referendum for an investment project but only for nationwide strategies,» RMGC’s lawyer Anca Dragoman said. Just as it rejected a major foreign investment, Romania unveiled plans for a drive to help local firms promote their own brands abroad to reduce its dependence on low-value-added foreign-run production for export growth. Around 70 percent of Romania’s exports to the EU, its main trading partner, are assembled in Romanian factories by foreign manufacturers who bring in technology and materials only to use the cheap local work force, exporters say.

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