Rosia Montana the political football

The announcement of what is the effective mothballing of the Rosia Montana Gold Corporation (RMGC) project is an economic and social disaster for the 300-plus full time workers employed by the company, the majority of whom now find themselves laid off, and for the local inhabitants of this economically blighted valley village, who face an even more uncertain future than a week ago.

 The only certainly for those who will suffer hardship through the freezing of the project is that the mine will continue to be a political football, kicked around by comfortable western environmentalists, rich local landowners, business interests hoping to benefit from a faltering project and opportunist Romanian and Hungarian politicians. Or anyone who feels like putting in their two cents- worth, without knowing the first thing about this complex and technically sound project. It has been trendy to dump on this project, though as fads come and go, this too shall pass. But why should disadvantaged people get caught in the middle?

 

In recent months the project has looked more like an episode from the television show LA Law than a mining company seeking to extract gold and silver from the ground. The project has found itself up to its briefs in court battles and dealing with a political class that it at best supine at worst downright Machiavellian. Makes you wonder who’s scripting this?

 

The clear losers in this battle are the people of Rosia Montana. The clear winners, outside of lawyers and consultants, are those mentioned above who have effectively hijacked the real concerns of local people for their own partisan interests.

 

It’s worth recounting what has occurred over the past few months.

 

In September the Ministry of the Environment and Sustainable Development suspended the evaluation of the Environmental Impact Assessment (EIA) in a move that was clearly political, having no basis in Romanian law.

 

In November the local court in Cluj annulled an urban planning certificate that Alba county council had granted to RMGC. Alburnus Maior, the lead NGO opposing the mine and George Soros’ Open Society Foundation led the challenge to this urbanism certificate. In reality the certificate is not even a permit or an approval and cannot be legally challenged according to Romanian law. To add to this the court of appeal in Brasov also cancelled a certificate allowing RMGC to work on the Carnic Massif hills where traces of Roman mining remain.

 

On top of this The Romanian Senate is waiting to approve a bill that bans the use of cyanide in mining, a substance that is essential to the extraction process proposed by RMGC. Last week, the same cyanide opposers pitched tent at the EU Parliament to debate the merits of banning cyanide in mining. They got little audience, beyond the greased wheels of their PR machine, but they don’t care. The likelihood of anyone in the EU paying attention to their rants is unlikely, given that stringency with which the newest Mine Waste Directive was crafted, before being passed recently. As stated on Goldenmyths the project has gone way beyond the European Union industry standard for what is required for the use of cyanide. With Romania now part of the EU, the project will be the first permitted under this new, more stringent, environmental law for the EU. RMGC plans to help to clean up past damage from 2000 years of uncontrolled mining, leaving the region's rivers and soil actually cleaner than before.

 

In the midst of these court battles, NGO lobbying and vested interest it’s sometimes difficult to remember that the Romanian Government owns 19% of this project. It’s also worth remembering what such political opportunism will cost Romania. The project contains reserves of 10.1 million ounces of gold and 47.6 million ounces of silver. Measured and indicated resources stand at 14.6 million ounces of gold and 64.9 million ounces of silver, in addition to inferred resources of 1.2 million ounces of gold and 3 million ounces of silver.

 

Recent turmoil in the world economy has seen gold climb to record highs in commodity markets, and with it a demand for new gold mines. In 1990, gold traded at $423 for a troy ounce on world markets. In 2005, that figure had risen to $513. Today it stands at $805. Not only is gold seen as a hedge against inflation, but also demand for the metal is at record levels. Four-fifths of all new gold mined is used for jewellery, most of it going to the US and fast-emerging markets in China and India.

 

A supine Romanian political class has allowed the National Liberal party and the Democratic Union of Hungarians in Romania to act as a Trojan horse for those seeking not to stop gold mining in Rosia Montana but for it to be carried out by others.

 

The Rosia Montana project may have been mothballed, Goldenmyths has not. The battle to bring jobs and prosperity to Rosia Montana is not over.