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Countries covered: Romania
The two main gold projects in Romania saw numerous developments throughout the year. The Certejgold project, backed by European Goldfields, made advancements in the permitting process to allow forfurther exploration and mining in the Certej area. The Technical Feasibility Study attached to the projectwas approved by the National Agency for Mineral Resources and its Environmental Impact Study was inthe latter stages of assessment. Though permits have not yet been approved, the company is confident inthe progress being made for a favourable outcome. The other notable project is the proposal for thedevelopment of the Rosia Montana gold mine. If approved, it would be the largest of its kind in Europe,with estimated resources of 10mn ounces. Gabriel Resources, the Canadian-based mining companybacking the project, have faced more obstacles in what has become a long and bitter battle between themining giant on one side, and the government and public of Romania on the other.
The Rosia Montana area is rich in resources, with high-value gold readily available for extract from itsdeposits. A quick resolution to the debate between Gabriel Resources and other interested parties looksunlikely amidst the controversy caused by the project’s proposal. Local inhabitants and environmentalistshave a bitter distrust of mining companies due to their experience of areas being damaged by the miningprocess. Gabriel Resources’ promise to not only clean up any areas damaged by them, but also by miningprior to their operations, does little to assuage the public’s suspicions. There is huge potential foreconomical benefit for the country, including a wealth of employment prospects, if Gabriel Resourceswere permitted to begin the project. However, economic gain alone is not enough to persuade those inRomania who believe there is more value in an untarnished landscape and environment. It would appearthat the company is prepared to exhaust every avenue to achieve a go-ahead. Cyanide leaching is a largepart of the contention being the most efficient way of extracting the gold from its ore. Gabriel Resourcesare promising low levels of just 2-3ppm, far below the EU regulation of 10ppm, but this has yet toconvince those who remember the disastrous cyanide spill at Baia Mare in 2000, which devastated theenvironment surrounding the spill for 100s of kilometres, including cross border pollution into Hungary.
Though an immediate resolution seems unlikely, it is also unlikely that the gold deposits will remainuntouched in the long run.
The government continues to voice support for coal mining companies and in November 2008 RomanianPresident Traian Basecu stated that in order to assist industrial companies, an expansion of the domesticmarkets and bank lending for production must be achieved. The state wanted to encourage banks to bemore forthcoming with loans to companies wanting to expand production. In July 2008, Minister ofEconomy and Finance Varujan Vosganian said that the coal mining company CNH could be profitable ifit was allowed to be debt free. For this reason the government decided to intervene and block foreclosureprocedures for 6 months, which had been launched in a bid to retrieve 844mn LEI to the state budget. InJune 2009, the government also announced intentions of granting state aid of 200mn LEIT to SNLOstating that the company would benefit by receiving compensation for its current debts.
Many sectors of the mining industry have been detrimentally affected by the ailing global economy.
Falling prices in metals saw a decrease in output across many companies producing aluminium, zinc,lead, coal and steel, with many companies downsizing production and personnel in preparation for theexpected period ahead before the market recovers. Foreign investment is expected to slow down asfurther effects from the economy are realised. Alro Slatina announced cuts in aluminium production of44,000 tonnes from 260,000 tonnes for 2009. In December 2008, the company also announced that theywere considering 1,200 job losses in 2009. Alro Slatina had already reduced its work force by 93% from2007 with just 3,392 employees at the end of 2008. Mechel Targoviste and TMK Resita, the two biggeststeel producers also stated expected production cuts and redundancies for 2009 and in January 2009, zincand lead production firm Mytilineos temporarily suspended their production lines and announcedredundancy plans for 1,050 employees which accounted for 80% of the workforce. Resumption of higherproduction and employment levels is heavily dependent on the conditions of the global market and themetal prices which currently mean metal production is not as profitable. Many metals such as lead,aluminium and zinc have fallen around 50% of their value in 2008.
Out of about 170,000 miners registered in 1997, only about 49,000 were still employed in the field byOctober 2006. Further redundancies were experienced in the mining sector, particularly towards the endof 2008 as demand for steel, aluminium and coal began to wane. Further cuts in personnel were expectedto occur in 2009. Only on recovery of the economic climate could an increase in employment beexpected.
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