Foreign companies partnership, “the only solution”

The president Traian Basescu said on Tuesday evening that Romania does not have resources to create jobs unless we look to resume activities of natural resources exploitation whether it is about gold, cooper or shale gas.

The President pointed out that the only solution is the partnership with foreign companies, given that Romania does not have the necessary amounts for exploitation and to protect the environment.

"At the moment, Romania has no longer resources to create jobs, unless we look with responsibility for the resumption of mining activity in areas that, by market developments, make again profitable exploitation of natural resources." said President Basescu, in a speech delivered at the investiture ceremony as Environment Minister Attila Korodi.

Basescu specified that the investment in Roşia Montană is blocked since 1997, but also reminded about the situation at Cupru Min.

"I want to say that due to demagogy and cowardice of Romanian dignitaries, the investment in Roşia Montană is blocked since 1997 and in the near future costly lawsuits are envisaged.”

"We also know the trick by which Cupru Min has managed to make profit last year. They simply did not invest to open fronts in order to continue surface exploitation .”

“The managers have created conditions to collect, probably, raw profit , but the company has no money to expand their operational front." added the President.

Basescu said that Romania does not have “ billions of Euros“ needed to import the necessary technologies to exploit these resources, gold, copper, shale gas, under conditions in which can be said that the environment is protected.

"Therefore, a partnership with foreign companies seems the only solution. Perhaps many people believe that the most important thing is the profit that can derive from these operations, whether we talk about gas shale, gold or copper.

"And I agree with you that is very important what our country obtains ." said Basescu.

The president said he requires the government to review urgently the royalty system related to natural resources in Romania.

"I personally ask the government to review all the remuneration that we have on natural deposits, within two weeks." said Traian Basescu.

Min Cupru privatization process "had failed"

The Economy Minister, Lucian Bode, said last week that the privatization process of Min Cupru has failed and will be resumed, because up to deadline, the Canadian investor, auction winner, Roman Copper, didn’t accept three firm demands of the Romanian side.

"The negotiations for signing the privatization contract ended Friday, 6 April, 24 o’clock, without parties having reached an agreement.”

"Roman Copper company representatives have not acceded to the conditions requested by Romanian state, conditions concerning contract payment, environmental obligations and of course, something that we wanted very much, namely the transparency of this contract." said Lucian Bode.

The investor refused, according to the minister, to give testimony in a bank account a guarantee of 32 million Euros for environmental investments and rejected the immediate publication of the privatization document.

Roman Copper representatives would not have accepted any full payment of the shares consideration worth 200 million Euros within 30 days after getting the opinion of Competition Council, namely integrated environmental licence.

On the other hand, the Canadian Company Roman Copper representatives claim to have accepted all the conditions set by the Romanian state for Cupru Min privatization even those not included in the specification for privatization, and expresses confidence that privatization may be finished as shown in a statement of Roman Copper.

Mining at Roşia Montană, "only under certain conditions"

The former Environment Minister Laszlo Borbely said that the mining project from Roşia Montană will be approved if there are environmental guarantees.

Laszlo Borbely said on Radio Romania Actualitati earlier this year that he will propose the government the environmental permit for mining project from Roşia Montană only under certain conditions.

"There are two interests : one - this mine will not pollute and we have confidence there are environmental guarantees and other ones for mining- extractions, so if it is approved, it will be the most modern mine, with the best technologies across Europe.

"At the moment, we are in a fairly advanced stage, but now I cannot prognosis the exact date when it is concluded, because there are some unclear issues." said Laszlo Borbely.

The mining project from Roşia Montană is a very controversial one.

Romanian Academy conducted an analysis on the benefits and disadvantages of this project.

The company will benefit from tax exemptions for 10 years and discounts on customs duties, so it will export gold and silver extracted at cost price.

For people in the area, benefits will come by the fact that the project creates a number of jobs in a lacking area: 200-550 (some with seasonal nature) in the preconstruction phase, 2000 during the construction phase and 500 in the operational phase.

The Romanian state will benefit from the mining royalties amounting 2 percent of the profit (estimated by some sources at about 4.4 million American dollars per year), an insignificant amount compared to the corporate profit.

Among the disadvantages listed in the report is that Romanian Academy project violates the Berlin Convention (10 October 2001) providing cyanide ban in mining operations within European Union.

Translated by Ioana Vioreanu

MTTLC, Bucharest University