The privatization process of Cupru Min "has failed"

Mike Curtis, the BayFront Capital Partners partner, the owner bank of the Canadian company Roman Copper, sustain that the economy minister and the Canadian company representatives, the two parties have come to a verbal agreement regarding the privatization of Cupru Min, which they are ready to further respect.

Within a notification submitted Saturday to HotNews.ro editorial, he specifies: “this agreement includes terms requested by the government and accepted by Roman Copper, although they were not included within the initial form of the contract presented in the privatization package.”

“We were surprised when the negotiating committee refused to accept our written signature” –it is also shown within the Canadian company representative’s notification.

The Roman Copper representative states that the final verbal agreement was lately realized within April 6 and the Canadian company considers that this contract is on.

“We consider that we have a valid agreement which produces effects and we will continue to work with Romanian authorities in order to clarify these aspects”, it is also shown within the notification.

The privatization process “will be resumed”

Previously, the economy minister Lucian Bode had announced the discussions failure after midnight at Romania TV, specifying that the privatization process of Cupru Min will be resumed, because by the dead-line expires, the Canadian investiture winner of auction would not have accepted three requests of Romanian part.

“The negotiations for signing the privatization contract have ended Friday, April 6, at 00:00, without any agreement between the parties.”

“The Roman Copper company representatives did not adhere at the requested conditions by the Romanian state, conditions which have vised the contract payment, the obligations accomplishment and of course, a thing that I really care about, the transparency of this contract”, has declared Lucian Bode.

The investiture would have refused to deposit in a bank account a guarantee of 32 million for environment investments and has rejected the immediate publication of the privatization document.

The Roman Copper representatives would not have accepted either the integral payment of the actions value of 200 million Euros within 30 days from the notice receive from the Competition Council, respectively from the integrated authorization of environment.

Cupru Min owns Roşia Poieni exploitation, where they are concentrated 60 percent of the copper deposits of Romania.

Roman Copper did not make any statement regarding the eventual discussions failure.

Cupru Min, “a completely non-profitable company”

Roman Corporation has won at the beginning of last week the auction for selling the integral package of actions of Cupru Min, at the price of 200,77 million Euros, which is three times and a half over the starting price of the auction.

Cupru Min was sold by the state because it is a completely non-profitable company, and an investment of billions of Euros from the state in order to revive it would have created an enormous deficit, the buyer having also the possibility to sell further the unit, has affirmed the prime-minister Mihai Răzvan Ungureanu.

“In the last 20 years, did not exist any company managed by the state within the mining field which would had been profitable, there are pomps which absorb money from the budget in order to keep them at the surface. If we eliminate the subsidies and aerated, we observe that they are not at all profitable. Slowly, the state has struggled financially sub nurturing them, offering them illusorily the possibility of a stranger investment which has not really arrived, and their privatization, though pretty difficult, does not start today, but had started long time ago, in the ‘90s.”

“Assuming that we would have done an enormous investment, of billions of Euros or dollars, we would have created an enormous deficit”, has stated the prime-minister at Radio România Actualităţi.

Asked about the assumed investments of the buyer, the prime-minister pointed that no one buys in order to sell further, but he did not enounced it immediately.

“No one buys something in order to sell further what he buys. Ok, they can sell further, without any discussions, but at the end there is a profit, because otherwise there is money thrown at trash”, has affirmed the prime-minister.

He sustained that the selling price of Cupru Min was “very well consolidated, on a precise evaluation” and that the state would not have anyway the capacity to exploit the company in the lack of necessary technologies and investments.

According to prime-minister, Cupru Min is also an economically isolated company, because the extracted ore would have to arrive at Zlatna, at a plant ruined meanwhile and sold at scrap.

Asked where the ore will arrive in these conditions, the prime-minister has answered that “the investiture will take care, because he has all the interest for this.”

He showed that the state will charge the debts from Cupru Min, but he didn’t indicate the amount that would follow to be brought at the budget, sustaining that the exploitation plan of the buyer has to be seen.

“In this moment, there is a privatization contract, what will be the business plan it is something else”, has stated Ungureanu.

Copper deposit, worthing billions

The value of copper deposit from Roşia Poieni is estimated, theoretically, at 13-14 billion Euros, and the quantity at a billion tons of ore, has declared the director of the Mineral Resources Department within the Economic Ministry, Sorin Găman.

“The value of the deposit from Roşia Poieni is estimated, theoretically, at 13-14 billion Euros. From this value we have to deduct the extraction and processing costs. The costs cannot be anticipated by anyone, apart from the company, and the profit is impossible to be estimated”, has affirmed Sorin Găman.

He specified that the copper deposit is estimated at a billion tons of ore.

“In 2011, Cupru Min has extracted 2 million tons of ore, from which it was obtained 6,300 tons of metal, which is 0,3 percent”, has mentioned Sorin Găman.

Translated by Alexandra-Diana Mircea
MTTLC, Bucharest University