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Let’s start off with the good news. The Romanian Ministry of Culture, in conjunction with the Ministry of the Environment, Forests, and Water, officially added the Rosia Montana area to the list of sites to be considered by the United Nations as a UNESCO World Heritage Site.
Should this go all the way to the finish (which will take a few years) then it will be impossible for any mining company to operate in Rosia Montana and the historic town and surrounding valley will be saved. Since 1997, there have been plans to convert the entire area into an open pit mine in order to extract gold. Despite almost all Romanian politicians being in favor of the mine, popular opposition has led to years of delays in approving mining operations and now it looks like mining in Rosia Montana will be banned forever.
And now it’s time for the bad news. As we say in English, it’s not over ’til it’s over, so this issue won’t truly be finished until all of paperwork, inspections, and bureaucracy of the UN (in conjunction with the ever-shifting Romanian government) actually declare the Rosia Montana village and surrounding area a protected UNESCO World Heritage site.
Furthermore, the exact details of the agreement between RMGC (the company seeking to mine gold in Rosia Montana) and the government are not known but several Romanian politicians have previously warned that RMGC can sue the Romanian government if RMGC loses the right to mine. This is actually a pretty standard clause when it comes to mining (see below) so it’s likely that RMGC will be paid a few million dollars of Romanian taxpayer money if they’re permanently blocked from mining.
In addition, the Romanian government itself is a minority stakeholder in RMGC and so all of that money which was invested (including buying out people’s homes as well as moving cemeteries, etc) is now gone forever. The purpose of a gold mine is, of course, to make money, and Romania will lose both its initial investment in the company as well as the percentage of the profits which would’ve resulted in quite a lot of income.
But hey, an evil mining plan was thwarted! Time to celebrate, eh? Well, not quite so fast.
The Real Story of Rosia Montana
Just to be crystal clear, I have no sympathy whatsoever with RMGC or the process of mining gold by the cyanide leach method (which was the plan for Rosia Montana). I have no love of big corporations, especially mining ones, destroying Romania’s environment in the pursuit of a little profit.
I’m definitely happy that mining was stopped, even if it would’ve been more appropriate for ANRM (the National Agency for Mineral Resources) to deny RMGC permission to mine instead of using the “bypass” route of having the Culture Ministry declare the area a site of historic interest.
However, what concerns me is the sheer ignorance expressed in this Greenpeace article, which reflects what I’ve seen elsewhere in (most of) the Romanian and foreign press as well:
The story of how the government changed its mind starts with the story of the Romanian people speaking up against irresponsible corporations and environmental destruction. In September 2013 Romania saw the biggest street protests since the 1989 Revolution. Thousands of people, mostly young people, took to the streets holding up signs saying “The corporation doesn’t make the legislation”, “Corruption = Cyanide” and “We want nature, not cyanide”. They were speaking up for Roșia Montană, a little village in the north of Romania that sits on top of a gold mine.
Over and over, the narrative is “the people of Romania rose up against the evil corruption of mining companies and the Romanian government”. Well no, that’s not what happened at all, as I wrote about in 2013. Yes, a small local group of Romanian activists did tremendous work in opposing the proposed mine but it took the effort of an extremely dedicated Swiss activist to raise the money in order to put the issue in front of the Romanian public.
Then, and only then, did thousands of Romanians march against mining in Rosia Montana. In particular, young people showed a lot of (genuine!) enthusiasm in supporting the Rosia Montana community and opposing the plans to destroy it with mining. All respect goes to the crowds of protesters in the streets of university towns (Bucharest, Iasi, Cluj and Timisoara) and the slick social media campaigns on Facebook and elsewhere, but the non-fun and non-glamorous work was done years ago by Stephanie Roth and an American philanthropic organization.
Not the Greenpeace article listed above, nor any of the Romanian press reports that I’ve seen ever bother to mention Roth’s hard work even once. Instead, it’s the Romanian narcissism at play, everyone congratulating themselves for doing such a good job without extending the credit to dirty non-Romanians who actually did the heavy lifting long before it was “cool” to give a few likes to anti-RMGC pages on Facebook.
Even worse, all the focus on Rosia Montana has left equally destructive and harmful mining projects free to go ahead (see below) and do essentially the same thing that RMGC planned on doing without anyone paying even the slightest bit of attention.
How Gold Mining Works
Years ago, I had a very surreal experience of going out to a club with a friend of mine. After a few hours of having fun, drinking and dancing, we exited the club and were deciding what to do next when a random woman showed up on a bicycle (looking for someone else) and we got to talking. Somehow the topic of Rosia Montana came up and my friend, who was a mining expert, took the stance of being in favor of gold mining in Rosia Montana while the unknown woman on a bicycle was vehemently opposed.
I was just a bystander, watching and listening in fascination because I had literally never once heard anyone support the Rosia Montana mine except for some statements by corrupt politicians. It turns out that my friend was far better informed on the matter and, despite the late hour and drinks consumed, I received quite an education on mines and mining that evening. Mind you, I remain and have always remained opposed to gold mining at Rosia Montana.
Most people think of mining as essentially unchanged since the days when the Ancient Romans dug for gold and other metals in the Rosia Montana era – a few holes in the side of a mountain where men with dirty faces enter, going down long corridors and using picks or other tools to chip out chunks of rock that are then carted out.
That’s certainly the way mining occurred in 1849 (famous to Americans for the “Gold Rush” in and around San Francisco), the Victorian Era of Britain, and most of the Communist Era of Romania. Add in a few modern inventions like dynamite (to carve out those entry shafts more easily) and rail carts (to remove the ore) and that’s pretty much how mining worked for a long, long, long time.
Today’s mining is far different, as alien from those techniques as modern surgery is from amputating limbs with a hacksaw. Modern mining falls into two categories, one for coal and one for metals. Coal is unique because it was formed by layers of organic material (plants) millions of years ago, and is usually found today in thick seams (layers) made entirely from coal. So once you find where the coal is, you extract it, and 80-100% of what you’re pulling out of the ground is coal. Coal is found in mountains as well as plains (flat areas) and even sometimes on (or just below) the surface.
Mining for metal is vastly different because metal is always found inside of mountains. Every metal, including gold, that exists on the planet is the result of either volcanic action or tectonic action pushing metals up from the core of the Earth towards the surface. Diamonds, for instance, are usually recoverable due to volcanic action while gold (especially in Rosia Montana) is the result of tectonic action. To put it more simply, plates of the Earth pushed bajillions of tons of material upwards to form the Apuseni Mountains (where Rosia Montana is located) and along the way thrust up some gold as well.
Nobody disagrees that there is plenty of gold (as in tons of it) inside Rosia Montana. But what few people realize is just how little gold there is per cubic meter. There are no gleaming nuggets of gold waiting to be dug out of the ground. Instead, there are tiny, minuscule amounts of gold “salted” in the mountain. Imagine shaking a few grains of pepper on a bowl of rice and then stirring and mixing the rice. Extracting those grains of pepper is what gold mining is all about.
I’m easily amused so I went through the trouble of reading some test reports that another gold mining company conducted for a site near Rosia Montana. Their estimate is that the area will result in 0.27 grams of gold extracted per ton of material. Yes, you read that right. You have to excavate about 2000 kilograms of dirt, rocks and other metals to get one gram of gold.
The way modern gold mining works is that truly gigantic machines level off entire mountaintops (which was the plan for Rosia Montana) and then pile the material on top of special pads. Cyanide is then sprayed on the pile. Cyanide is used for gold mining because it binds with those tiny flecks of gold (the “pepper” in the “bowl of rice”) and sinks to the bottom of the pad where it can be collected. The rest of the material (called “tailings” in mine-speak) is then dumped somewhere.
Most Romanians opposed the Rosia Montana project partly due to the scary thought of using cyanide, a lethal poison, to extract gold. My pro-mining friend defended the idea because a) it’s how gold mining is done these days and b) if the leaching process is done responsibly (and correctly), the cyanide is recycled and NOT released into the environment. When all the mining is done, the cyanide is transported somewhere else for re-use (mostly because it’s expensive to produce tons of cyanide).
If gold mining works correctly, the cost of excavating, moving, and treating all those millions of tons of material is less than the value of the gold that’s extracted. Gold is pretty valuable, roughly $37,000 a kilogram, so RMGC figured they could turn a profit from what’s inside Rosia Montana. If the project had been allowed to go forward, the Romanian government would’ve gotten a percentage of all the gold recovered, and a few thousand local people would’ve gotten jobs in the mining industry or in secondary businesses (such as selling food to miners, etc).
Nonetheless, even in the best case scenario, gold mining always ends up with millions of tons of displaced earth which often includes heavy metals (like arsenic) that DO get in the environment and cause havoc. Mines also scar and disfigure the landscape and nobody likes the huge piles of metallic dirt and rocks that get left behind (usually piled up in pits). And when it’s all over and done, the jobs disappear, meaning everything was sacrificed for just a small amount of profit.
But that is how gold mining works. And while it’s ugly, nasty, and often quite toxic to the environment, I’ve yet to hear Greenpeace, anti-RMGC activists, or pretty much any Romanian ever recommend boycotting gold. No way. Everyone wants their jewelry, to say nothing of fancy electronic gadgets that have gold in them and, of course, gold coins and bullion.
If gold mining won’t happen at Rosia Montana, it’ll happen somewhere else because people keep buying gold, so now it’ll just be some other poor community which gets destroyed instead of Rosia Montana.
How Gold Mining Companies Work
The technology and process of mining metals (including gold) is pretty well-known and easy to learn about. However, owning a gold (or other metal) mining company is something far less well known, and for good reason. Mining companies are almost always shady, dirty, and immoral firms that operate under an ethos euphemistically called “rape and run”, meaning they mine the ore as fast as they can and then leave all the problems behind like environmental damage for someone else to fix.
RMGC is a perfect example of this. Read your average press report and you’ll learn that Gabriel Resources is a company “based” in Canada with shares traded on the stock market. Gabriel Resources isn’t a mining company but actually an investment company (which is based in Canada due to tax reasons, not because the investors are Canadian) that creates separate companies to mine a specific area. In the case of Rosia Montana, Gabriel Resources created a separate company called RMGC (Rosia Montana Gold Corporation), which is the firm that was set up by a slimeball Romanian named Vasile “Frank” Timis and which the Romanian government owns a minority share.
If RMGC had gone ahead, they would’ve leveled the mountain, piled up tons of earth on leach pads, added cyanide, extracted (and sold) the gold, and then that would’ve been the end of RMGC. A portion of the profits would’ve gone to Gabriel Resources (and its investors and stockholders), a tiny portion to the Romanian government, and plenty of money to the directors of RMGC itself (including Frank Timis).
If the gold mining had remained profitable, the company would’ve operated for years but if the price of gold fell (as it sometimes does) or the cost to extract a ton of material exceeded the amount of gold recovered (as it sometimes does), the company would’ve declared bankruptcy and walked away.
And the reason why the parent companies which create mining companies are almost always registered in places like Canada or Australia is because those governments are very pro-mining and offer enormous tax advantages on profits gained from mining.
Disaster is Almost Guaranteed
What’s key to understand is that (metal) mining rarely ends well. A lot of mining companies (really just shell companies for bigger firms) go bankrupt due to fluctuating prices for metals or other problems. Far worse is when “accidents” happen, such as the cyanide spilling out into local rivers or the leach pads cracking, again resulting in cyanide entering the environment. Or run-off from the tailings (the dirt/material left behind) leaches out other metals like arsenic into the environment. Or birds get attracted to the leach pits (as they sometimes do) and get sick and die, causing protests. Or dozens of other problems.
Once something negative occurs, the more-or-less fake company (RMGC in this case) can easily pull out and leave the locals and the government to clean up its mess. Almost all mining companies, including all the non-government owned mining companies in Romania, are set up this way precisely to minimize liability.
If something goes wrong, if the environment gets poisoned, if birds or fish die, if the water gets polluted, if a landslide occurs, if protesters shut down operations, or if the price of gold drops below an acceptable level, the shell company is designed specifically to self-destruct, protecting the high-level investors (in this case, Gabriel Resources) as well as the board of directors, who usually vote themselves multi-million dollar raises before declaring bankruptcy for the company.
A perfect example of this is a case I remember quite well, the 2000 Baia Mare spill. A shell company called Aurul, majority owned by a foreign investment company (Esmeralda Exploration) and minority owned by the Romanian government, was using cyanide in the mining process. The toxic tailings (the stuff left behind after the metal is extracted) were piled up in a big dam and then the dam broke (as they often do), poisoning the land and the Somes River, which flows into Cluj-Napoca (where I was at the time I learned of this). The company denied all responsibility and left the area, the typical “rape and run” modus operandi of mining companies.
Like it or not, this destructive, risky process is how almost all (metal) mining is done in Romania as well as around the world. Most mining occurs in rural areas, far from the sight of urban dwellers (who might mobilize in the streets to protest), and local people get bought off with jobs that pay far better than anything else available in the area and/or bribes (which go to politicians).
What makes Rosia Montana unique is that a Swiss activist was serendipitously in Romania back in 2002 and then spent a lot of time and energy in helping the tiny native protest group (composed of locals who would’ve been displaced from Rosia Montana) get some much-needed positive PR, which then snowballed into a major political issue years later.
In most cases, including other gold mines in Romania, there is no Stephanie Roth, no Facebook campaigns, and no protests in the street. And thus the evil of mining continues apace.
Too Bad You’re Not a Famous Mountain
In Romanian, the area of the southern Apuseni Mountains (which includes Rosia Montana) is known as the “Muntele Metalliferi”, which you don’t need a translator to realize means “Mountains with Lots of Metal in Them”. That’s why the Ancient Romans were mining there, and why many modern mining companies are interested in exploiting the metals therein, which include gold (but also copper, often found close by or intermingled with gold-bearing ore).
Mining companies call the area the Golden Quadrilateral. And if Rosia Montana is forever off limits, plenty of other nearby locations are set to be mined for gold by the exact same methods of applying cyanide.
In 2015, a company named Carpathian Gold got permission (link in Romanian) from the Romanian government to proceed with gold mining at a site called Rovina. Where is Rovina? Why, it’s just 20 kilometers (12 miles) from Rosia Montana. Sorry for the beauty and heritage of Rovina because, unlike Rosia Montana, nobody gives a shit about Rovina.
Carpathian Gold, which is an investment company that is deeply in debt, will mine the gold (and copper) in Rovina through a proxy company named Samax Romania, officially registered in Baia Mare. The company Carpathian Gold has a gold mine in Brazil and has already been fined heavily by the Brazilan government for creating an environmental disaster there. Yet somehow Samax (Carpathian Gold’s shell company) won the no-bid rights to mine gold in Rovina.
Not too far away, another gold investment firm called Eldorado Gold (which will use the proxy firm of Deva Gold to do the mining) also received authorization from the Romanian government to mine a site called Certeju de Sus. The Rosia Poieni area (which includes Certeju de Sus) holds roughly 60% of all of the estimated copper in Romania and is currently being administered by the Romanian-owned company Cuprumin. If you’re a long-time reader, you might remember my 2012 article The Ballad of Cuprumin, a tale of spectacular corruption and incompetence.
And so the gold mining (using cyanide) is set to proceed in other localities adjacent to Rosia Montana, as they aren’t famous and nobody is running an online campaign to stop it.
How They Keep Getting Away With It
So who authorizes all these mining permits? The answer is the National Agency for Mineral Resources (ANRM). The head of the ARMN is not a cabinet minister but holds a government rank equivalent to a deputy minister, and yet almost nobody in the press or the public ever pays much attention to ANRM, and that’s just how the mining companies like it. It’s even hard to find their website, as it it’s actually NAMR.ro instead of the more logical ARMN dot ro.
After digging around, you’ll find this page, which still lists RMGC as having a legal license to mine gold in Rosia Montana. And it’s true. What’s stopped RMGC before this week was waiting for authorization to begin mining from the Environmental Ministry, not ANRM.
The head of the ANRM is a man named Gheorghe Dutu, a PSD politician from Brasov who was given the job in 2012 by then-Prime Minister Victor Ponta. Well Ponta might be gone but Dutu is still deciding which areas of Romania can be destroyed and polluted.
Aside from domestic political reasons, Dutu has a good motive to keep on licensing shell firms to come poison Romania for profit.
International financial institutions like the IMF, the World Bank, and the European Commission have assisted us with increasing tax revenue from mining.
Indeed, as I’ve documented for years, the IMF (and others) have a long-range plan for Romania that includes selling off state-owned mining companies (like Cuprumin) as well as using increased tax revenue from mining operations (which would’ve included Rosia Montana) to pay off the IMF. As always, it’s the people of Romania who suffer so that the bankers get their money.
If the IMF gets its way, all mining done in Romania will be through foreign-owned shell corporations, with the Romanian government getting paid millions of euros that will then be turned over to the IMF. Along the way, a few mining jobs will be created, a few mountains will be destroyed, a few rivers will be poisoned, and a few politicians will get a benefit in the form of votes and bribes.
Ask a mining executive, or my drunken friend all those years ago, and they’ll tell you that civilization depends on mining. You might not like the pollution or the destruction of beautiful villages and mountains, but you can’t build computers, cars, and smartphones from wood and grass. And that’s all true. Modern life would have to change drastically if we no longer had iron, copper, and rare but important metals like palladium and molybdenum.
Gold though is pretty much just a moft, a capricious and irrational indulgence by humans who like how fucking shiny it is. There’s more than enough gold already mined, in the form of coins, bullion, and jewelry, to say nothing of the mountains of discarded electronic junk, to mee the industrial needs of modern life. Not one new gram of gold needs to be extracted from the earth.
Therefore, while my heart is gladdened by the news that it looks like Rosia Montana will be saved, I can’t help but conclude that as long as Romanians (and people everywhere) still buy and cherish gold, poisonous and destructive gold mining operations will still continue to take place. They’ll be happening soon just a few kilometers from Rosia Montana as well as in other countries around the world, so this week’s “victory” really only succeeded in pushing the problem somewhere else.
For everyone who was active on Facebook or marched in the streets of Rosia Montana, I tip my hat to you and say “well done”. But if you really want to make this world a better place, quit buying gold jewelry. And especially don’t forget to keep putting pressure on the government to stop all those other gold mining projects.