Due to all of the protests against the PSD’s attempts to legalize corruption earlier this year, it escaped most people’s attention that Grindeanu’s Culture Ministry finally filed the paperwork to make Rosia Montana a UNESCO World Heritage Site. Alas, it’ll take until July 2018 for it to be certified and approved by the United Nations, but it’s a good start.
Unfortunately for the people of Romania, the company that wanted to mine Rosia Montana is very angry:
Gabriel Resources is seeking $4.4 billion in damages over the long-stalled plans to develop Europe’s largest gold mine in Romania’s Rosia Montana region, in its complaint filed with the World Bank arbitration panel, the company said.
$4.4 billion is over 17 billion (new) lei, far higher than “few million dollars” I had predicted back in 2016:
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.
The good news for Mafia chief Mihai Tudose and company is that the final ruling by the World Bank’s International Centre for Settlement of Investment Disputes won’t occur until 2020, long after today’s controversial political issues are settled. In other words, Dragnea and the PSD can kick the Rosia Montana can down the road for a while yet.
Romania’s acts and omissions have frustrated and prevented implementation of the Project, including by imposing unjustified administrative delays in the permitting process, imposing shifting and non-transparent legal requirements, politicizing applicable legal and administrative processes, and ultimately abdicating the responsibility to make decisions on the permitting of the Project in contravention of the applicable legal framework.
I’m no fan of cyanide mining, but I have to admit that Gabriel isn’t wrong here. I personally have dealt with unjustified administrative delays as well as non-transparent legal bullshit and even politicizing legal and administrative processes while the self-same government abdicated its responsibility on making decisions during my immigration “trial” back in 2014. Hell, I could’ve written Gabriel’s brief!
Of course, the whole Rosia Montana saga has been evil right from the beginning. A Romanian-born con man named “Frank” Timis who emigrated to Australia in the 1970s ginned up a rape and run Jersey Islands shell company to obliterate several mountaintops in and around the Rosia Montana area. Things would’ve probably gone smoothly had he not run up against a Swiss activist named Stephanie Roth.
Back in June 1999 when Radu Vasile was the Prime Minister and Emil Constantinescu was President, the Romanian government decided to award a no-bid contract to mine Rosia Montana. Considering the similar gold mining project that disastrously failed in Baia Mare a few months later, it’s pretty clear that the pre-EU Romanian government had no fucking clue how to responsibly regulate foreign mining companies.
Fast-forward through 2002 and then the rise of social media in the 2010’s, and widespread protests effectively tied the hands of every prime minister and president (including Ponta, Boc, Nastase, and Basescu) who wanted Rosia Montana to be mined. Now, the issue is pretty much over, even as identical cyanide gold mining is going on in just a few kilometers away in places like Rovina and Certeju de Sus.
It might take until 2020, but it looks likely that the Romanian government is going to be on the hook for a sizeable sum (not 4.4 billion, but still a lot of money) all because a few politicians who are either dead or long out of office signed some papers to let foreign shell companies poison and destroy the landscape in order to eke out some temporary profits.
From Gabriel’s own World Bank arbitration papers:
As thus developed by Gabriel, the Roşia Montană Project encompasses one of the largest gold deposits in Europe, including proven and probable mineral reserves of 10.1 million ounces of gold and 47.6 million ounces of silver, contained within 215 million tonnes of ore at average grades of 1.46 grams of gold per tonne of ore and 6.88 grams of silver per tonne of ore.
Don’t let all the math bore you. Gabriel is saying that they can get 1.46 grams of gold from 1,000 kilograms of mountainside. Using the spot prices I found online ($1,236.30 per troy ounce), that comes out to $58.03 worth of gold per 1,000 kilograms of dirt. Yep. That’s the ugly reality of gold mining, and remember that Gabriel (and other companies) consider Romania to have some of the most profitable (i.e. dense) deposits of gold anywhere in the world.
And all this for what? Some shiny metal. Since 1999, Romania has had two options: let Gabriel spray cyanide on 7 million tons of mountain in order to extract $58 worth of gold per ton or else fork over (up to) 4.4 billion dollars in court in compensation.
That’s a bit more expensive than the 2 billion wasted on a contract with Bechtel that saw just 52 kilometers of highway get built before it was canceled and Romania had to pay a cool $500 million in penalties for breaking the contract. And don’t even get me started on the Cupru Min clusterfuck.
Truly, the Romanian government’s contracts with foreign firms are the gifts that keeps on giving (exorbitant profits to investors).