Dracula
Send this article to a friend
Print this page

» Waging war against a virus
» Nuclear fights for "green" status
» Risky business
» SA federation to fight polluters
» Rough ride for Congo miners
» Weeding out corruption


Playing the waiting game
Brendan Ryan
Posted: Thu, 06 Dec 2007

[miningmx.com] -- FED UP WITH South Africa’s black empowerment requirements and environmental permitting delays? Worried about the uncertainties with Zimbabwe’s indigenous legislation? It could be worse.

For example, you could be trying to develop a gold mine in Dracula country – the Western Transylvania region of Romania. That’s where Canadian junior Gabriel Resources is trying to get the go-ahead for its US$750m Rosia Montana project. It’s Europe’s largest undeveloped gold deposit, containing proven and probable reserves estimated at 10,1 m oz of gold and 47,6 m oz of silver.

But Gabriel has just hit a brick wall – which, on the face of it, concerns regarding the environmental permitting process. The review process for the environmental impact assessment (EIA) was suspended on 13 September by Romania’s Ministry of Environment & Sustainable Development. That followed a court challenge by two NGOs, despite Gabriel meeting all the government requirements placed on it.
a disregard for the rule of law
But the real reason appears to be that the project has become involved in a game of nationalistic football between Romanian and Hungarian politicians. That emerged from the presentation given by Gabriel CFO Richard Young to the Denver Gold Forum, where he indicated the opposition to the mine is coming from neighbouring Hungary.

Young commented: “This opposition is foreign and foreign-funded. This part of Romania was a part of Hungary until 1918. We’ve had protests in the region to the effect that the gold at Rosia Montana is Hungary’s gold not Romania’s gold. Some six percent of Romania’s population is ethnic Hungarian.”

Young said the region’s environment had been “plagued” by 2000 years of uncontrolled mining. “We’ll meet or exceed all Romanian and European Union standards, including the new EU waste management directive. We’ll leave the region’s rivers and soil cleaner than we found them. An independent team completed our EIA and the results have been confirmed by independent reviews.

“The minister’s action shows a disregard for the rule of law and the minister has acknowledged publicly that he expects to get sued by the company. That would take the matter out of his hands and put it into the courts, which would hold up the process even further. We’ll look at all our legal options and have filed an administrative complaint, which is the first step in the legal process.”

But Young indicated Gabriel was also looking at political options, particularly as it was likely there could be a change of government in Romania, in which case they’d be dealing with a different minister.

Click Here to subscribe to our daily newsletter
On the other side of the world another Canadian junior – Crystallex – continues to wait for final permission from the Venezuelan government to proceed with the construction of its proposed Las Cristinas mine. The company has been in limbo for the past three years waiting for the final environmental permit to be issued.

That’s despite the fact that Crystallex has been operating in Venezuela since the early Nineties and Las Cristinas would be the fourth gold mine that been permitted and built in the country. A year ago, former CEO Todd Bruce told the conference the final permit was expected at any time.

In June, Crystallex received confirmation from the Environment Ministry that it had approved the EIA. All the company had to do to receive it was make certain bond and tax payments. Crystallex made those immediately and received confirmation that all permit requirements had been fulfilled.

However, new CEO Gordon Thompson told this year’s Denver forum that the company’s still waiting for that permit and the delay is now clearly political. “We followed a process for two and a half years but it’s now a political issue to get that permit out. It’s a waiting game. We’re positive and not negative in our attitude. It’s like this in a number of places around the world. We have to hunker down and wait to get that permit.”

Meanwhile, Crystallex is getting offers from other mining companies to buy the fleet of mining and earthmoving equipment the company has sitting on docksides in the US waiting to be shipped to Venezuela. “It seems they’re more interested in the tyres than the machines,” Thompson quipped, referring to the current chronic worldwide shortage of tyres for heavy earthmoving trucks.

Not surprisingly, Crystallex’s share price has suffered. Its market capitalisation per reserve ounce of gold at $44 is the second lowest of its North American peers. The only company rated worse is – you guessed it – Gabriel, at $42/oz.