Rosia Montana gold mine: a future predictable catastrophe Introduction In Romania, attention is presently drawn to one of the richest in gold area in Europe, the historic Golden Quadrilateral region of Western Romania. Here, in 1997 the Canadian foreign investor Gabriel Resources Ltd. gained control over the Rosia Montana and Bucium area. The absolute needed working places in the Rosia Montana area, the sector deregulation based on legal, institutional and fiscal reform have encouraged Gabriel Resources Ltd. to claim a new gold rush. The company is in the process developing Europe's biggest open-cast mine with open cyanide processing in Romania's Apuseni region involving the resettlement and relocation of 1800 people living in 740 houses and 138 flats, 8 churches and their cemeteries, affecting 38% of the Rosia Montana commune surface. Besides the recognised environmental and social impacts of gold mining the main concern is that Gabriel Resources as a junior mining company has insufficient credentials and experience to carry out such a project. The International Finance Corporation of the World Bank and the European Bank for Reconstruction and Development was approached for supporting the project. General Background of the Romanian mining sector According to Environmental evaluation of the Romanian mining sector done by World Bank in 2001, the Romanian Mining Sector inherits an extensive degradation, serous organizational and financial problems, situation that continues to depredate. An increasing consciousness of these problems is shown but little efficient and constructive action exists for solving and preventing such problems. Nevertheless, the continuation and exacerbation of these problems does not come as result of absence of institutional framework or lack of regulation instruments and standards but lack of enforcement and sanction implementation of the existing regulations. With poor resources and low consciousness and competence for environmental management in the mining sector, the agencies that support and regulate this sector lack the necessary expertise. General problems and irregularities of Rosia Montana project Unsustainable development of the area which considers only the short term advantages expressed in working places and (10-15 years) disregarding the longterm environmental and social impacts. Gabriel Resources Ltd. As a multinational mining company has developed an aggressive and well trained capacity to manipulate the national jurisdiction and the international laws for usage in their own interests
The exploitation licenses were obtained in 2000 by Gabriel Resources breaching the Romanian mining law (1998) requirements, thus so far were not developed and authorised: - the development plan for the exploitation - the EIA - the post closure plan for environmental rehabilitation and the bank financial guarantee The technical documentation based on which the Romanian Government-through National Resource Agency- has passed the exploitation licence to Rosia Montana Gold Corporation (RMGC) should have included at least a principle agreement of the land and farm owners The resettlement program underway has failed to respect legislation being initiated without the prerequisite environmental approvals and without the formal consent of the affected population For the resettlement a true referendum is required not just making biased public statistics about the acceptance of the project by the local community. Manipulative public information campaigns organised by the Rosia Montana Gold Corporation convincing the community about the advantages of the project People are still very confused and very dependent on the mining working places promised by RMGC. As a result about 50% refuse to express an opinion and silence is golden in its truest sense, it working for RMGC.The locals hired by Euro Gold find themselves in a controversial position needing their jobs but not agreeing with the resettlement RMGC gains credibility by promising jobs to everyone, to the young unemployed people in particular: 15000 jobs were promised by the minister of industry himself disregarding the actual working places potential of such a project which is maximum 2000 Local problems and irregularities The local mayor was elected because he advocated the rejection of the gold project but the changed camps suggesting corruptive behaviour. Rosia Montana is a peaceful shining place yet underneath one can not fail to sense unrest, a deeply nervous unrest inflicted by the mining project and uncertain future. The valley of Rosie Montana has been declared Protected National Patrimony but will be directly affected by the mine project (through an official governmental decree in April 2000) An easy going and flexible trend can be identified in the case of county environmental and labour protection agencies passing the necessary documentation for exploration and exploitation Most of the mass-media representatives favour the mining project ignoring the existence of local resistance movement. Accordingly nowadays a strong mass-media campaign for corporate image improvement of RMGC is on the way both at local and national level. 2
Environmental impacts Plans to have an open environment cyanide processing of the ore using 50-80 mg cyanide/l water The tailing pond necessary for cyanide processing will be placed on top of the existing village Corna in close vicinity of Abrud city The tailing pond covering a total 600ha with a capacity of 250mil tons and 180 meters high tailing dam There is a danger from failure of structures and dams. Due to the large scale tailing pond, the unpredictability and toxicity of cyanide and the low monitoring capacity and responsibility of Romanian authorities there is a justified fear for: cyanide leaking into the soil, ground water and rivers The very promoted by RMGC cyanide destroyer technology, the cyanide neutralisation station and the water recycling plant have a questionable existence and help due to the high expenditures necessary for running such technologies Cyanide extracts gold from ore but it also makes soluble the other metals in the ore: arsenic, lead, uranium, mercury, iron, nickel, cadmium leading to unstable, toxic and it's unpredictable metal compounds Destruction of natural habitat at the mining site and at waste disposal sites Destruction of adjacent habitats as a result of emissions and discharges Destruction of adjacent habitats arising from influx of settlers Changes in river regime and ecology due to sedimentation and flow modification Alteration in water-tables Change in landform and visual intrusion Land degradation due to inadequate rehabilitation after closure Land instability Social Impacts 1800 people will be directly affected Everyone seems to forget about the historical sites that are included in the so called historical protected area and the isolated houses with their the endanger people that will live right under the mining open cast and the cyanide lake.( both in Rosia Montana and Abrud city) There are 750 family farms in this valley alone who live by what the land brings If they chose to resettle the locals will receive a 200 square meter bungalow offered by RMGC which will involve a highly expensive maintenance for which unemployed or retired people will not be able to pay The small resettling lands proposed by RMGC have no place to keep animals and to grow vegetables opposed to the current farm yards and orchards that people poses 3
Pollution Impacts Drainage from mining sites, incl. acid mine drainage and pumped mine water Sediment run-off from mining sites Pollution from mining operations in riverbeds Effluent from minerals processing operations Sewage effluent from the site Oil and fuel spills Soil contamination from treatment residues and spillage of chemicals Leaching of pollutants from tailings and disposal areas /contaminated soils and underground waters Air emissions from minerals processing operations Release of methane from mines Advantages of the Canadian Company: A free market economy Stimulation of foreign investment The exploitation licenses were passed from the state owned company Minvest to Gabriel Resources in 2000 Rosia Montana declared disadvantaged zone in 1999 expressed in: - manufacturing or production activity is subject to a 10-year VAT holiday, - import and export duty holiday - corporate tax holiday. - granting indemnification against environmental damages caused by `previous owners. Absolutely needed working places in the whole Golden Quadrilateral area Mining as the main occupation in the area As result of all the facilities and exemptions the business environment in Romania offers there is little national economic advantage coming from the project expressed in only 2% ($4.4.m p.a.) gross production royalty on all production to the Romanian government. Thus, 80% of the benefits will go to Gabriel Resources after exploiting the strategic gold resource of Romania. Conclusions Quite often the rule of law doesn't apply Weak enforcement of environmental law Weak enforcement of regulations and small penalties in the mining sector 4
Weak monitoring, technical and financial capacity of the authorities The Canadian company cannot obtain the upfront financial investment needed in Rosie Montana without the help of private lenders and multilateral financial institutions The financial institutions lending funds to this particular project are not promoting a sustainable private sector investment in a developing country but a danger to people's lives and the environment they depend on. Prepared by Alexandru Bara 5