Romania endorses law for major gold mining project Rosia Montana

By bne IntelliNews August 28, 2013

Romania’s government has endorsed the law that regulates the operations at the Rosia Montana major gold mining project and submitted it for further approval to the parliament, Mediafax reported. The bill was not on the government meeting’s agenda, but its approval was confirmed by a government note released later, the news agency said.

Extraction operations at Rosia Montana are scheduled to begin in November 2016 after all necessary permits are issued by the respective authorities (expected at end-2013), according to the draft agreement between the government and the project operator - Rosia Montana Gold Corporation [RMGC], Ziarul Financiar daily reported on August 20. The key controversy is related to the cyanide technology to be used at the mine.

The main stipulations of the law endorsed by the government refer to: i. the majority investor giving up gradually a supplementary 5.7% stake in the project to the Romanian state as the permits are issued [the state participation would hit 25%], ii. extraction royalties of 6% [versus the 4% regular rate for other mineral extraction projects] and iii. the project company finances the conservation and revitalisation of cultural heritage in the region with specific amounts of money.

The project is also declared by law as being of national priority – meaning that the permits are issued under specific, quicker terms by the relevant authorities.

The total revenue to the central and local budgets is estimated at USD 2.3bn, calculated at the current average price of gold (USD 1,200 per ounce). Other benefits for the local economy are estimated at USD 2.9bn. The total impact on the Romanian economy is expected to reach USD 5.2bn, the draft memorandum reads.

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