Rosia Montana Gold Corporation’s main shareholder, Canada-based Gabriel Resources, claimed in a July 14 press release that it has received an “illegal” invoice for a RON27mn ($8.6mn) payment resulting from the cancellation of VAT allowances extended to the company in 2011-2016 from the tax collection agency ANAF. The amount does not include the penalties and fines that the company understands might be levied as well.
Gabriel claims this is only the most recent “intrusive, costly and unjustified” action from a local authority since the company asked for the mediation of the World Bank’s arbitration court ICSID on its gold mining project in Romania, which is currently frozen.
Gabriel has been trying for the past 15 years to move forward with plans to develop Rosia Montana, which it says could become the largest gold mine in Europe. However, the project has been the victim of conflicts between rival political factions as well as fierce opposition from environmentalists.
Gabriel claims that the tax authority’s move comes after 18 inspections on VAT issues, which did not identify any irregularity.
Given the wide-ranging extent of the ongoing enquiries undertaken by ANAF, the large number of documents the company has to submit, and the long period of time under investigation, Gabriel believes that ANAF’s actions demonstrate the "discriminatory actions and the lack of good faith" of the authorities in regard to the company's investment in Romania. Furthermore, the purpose and the results of the investigations appear to be "an abuse of power by the Romanian authorities" in an attempt to seek a defence for the ICSID arbitration, Gabriel claims.
The Romanian government classified the Rosia Montana mining area as a historical site earlier this year, making the gold mining project nearly impossible. Rosia Montana village, where Gabriel plans to develop a large gold mine, has been listed by the government as a Class A historical site, Culture Minister Vlad Alexandrescu announced in January. The protected area has a radius of around 2km.
Earlier this year, Mediafax reported that Alexandrescu had notified the National Anticorruption Directorate (DNA) about irregularities related to the situation of historical monuments, including Rosia Montana.
The Rosia Montana gold mining project is being developed by Rosia Montana Gold Corporation (RMGC), which is 80% controlled by Gabriel, with the remaining 20% belonging to the Romanian state.
Under an October 2013 agreement with the Romanian government, Gabriel agreed to pay higher royalties (6% versus 4% previously) and increase state participation in the project to 25%, in return for the government’s promise to issue operating permits under a specified schedule. However, parliament rejected the bill in June 2014. The company said in early 2015 that it remained committed to developing Rosia Montana.