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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Canadian mining company Gabriel Resources (Yukon, Canada) is seeking damages amounting to billions of dollars after launching a legal challenge against Romania's government for blocking its Rosia Montana project, Europe's largest potential gold and silver mine.
In the summer of 2013, the ruling Social Democratic Party approved draft legislation to allow the controversial Rosia Montana project to go ahead, but then reversed the decision a few weeks later due to ongoing protests over the proposed use of cyanide to extract the precious metals. Gabriel's project is run by the local Rosia Montana Gold Corporation (RMGC), of which it controls a stake of more than 80%. For additional information, see September 26, 2013, article - Trouble for Europe's Largest Gold Mine.
Gabriel Resources has now filed a request for arbitration before the World Bank's International Centre for Settlement of Investment Disputes (ICSID) against Romania. It is seeking an estimated $2.5 billion in damages.
The company is claiming that through its "actions and inactions," Romania has blocked and prevented implementation of the project without due process and without compensation.
"The company still believes the interests of all stakeholders in the project, particularly the Romanian state, would be served best by its permitting and development," said Jonathan Henry, president and chief executive officer of Gabriel. "We have attempted dialogue with the Romanian president and government in order to discuss an amicable resolution to the dispute. In light of their apparent and disappointing unwillingness to engage at all, it has become the company's sole recourse to commence international arbitration."
Rosia Montana is a community of 16 villages located the Golden Quadrilateral, a district in the South Apuseni Mountains of Transylvania. Gabriel's Rosia Montana concession area, which affects four of these villages, has measured and indicated resources of 17.1 million ounces of gold and 81.1 million ounces of silver (513 million tonnes at average grades of 1.04 grams per tonne (g/t) gold and 5g/t silver), including proven and probable reserves of 10.1 million ounces gold and 47.6 million ounces of silver (215 million tonnes at average grades of 1.46g/t gold and 6.88g/t silver).
Rosia Montana has become a particularly controversial project in part due to the 2000 cyanide spill at the Baia Mare gold-mining operation in northwestern Romania, often cited as Europe's worst environmental disaster since the Chernobyl nuclear accident.
The stand-off between Gabriel and Romania comes just as fellow gold mining company Eldorado Gold Corporation (NYSE:EGO) (Vancouver, British Columbia) struggles with the Greek government to get the construction its Skouries gold/copper mine in the north of Greece back on track. For additional information, see August 19, 2015, article - Eldorado Wins Greek Court Approval for Skouries Gold Mine.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
In the summer of 2013, the ruling Social Democratic Party approved draft legislation to allow the controversial Rosia Montana project to go ahead, but then reversed the decision a few weeks later due to ongoing protests over the proposed use of cyanide to extract the precious metals. Gabriel's project is run by the local Rosia Montana Gold Corporation (RMGC), of which it controls a stake of more than 80%. For additional information, see September 26, 2013, article - Trouble for Europe's Largest Gold Mine.
Gabriel Resources has now filed a request for arbitration before the World Bank's International Centre for Settlement of Investment Disputes (ICSID) against Romania. It is seeking an estimated $2.5 billion in damages.
The company is claiming that through its "actions and inactions," Romania has blocked and prevented implementation of the project without due process and without compensation.
"The company still believes the interests of all stakeholders in the project, particularly the Romanian state, would be served best by its permitting and development," said Jonathan Henry, president and chief executive officer of Gabriel. "We have attempted dialogue with the Romanian president and government in order to discuss an amicable resolution to the dispute. In light of their apparent and disappointing unwillingness to engage at all, it has become the company's sole recourse to commence international arbitration."
Rosia Montana is a community of 16 villages located the Golden Quadrilateral, a district in the South Apuseni Mountains of Transylvania. Gabriel's Rosia Montana concession area, which affects four of these villages, has measured and indicated resources of 17.1 million ounces of gold and 81.1 million ounces of silver (513 million tonnes at average grades of 1.04 grams per tonne (g/t) gold and 5g/t silver), including proven and probable reserves of 10.1 million ounces gold and 47.6 million ounces of silver (215 million tonnes at average grades of 1.46g/t gold and 6.88g/t silver).
Rosia Montana has become a particularly controversial project in part due to the 2000 cyanide spill at the Baia Mare gold-mining operation in northwestern Romania, often cited as Europe's worst environmental disaster since the Chernobyl nuclear accident.
The stand-off between Gabriel and Romania comes just as fellow gold mining company Eldorado Gold Corporation (NYSE:EGO) (Vancouver, British Columbia) struggles with the Greek government to get the construction its Skouries gold/copper mine in the north of Greece back on track. For additional information, see August 19, 2015, article - Eldorado Wins Greek Court Approval for Skouries Gold Mine.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
