Newmont Mining Corporation, the world’s largest gold mining company, recently acquired a 10 percent stake in Canadian company Gabriel Resources’ Rosia Montana project in Romania. Newmont’s financing resuscitates a project that many hoped would be shelved, as Gabriel Resources’ missteps over the past two years appeared to have doomed the project. Global Greengrants Fund has provided two grants to the community groupAlburnus Maior, which is working to stop the project.
Opposition to this open pit gold mine is strong, because mining operations at this historic site would devastate the community of Rosia Montana and displace more than 2,000 people.
Rosia Montana is Romania’s oldest documented mining settlement, dating from Roman times. It features 18th and 19th century homes and churches as well as important archaeological sites, such as Roman thermae, fortified buildings and Dacian and Roman mine galleries. Plans for the mine call for the densely inhabited valley of Rosia Montana to be turned into four open pit mines (722 hectares), while the neighboring, equally inhabited Corna Valley would be converted into an unlined tailings pond with a surface of up to 800 hectares. The mine will use cyanide heap leach extraction methods, which means that the tailings will contain cyanide and heavy metals, among other pollutants.
Taking its name from Rosia Montana’s Roman name, the grassroots group Alburnus Maior was formed in September 2000 by local property owners who oppose the mine and refuse to sell their lands. They oppose Gabriel’s project on social, environmental, economic and cultural grounds. Alburnus Maior represents the interests of 350 farming families from the community of Rosia Montana and roughly 100 families from Bucium (the site of Phase Two of Gabriel’s project).
Resistance to the planned mine has given rise to the largest civil society movement in modern day Romania. A large number of volunteers around Romania and surrounding countries have been drawn to the cause. A cyanide spill in 2000 at Romania’s Baia Mare gold mine polluted the Tisza and Danube Rivers, killing fish throughout the river system and contaminating drinking water for 2.5 million people. Gabriel’s proposed Rosia Montana mine would be roughly seven times the size of Baia Mare mine and it is situated along the Aries River, which flows into the Tisza and Danube rivers. The tailings management facility is sited above the town of Abrud (population 13,000).
Eugen David, President of Alburnus Maior, is a 38-year-old farmer and landowner who says he will never sell his lands to make way for the mine. Until 2003, he was a mining engineer at a nearby copper mine. He and many Alburnus Maior members and volunteers have worked in mining and have a good understanding of mining issues and practices. Stephanie Roth, a 34-year-old French citizen and volunteer with Alburnus Maior, has helped coordinate the campaign.
Alburnus Maior has used a variety of tactics in its opposition to the mine. In 2002, the group sought the support of a well-established and experienced NGO, TERRA Mileniul III. Global Greengrants Fund’s support of Alburnus Maior began with a grant to TERRA Mileniul III to help Alburnus Maior generate press attention and coordinate a network of groups working against the mine. This resulted in a common declaration sent to the government, parliament, embassies and the press. In October 2002, Alburnus Maior had its first victory, persuading the World Bank’s International Finance Corporation to withhold financing for the project.
By autumn 2002 Alburnus Maior had widened the network of groups working against the mine. Since the project would mean displacement of several churches, their relics, and cemeteries, Alburnus Maior coordinated a response from Catholic, Protestant and Unitarian churches. Church leaders declared their refusal to relinquish their properties. Churches are among the largest property owners in Rosia Montana. In November 2003, Romania’s Orthodox Church declared that its properties in Rosia Montana were not for sale, either, and made a strong statement against the mining project.
The protest from the archaeological community included a petition signed by more than 1,000 archaeological scholars and institutions. UNESCO’s International Council on Monuments and Sites passed two resolutions against the mining project. In August 2004, a commission from the European Council’s culture committee visited Rosia Montana to confirm the area’s unique archaeological importance. The Romanian Academy, the country’s highest scientific body, issued a statement calling on the Romanian government to put an immediate halt to the project in 2003 and has since restated its opposition. In late August, 2004, Alburnus Maior organized a free concert (co-sponsored by MTV Romania and others) that brought 4,000 people to Rosia Montana.
After a visit to the area by a delegation from the European Parliament, the Romanian Ministry for the Environment in November 2002 confirmed that the entire project and its environmental impact assessment (EIA) would have to meet EU regulations. This requirement means that the Romanian government cannot approve the EIA without consulting interested parties – and EU norms specify that all affected communities and any NGO with a direct or indirect interest may register to become a consulted party. As of July of 2004, more that 80 “interested parties” have officially registered to be part of the EIA procedure.
In 2003, Global Greengrants Fund made a second grant to Alburnus Maior to help the group challenge Gabriel Resources’ EIA for the project. Alburnus Maior commissioned a report from attorneys at the European Law Institute. The report armed Alburnus Maior with knowledge and legal arguments to lobby EU parliamentarians and to begin the process of suing the authorities responsible for initiating the involuntary relocation program and other activities before an EIA for the project was approved.
Since mid-2003 Gabriel Resources has warned its investors about the strong possibility of delays due to inadequate funding, inability to secure environmental permits, difficulties in acquiring surface rights to the land, and delays due to citizen opposition. In early April 2004, the company filed a public securities document reporting that delays had become more significant and mentioning that with the company’s limited financial resources there was no guarantee of sufficient funding for further exploration and development. The report also acknowledged the company’s limited experience. Importantly, it confirmed that the project could not begin until all properties had been purchased. In early May 2004, Alburnus Maior obtained this report and published a press release. Two days later Gabriel’s shares fell from $3.50 to $1.20 Canadian.
With a 70 percent increase in projected costs and continued opposition from Gabriel’s shareholders about the costs of relocating local people, Gabriel entered an agreement in August 2004 with Quest Capital Corporation for a bridge debt financing facility. Forced to find alternative long-term financing, on August 30, 2004 Gabriel announced a 10 percent subscription agreement with Newmont Mining Corporation of Canada Ltd., a subsidiary of Denver-based Newmont Mining Corporation. The agreement boosted Gabriel shares more than 50 percent and will likely mean a much longer and more challenging battle to stop the project.