Romania eyes gold mine plan

Canadian project raises concerns

By BERTRAND MAROTTE
Monday, September 20, 2004 - Page B7


MONTREAL -- With its candidacy for membership in the European Union
on the line, Romania must be very careful to ensure there will be no
environmental fallout from a giant gold mine a Canadian company
wants to build in the cash-strapped country, Romanian President Ion
Iliescu says.
"From one point of view, I'm very interested in the presence of a
Canadian company and for the region where they're trying to develop
this mining activity," Mr. Iliescu said in an interview with The
Globe and Mail on the weekend.
"It is very important from the economic and social point of view,
but the question was raised concerning the environment," he said,
pointing out that meeting strict environmental standards is one of
the conditions for membership in the European Union.
Romania and its fellow Balkan countries have much work to do
catching up economically to their European cousins, but the country
cannot afford to risk breakneck progress at the expense of
environmental and social concerns, said Mr. Iliescu, who met briefly
with Prime Minister Paul Martin and Quebec Premier Jean Charest on
Friday as part of a whirlwind visit to Canada.
Romania hopes to conclude EU membership talks by the end of the
year, with an eye to joining the bloc in 2007."One of the requirements is the protection of the environment," he
said.
Toronto-based Gabriel Resources Ltd. has run into opposition from environmentalists, next-door neighbour Hungary, local rights groups
and even archeologists over plans to build a massive gold and silver
mine in the impoverished Transylvanian region of Rosia Montana.
The project would require the resettlement of about 2,000 people,
the digging of huge pits that would result in the destruction of two
valleys and two mountain peaks, as well as the use of a
controversial extraction process using cyanide.
The region has been a mining district for more than 2,000 years,
going back to Roman days, but protesters say Gabriel's project is
too destructive.
Gabriel owns 80 per cent of the project, which would create the
largest gold mining operation in Europe. The Romanian government
controls 19.3 per cent and three Romanian companies hold the
remaining 0.7 per cent.
Gabriel has stated that the site contains proven and probable
reserves of 10.6 million ounces of gold and 52.3 million ounces of
silver. The company had planned on starting production next year but
has postponed that date in the face of difficulties relocating
villagers and securing the necessary permits and environmental
consent.
Also clouding the gold project's future is this November's election
in Romania. Mr. Iliescu, 74, must step down after two terms as
President but Romanian legislators earlier this month amended the
election law to allow him to run for the Senate.
Mr. Iliescu also said his country is in talks with Hydro-Québec
about several energy projects, including small- and medium-sized
hydroelectric plants.
Romania, as well, is interested in talking to Canadian banks about
how to reform the country's antiquated and underdeveloped financial
system, he added.
"After a long period of difficulties we're working to establish a
normal course of development," he said.