Romanian villagers face down Canadian mining corporation over cyanide lake.

A small charity has succeeded in blocking a multi-billion dollar Canadian gold-mining operation in the Romanian village of Rosia Montana. Romania’s new Prime Minister, Victor Ponta, has promised a “transparent” investigation into the controversial project “so that permitting decisions take into account the national interest, environmental protection and European legislation.” This could set the project back by at least five years.

Romania’s new government, run by the leftish Social Democratic Party (PSD), is more responsive to environmental protest than the outgoing lot (who were avid supporters of the Canadian gold-miners). The new government have also promised to impose a moratorium on controversial shale-gas-fracking operations, following street protests earlier in the year against a contract the outgoing government signed with Chevron. But Romania is one of the poorest members of the European Union and it can not afford to shake off foreign investment lightly.

For 17 years Gabriel Resources Ltd (a Jersey-based, Toronto-listed company) has been fighting over 100 legal challenges by Albernus Maior, an association of 60 property owning “holdouts” who stubbornly refuse to sell their smallholdings in the Transylvanian village of Rosia Montana (located in the the Carpathian mountain range). One of the company’s most controversial proposals is to demolish the protected mountain of Carnic and process its gold ore with cyanide, a process that would destroy the 70 km of mining galleries, including 7km that were built by the Romans. Currently, the ancient mining galleries are open to the public.

In April 2012 the village charity Alburnus Maior won a landmark case in the Alba County Court that declared the company’s “urbanism” plan (the basis for all subsequent permits) null and void. This decision was confirmed by Attila Korodi, Romania’s former Minister of the Environment and is unlikely to be overturned by the new government. The opposition say this means the project is dead but the investors show no sign of leaving.  The mining company refuse to publicly accept that their project is blocked.

“Our secret weapon has been challenging the gold mining operation in court” said Eugen David, the farmer who runs Alburnus Maior. “When we found out that the Canadians wanted to destroy three villages, four mountains and create the biggest cyanide lake in Europe we mobilised.”

But Alburnus Maior struggles to inform the Romanian public about their point of view; the media tends to ignore them and their website is poorly designed and over technical. Their attempts to organise street protests in Bucharest have failed to muster big numbers. Most Romanians are bored by the delays, confused by the seemingly endless court cases and assume the project will create new jobs in a poor mountain area.

“Although Rosia Montana is Romania’s biggest green campaign” explains Mircea Toma of Activewatch, a media monitoring agency, “the environmental NGOs opposing the project are actually in the minority. Romania’s scientists are against it as are the human rights, cultural heritage and justice reform NGOs.” The best known opponent is the Soros Foundation, which is suing the mining company on “access to public information” grounds (the annexes to the original 1995 contract are state secrets).

Gabriel Resources have one of the biggest advertising budgets in Romania and have carried out a superb PR campaign. Their website promises thousands of jobs, USD$ 19 billion “benefit to Romania” as well as investment in the environment, cultural heritage and to “act as a catalyst for sustainable community development.” The gold mining company have widespread support among local and national politicians (President Basescu is a fan) as well the Romanian media.

But opponents to the gold mine say that these promises to preserve the local environment are contradicted by the plan to create a 2,388 hectare open-cast mine and a reservoir containing an estimated 250 million tons of cyanide waste (held back by a 180 metre high concrete dam). They point out that Europe’s only cyanide-mines are small scale operations in Scandinavia where the ore is processed in sealed containers and that a cyanide leaching project on this scale has never been done in Europe.

Many of Romania’s Members of the European Parliament are opposed to the gold mining project. Notable among these naysayers are Daciana Sirbu MEP, wife of Romania’s new Prime Minister, Monica Macovei MEP, former Minister of Justice and Victor Bostinaru MEP, founder of NATO’s Atlantic Council in Romania and member of the ruling Social Democratic party. In 2010, the European Parliament issued a recommendation that “Calls on the [European] Commission to propose a complete ban on the use of cyanide mining technologies in the European Union”. The European Commission ignored the proposal.

Gabriel Resources say their operation will build “a best-practice modern mine implementing the highest environmental standards” and promise that the 150,000 tons of cyanide needed to process the ore will be handled safely. In order to ensure that the groundwater will not be contaminated, the company plan to line the reservoir with a 10 metre thick layer of clay.

But Victor Bostinaru MEP claims that the “cyanide-lake would need to be maintained for an eternity and the costs of this are unsustainable. The mining company have not said where they plan to locate such a massive quantity of clay, and geologists tell me there is no source within 150km of Rosia Montana.”

Opponents are also sceptical of the mining company’s pledge to generate billions of dollars in revenue for Romania. In a detailed study funded by the Soros Foundation in 2011, Daniel Bojin, a Romanian investigative journalist, describes the murky circumstances surrounding the Rosia Montana deal: the original agreement signed with the Romanian state in 1995 has gone missing, subsequent annexes to the agreement (reducing the state’s share from 40% to 19%) have been declared state secrets and the Russian magnate, tax on mining operations is less than 5% and Vitaly Machitski (controversial owner of Romania’s aluminum industry) is named as a potential buyer for the operation if approval is ever granted.

But Goliath isn’t finished yet. Gabriel Resources have shown remarkable staying power over the last 17 years and no Romanian government is likely to give a categorical refusal to an investment of this scale. And the miners also have a secret weapon – a draft Mining Law which would allow mining companies to expropriate private land “in the public interest” and bypass the onerous planning permission requirements. The bill is languishing in Romania’s Parliament and it remains to be seen whether the ruling Social Democratic party will maintain its hostility to the gold mine, or if it will succumb to the generous financial incentives that are available to politicians who support the project.