Gold exploitation to start in November 2016.
The Cabinet passed late on Tuesday the bill for the mining of the gold and silver ores in the Rosia Montana perimeter, a document that will be next referred to Parliament, the government informed according to Agerpres. The text adopted by the Cabinet also provides that the project shall be declared to be of public interest and of particular national interest, and that public entities shall be mandated to carry out specific measures required for the exploitation of the gold and silver ores. Gold exploitation at Rosia Montana, is expected to begin in November 2016, as the area’s urban plan should be approved by end-2013.
The bill provides the approval of an agreement under which the majority shareholder in Rosia Montana Gold Corporation (RMGC) will transfer in stages, for free, 5.69 percent of the RMGC share capital to the minority shareholder controlled by the Romanian state. The indirect participation of the Romanian state will thus reach 25 percent. A 6 percent mining royalty will be charged on the project (compared to 4 percent for other mining undertakings) with an option for the Romanian state to require the payment thereof in kind. Also, the investor undertakes to preserve, develop and revitalize the cultural heritage, protect the environment and eliminate historical pollution, contribute to the sustainable economic and cultural development of the community of Rosia Montana.
According to the business plan of the majority shareholder, the implementation and unfolding of the gold and silver ore mining project will create 2,300 jobs in the construction phase and 900 jobs in the operation phase.
In a first phase, a quota of 3.6858 percent of the shares will be transferred, resulting a state participation of 23 percent, but with the obligation that the environment accord on the implementation of the project is issued and approved through government decision and does not include significant modifications compared to the project presented and proposed through report and feasibility studies, and the draft law that approves the mining gets adopted.
In a second phase, a supplementary quota of 2 percent of the shares will be transferred to the state, on condition that all licenses for the beginning of mining operations are issued without significant delay as against the terms provided by the licensing calendar, and the draft law which approves the mining is in force and produces effects.
Benefits for Romania
Regarding the benefits for the Romanian state, the two sides estimate that the Rosia Montana project will generate incomes to the state budget and local budgets worth approximately USD 2.3 bln and a direct effect in the Romanian economy of approximately
USD 2.9 bln, at a reference price of USD 1,200 /ounce (treasury ingots), the total direct economic benefits of the project for Romania being estimated to more than USD 5.2 bln, in the conditions of maintaining the relevant parameters of the incident fiscal legislation in Romania, of the price of gold, of the costs of works, services and products necessary for the mining operations, and of the provisions of the business plan of RMGC publicly assumed in compliance with the regulations of the capital market.
Possible investments in food industry
RMGC might commit itself to achieving three agri-food objectives in the Alba County, respectively a slaughterhouse and a meat processing factory, a dairy and an acquisition and processing centre for forest fruits, bursa.ro informs. The prefect of the county, Gheorghe Feneser, sent a request to Agriculture minister Daniel Constantin to provide through the licenses and authorisations issued for the Canadian company the obligation of becoming involved in these three units. ”(…) In the talks we held at Rosia Montana, they showed their interest for such investments, saying that a large quantity of products processed there will be bought by RMGC employees and by the accommodation units which the company will open in the region,” the Alba prefect said.
The three investments might be worth some EUR 6-7 M in total, besides those made in the mining sector. RMGC officials did not want to elaborate on the talks held with the Romanian state, but mentioned that the company will do everything assumed during negotiations. They added that they also consider other investments, besides mining.