26 June, 2019

Romania renews license for controversial gold mining projects, sets higher royalties

Rosia Montană Gold Corporation (RMGC), the developer of the gold mining project at Roşia Montană, in western Romania, obtained from the country’s mineral resources agency ANRM an addendum to the concession license for the gold exploitation.

The document extends the validity of the license for another five years and increases the fee charged by the state on the value of the mining production from 4% to 6%. Canadian company Gabriel Resources, which owns 80% in RMGC, made the announcement and stated that it didn’t agree with the agency’s decision to increase royalties for the project, Profit.roreported. The Romanian state also owns 20% of the project.

Romania initially granted RMCG the license for this project 20 years ago, in 1999. The license was due to expire on June 21 this year. The project has been blocked, however, due to environmental issues and RMCG hasn’t extracted any gold from Rosia Montana. Thus, the state hasn’t received any royalties either.

Gabriel Resources filed a lawsuit against the Romanian state at the World Bank’s center for dispute settlements – ICSID in Washington, asking for compensations of nearly USD 4.8 billion from Romania for blocking of the project. The Canadian company has invested some USD 760 million in the project, but its claim for compensations is based on the lost market value of the company since 2011 when its shares were trading close to their peak.

Source: romania-insider. com