Dirty Gold Crisis Has Europe Clamoring to Mine
Part 2: A Long-Term Sentence to Poverty
At the end of 2011, the original contract signed between the government and Gabriel resources, until then a state secret, was leaked online. It showed that the state would get just 2.2 percent of the royalties from the mine. According to calculations done by the Academy of Economic Studies in Bucharest, after the environmental cleanup costs and the repayment of loans taken out by Minivest from Gabriel Resources' purse, the project would generate nowhere near the $4 billion claimed by RMGC, but instead bring "nothing to the region but a long term sentence to poverty."
One month later, protesters in Bucharest took to the streets in Romania's biggest uprising since the revolution. Mostly they demonstrated against austerity measures which, since the country's 20 billion IMF bailout in 2009, had seen half the country's schools and hospitals merged, taxes hiked and state wages, benefits and pensions cut by up to 25 percent. But they also opposed the offered solution. A month before, President Basescu had declared that Romania's way out of its financial problems lay in the creation of jobs through the opening of mines, especially Rosia Montana.
But the people viewed the mine as yet "another symbol of Romania selling out its economic interests for individual gain," says Bostinaru. "We need sustainable development to rebuild Romania's economy and, as it stands, Rosia Montana in no way offers that solution." The leader of the opposition, Victor Ponta, seized on the popular discontent and condemned the Rosia Montana project and the government that supported it, calling for an end to "the alienation of Romania's natural resources" and a move to more long-term development.
Government Support Returns
Since that time, Ponta's government came to power in a landslide election, unemployment levels have stayed stagnant, and the Rosia Montana mining project has regained its governmental support. Following Ponta's warning that "controversial decisions" will be made about the mine this year, a new incarnation of Minivest was announced on Friday, called Minivest Rosia Montana. Created solely for the purpose of the mining project, it is the first definite sign that the government plans to move ahead with the project since the elections. Meanwhile, RMGC have started the demolition of Rosia Montana in preparation.
Whichever way the mine goes, its implications will reach far beyond Romania. If it goes ahead as suggested, it is feared that its example will lower the bar on environmental standards across the board. Even for the gold industry this could be bad in the long run. Scandinavian companies have expressed fears that it will prompt opposition against cyanide mining across the continent and could ultimately lead to an EU ban, forcing gold mining backwards in terms of efficiency and profit.
If the mine is stopped, it will be an environmental victory against all the odds. With an increasing number of groups across Europe fighting similar battles against mining giants, the Romanian example would set a precedent for what can be achieved even with the most limited of means.
Its that prospect that has kept Victor Bostinaru fighting through the years. "This is a pioneering project. If we don't stop it, who knows what it will mean for the future of gold mining in Europe."
- Part 1: Crisis Has Europe Clamoring to Mine
- Part 2: A Long-Term Sentence to Poverty