September 4, 2013 3:51 pm
Updated: September 4, 2013 9:22 pm

Romanians protest Canadian-owned gold mining operation

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VANCOUVER – Protesters have taken to the streets of Romania’s capital in opposition to the government’s initial approval of a significant, Canadian-owned gold and silver mining operation in Transylvania.

Demonstrators have rallied in Bucharest for the past three days, after the government gave its approval last week of draft legislation that would move the Rosia Montana Gold Corp. project forward.

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Whitehorse, Yukon and London, England-based Gabriel Resources is the parent company of Rosia Montana Gold Corp. in a partnership with the Romanian government. The TSX-listed company owns a 75 per cent share in the proposed open-pit mining project, while Romania holds a 25 per cent stake.

The demonstrations have reportedly prompted Romanian President Traian Basescu to say he might hold a national referendum on the project in 2014, coinciding with federal elections.

“If the law passes through parliament and it continues to cause a rift in the society, I will certainly not sign it before holding a referendum,” Basescu said in a press conference, EU Observer reported.

But Gabriel Resources president and CEO John Henry said there has already been one local referendum, in Alba County, that resulted in two-thirds of participants saying they were in favour of the mining project.

So for him, talk of a referendum is “slightly old news.”

He told Global News, in a phone interview from London, a recent opinion poll also showed 73 per cent of Romanians approved of the mining operation.

“We appear to have a similar majority in the poll as we did in the December referendum,” he said, adding that 1,000 to 2,000 people taking to the streets in Bucharest wouldn’t be able to sway public opinion.

He said the company is hopeful the legislation will be approved by this November and Rosia Montana’s first gold pour will happen by November 2016.

As for the protests, Henry said Romania is a “young democracy” and it’s the right of the people to voice their opposition and for politics to play out.

At issue for the protesters is the use of cyanide, which is widely used in gold extraction projects around the world.

The country suffered a major environmental disaster in 2000, when approximately 100,000 cubic metres of cyanide-laced water spilled over a dam at the Baia Mare mine, in the northwest town of Oradea.

An estimated 100 tonnes of the toxic compound spilled into the Somes river before winding up in Hungary’s Tisza River and in then into the Danube river, flowing through parts of Hungary and the former Yugoslavia (now Serbia).

A UN Environment Programme investigation into the spill reported the overflow was “caused by a combination of factors including weaknesses in design.”

The spill was blamed for killing huge amounts of fish and wildlife, The Canadian Press reported.

Jamie Kneen, spokesperson for Mining Watch Canada, said the ore that would be mined from the Rosia Montana mine would be of a lower grade, which requires a cyanide solution to be sprayed on it in order to extract the gold particles.

“As a result there is a lot of potential for leakage from the processing itself, as well from a spill from the holding ponds,” Kneen said.

“The industry take on it is that because cyanide is broken down by sunlight, it’s harmless as soon as it gets out… but it doesn’t actually work that way,” he said from Ottawa. “If the water is muddy or if it’s in the groundwater then it doesn’t get broken down by sunlight and it remains as poisonous as ever.”

As examples of the risk this kind of mining poses, Kneen pointed to a 1995 incident at a Canadian-owned mine in Guyana, where more than 1.2 billion litres of cyanide solution spilled into the Essequibo River, and a 1998 spill at another Canadian-owned mine in Kyrgyzstan that reportedly sickened 600 people.

Costa Rica banned the use of cyanide in open-pit mining in 2010 – the first country in Latin America to do so.

Greenpeace has also protested the proposed mining development, which Rosia Montana Gold Corp. has been trying to start up since 1997.

At a protest last year, marking the 12th anniversary of the Baia Mare spill, around 30 protesters reportedly stormed the office of Romania’s environment minister. Other Greenpeace protesters in Hungary placed a coffin filled with dead fish in front of the Romanian embassy in Budapest.

Greenpeace was unavailable for comment on Wednesday.

Henry said this will not only be Europe’s largest gold mining project, it will be the most modern.

He acknowledged the mining industry in Rosia Montana is more than 2,000 years old. The industry in the area was largely unregulated for more than four decades until the government shut the industry down in 2006, he added.

But, he said that was before Romania joined the European Union and the country had to meet stricter standards.

Henry said Rosia Montana and areas up to 40 kilometres downstream have suffered from pollution because of past unregulated mining operations.

“Actually, our project cleans up that mess,” he said.

According to the Gabriel Resources website the company plans to redesign 500 hectares of land and treat “the existing contamination and main pollution source.”

“Go to Rosia Montana. Have a look at what the company is doing,” Henry said. “It’s a decaying area with high unemployment.”

He said the mine, which is expected to have a 16-year life, would employ “in excess of 3,000 people during construction,” and about 1,000 jobs while it’s in operation.

Kneen said the intentions may be good, but he said mining companies don’t tend to stick around once the operations wrap up.

“Anything that’s not rehabilitated at the outset or while the mine is operating is left for the community to look after [and] the local government,” he said.

In some cases, he added, the volatility of the markets sometimes leads to mining companies going bankrupt or pulling out of the project before it’s finished.

“It’s hard to have a whole lot of confidence in that,” Kneen said.

*With files from The Canadian Press, Bloomberg News and Reuters

© 2013 Shaw Media

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