ROSIA MONTANA – part IV

Risks

Economic and Social
The gold and silver ore exploitation in the area is due to about 17 years. As there is no plan to cover the period after, this means that after the time will pass unemployment will still be a problem in the area. So, the economic solution doesn’t cover a long period of time and only offers a short time proposition. Moreover the individuals will face with a destroyed environment, and without the possibility to gain economical resources from tourism. The unemployment problem is amplified by the presence in the area of a population from other places and settled during the business.

Judicial
An important aspect is the compatibility of the project with the European legislation. A study made by technocrats for the E.U. (P. Fischer and A. Lengauer – from the Institute of European Law in Vienna) concludes that the technology proposed in the Rosia Montana is not according to the Impact Evaluation over the Environment Rule (85/337/EEC, and the rule 2001/42/EC of the European Parliament), and the method of separating gold with cyanide is against the rule 80/68/EEC (17 December 1979) which refers to the protection of water. Also the resettlement measures that the government should employ against the individuals that live in the extended project area and refuse to sell the property, would break Article 8 of the European Convention of the Human Rights which already is available in Romania.
Another issue is linked to the percentages held in the business. At the moment Gabriel Resources Ltd. holds 80% of the shares and the Romanian state 20%. But according to the same European Convention the Romanian state should have 85% of the shares to respect the “public interest and economic profit of the country”.
Regarding the use of toxic substances the project does not respect the Berlin Convention (10 October 2001) regarding banning of the use of cyanide in mining exploitation on the territory of the European Union.

Technological Risks
The technology used is based on extracting the gold ore from the rock using sodium cyanide. This process is similar with the one in used in the mines from Baia Mare, which made the object of a process due to pollution. Moreover, worldwide after 1990 there were about 30 accidents in mines that used similar methods, but in less populated areas. Most of the incidents were due to deficiencies in the protecting walls (72%), about 14% of the situations were because leaks of the pipes, and 13% were due to accidents of transportation. Besides the cyanide, a threat is presented by the waste generated during the technological process which can severely pollute the surroundings and can not be neutralised. And neither the products used to neutralise the cyanide are not safe, as in large quantities, though less toxic still represent a problem.

Archaeological and tourist’s issues
The surface exploitation (in an open quarry) determines significant degradation of the land as it creates huge craters and amounts of sterile materials. This way the landscape is affected cancelling its tourist potential, eliminating its value over time of the area. The controlled explosions used (five times a week) might create vibrations which negatively affect the neighbouring areas, determining a possible collapse of buildings or archeologically researched galleries. The archaeological site, according to the partial investigations is considered to be unique in Europe, and its existence can be endangered by the mining excavations.

ROSIA MONTANA – part III

Briefly speaking the gains of the national economy are:
- The industrial valuation of a mineral resource located in an underdeveloped economic area;
- 250-500 new direct jobs (including foreign employees) as well as several new indirect job;
- Positive outsourcing: modernization of the transport infrastructure, social objectives, various additional activities;
- 2% royalties of the entire production paid to the state, that is USD 20 million;
- The land concession estimated to be USD 3 million;
- Over the entire exploitation period, the consolidated budget of the state receives about USD 300 million while the value of the deposit known so far is estimated to be over USD 3 billion.

According to different opinions I would point to different technical and economical aspects. The gold ore in the deposit, (1.4 g/t of ore, is very close to the profitability of the gold mining by the present technology that is 1.2 g/t of ore). Due to this, the Rosia Montana mine is permanently sensitive to the price fluctuation in the gold market, and it can be closed temporarily or permanently in case of unfavorable. Also after two successive updating of the feasibility studies (253 USD million the initial value and then 437 USD million the updated value) the cost of capital actually increased with about 180 USD million. This thing associated with other financial and ecological aspects caused in the last month a lower quotation at the Toronto Stock Exchange from 3.20 to 2.70 USD/share. Moreover Gabriel Resources applied for 100 USD million loan at the International Financial Corporation, but in October 2002 the same institution informed the company that they are not ready to finance the project due to the severe social and environmental problems that the project might cause. At present, the shares of the main shares holder in the Rosia Montana Gold Corporation are listed at the Toronto Stock Exchange.

The economic viability of the Project was researched in a study requested by the monitoring institutions. According to this, at an internal rate of return of 40 percent (and 44 percent by the improved study), the profitability limit is a little lower than a stock exchange price of 300 USD/gold ounce. The study also points to about 500 new jobs provided that in a excavation site that would reallocate at least 30 million tons of rock to be processed every year. According to the improved version of the study (27 February 2003) the processed rock production would be about 13 million tons meaning less possible jobs (250-300 people). As many foreign specialists would be included, the total number of jobs for the locals might be around 200 individuals.

The improvements in the Project have brought rise in the operation cost and capital expenses. On the stock exchange, it has caused that the investment become less attractive and more unlikely to be carried on. Among the reasons that have significantly influenced the quotation, there are the next ones:

a) the sodium cyanide management, is about a total amount of 250.000 tons. Moreover there is no technology or plants to remove the heavy metals (arsenium, uranium, nickel, and cadmium) from the waste sent to the settlement tank. The transportation by trucks of 250.000 tons of cyanide on the Romanian public roads is a hazardous one. In order to reduce the danger it is necessary to monitor each transport, to set clear rules. The neutralization of the residual cyanide through other means would raise the operation costs amount to 3 million USD/year, and the capital expenses would be increased by USD 9.1 million.

b) For the settlement lake, the following technological solutions should by financially evaluated:
- The protection of the settlement pond bottom with two plastic layers. The capital expenses increase by USD 8 to 10 million.
- The monitoring of the pool water infiltration into the ground (cyanide and heavy metal pollution). Although not included in the general project, such monitorisation that requires wells, channels, measurement and control instruments, etc. should receive financial support for the entire life of the lake.

c) The evaluation of the high risk cases.
The last version of the feasibility study seems not to deal with the high risk cases and risk management:
- Work accidents that, even small, may cause land sliding. The land sliding may cause higher water levels in the settlement pond and, under certain conditions; the cyanide containing water may flow into the surface waters in the area, that is an ecological catastrophe.
- The strong and frequent explosions in the area required by the current quarry operations. They may destabilize the ground weakened already by many unclosed galleries.

d) The cost of closing the mining operations:
According to the feasibility study, the above costs are estimated to be 19.53 million USD. For a similar mine in the USA, the cost was about USD 60 million. If such an underestimate is not clarified by the investment beneficiary, then it must be covered by the state budget. If the exploitation is to be closed before the stipulated term of 16.4 years due to the company’s possible bankruptcy, then the provisions set for the area rehabilitation should be used; but no mention of them is made in the feasibility study.

e) The waste stockpiles:
The feasibility study does not include comments on the acid-base balance of the waste material. Moreover, the waste stockpiles are not covered. Therefore, water and oxygen may easily penetrate the waste material and cause acid water and pollution that may alter the surface and underground waters.

ROSIA MONTANA – partea II

Zona afectata se numeste Albunus Maior si este localizata intre Abrud si Campeni. Conform Universitatii ”Le Mirail” din Toulouse in aceasta zona inca din Epoca Bronzului a fost un important site minier care a avut o importanta mare in perioada Romana si a carui activitate a continuat pana in Evul Mediu.

Din punct de vedere juridic aria in cauza este protejata printr-o ordonanta de unrgenta din anul 2000, iar apoi printr-un proiect numit ”Albunus Maior” al Ministerului Culturii.

In perioada in care s-au facut cercetari arheologice in zona, au fost descoperite locase de cult, cladiri specifice care demonstrau ca acele locuri erau locuite de o populatie a carei ocupatie principala o reprezenta mineritul. Cercetarile au fost facute de specialisti ai Universitatii ”Le Mirail” din Touluse. Acestia considera ca descoperirile nu fac decat sa marcheze un inceput, iar site-ul trebuie protejat.
Conform lui Al. Suceveanu (institutul arheologic ”V. Parvan”), site-ul arheologic se intinde pe 100 de hectare. Problema o reprezinta faptul ca terenul pe care se va intinde activitatea de extragere a aurului se intinde si asupra celor 100 de hectare ale site-ului arheologic.
In acest moment cea mai importanta zona a site-ului poarte numele de ”Galeriile” si au o importanta mondiala. Aici au fost descoperite vase de ceara datand din secolul XVIII si care necesita o atentie speciala. Aceste galerii sunt in pericol de prabusire chiar si in conditii normale, iar in contextul exploziilor ”controlate” necesare in procesul de extragere a aurului se vor prabusi. Echipa universitatii din Toulouse a cercetat aproximativ 70 de kilometri de galerii in Carnic, Cetate, Habad, Orlea, Tarina, Carpeni, iar cele mai importante din Orlea, Calina-Monulesti sunt cele mai expuse in cazul exploziilor.

Va continua ……

English

The affected zone is named Alburnus Maior, an is placed next to Abrud and Campeni. In the ancient times it was an important mining site which worked from the Bronze Age, according to the „Le Mirail” University from Toulouse. It had an important significance during the Roman Empire and was still in place during the Dark Ages and later. From another point of view the territory is important for the Romanian history as it was the starting place for the riot of 1784 and then an important recruiting place for the uprisings led by Avram Iancu during 1848-1849. From a legal point of view the area was already protected by a emergency ordinance in 2000 (of the Romanian government), and later on in 2001 by a project named „Alburnus Maior” started by the Romanian Culture Ministry. It is worth mentioning that Rosia Montana Gold Corporation invested in the archeological excavation site each year (1 billion in 2000, 31 billion in 2001, 43 billion in 2003), and also offered important amount of money to the resettled individuals. Actually it was this period of massive investments from the excavation company that made possible different archeological discoveries. Different settlements were found, worship places and specific buildings that proved that on that territory was inhabited by a mining orientating population since the Roman Empire. The researches were made by specialists from the French University „Le Mirail” of Toulouse. The same archeologists concluded that the new discoveries only mark a beginning and the site should be protected.

Also according to Al. Suceveanu (from the Archeology Institute „V. Parvan”) the whole archeological site should have about 100 hectares, from which about 10 hectares were selected as a start, out of which only 3 hectares were digged. The problem is that the mining excavation site extension project targets a part of 100 hectares of the archeological site. It is important to say that still the archeologist don’t actually know if the total surface is to be kept later on or not, but only suppose there might be discovered artifacts and so conclude that it has to be protected. Still such a research needs many years.

At the moment the most precious part of the archeological site are „The Galleries” duet o their significance worldwide. Here were discovered wax plates from the XVIII-th century, that demand a special attention. These galleries are in danger of collapse even in normal circumstances, and the (controlled) explosions needed in the process of mining for gold ore can put in danger their stability. The team from the University of Toulouse researched about 70 kilometers of the galleries in Carnic, Cetate, Habad, Orlea, Tarina, Carpeni. The most important are the ones from Orlea, Calina-Monulesti, which is place on special attention and are endangered by the explosions.

ROSIA MONTANA – partea I

Am vazut in ultimul timp la TV o campanie de publicitate in favoarea exploatarii din Rosia Montana in care se promit locuri de munca si protectia mediului.
Astfel, ca mi-am propus sa vad cat de adevarate sunt aceste afirmatii.

In continuare urmeaza o analiza a proiectului de extragere a aurului in zona Rosia Montana.

Deoarece textul este foarte lung am ales sa il impart in mai multe sectiuni.

ROSIA MONTANA – partea I

Proiectul ce priveste extragerea aurului din zona Rosia Montana este promovat de o societate canadiana (Rosia Montana Gold Corporation) cu participarea statului roman (20%).

Asocierea a inceput inca din 1997. Printre investitori se numara: Deva Gold, Euro Gold Corporation, Canadian Company Gabriel Resources, Rosia Montana Gold Corporation. Procentele detinute de fiecare participant difera, iar scopul activitatilor a fost largit in timp. In acest moment insa, Gabriel Resources Ltd detine majoritatea (80%).

Investitia ce urmeaza a fi facuta este de 400 milioane USD si se intinde pe o perioada de 15-16 ani. Se estimeaza ca ar fi extrase 300 tone de aur si 1600 tone de argint.

Investitorul doreste sa obtina 2120 hectare din satul Rosia Montana si 800 hectare din satul Bucium. Tipul de exploatare este unul ”la suprafata”. Acest lucru presupune stramutarea a aproximativ 2000 de indivizi, 800 locuinte, 8 biserici, 9 cimitire, scoli, site-uri arheologice.

Societatea Academica Romana estimeaza ca in urma exploatarilor vor fi produse peste 200 milioane tone de pamant steril si peste 220 tone de material steril, care ar trebui depozitate [undeva]. De asemenea este nevoie sa fie sapate cratere care sa poata fi umplute cu 180.000 tone de apa in vederea procesului de transformare a aurului.

Conform expertilor principalele probleme ce privesc mediul ar fi:
1) Pe o zona foarte intinsa vor fi taiati copaci lasand impresia de desert. Acest lucru va afecta ciclul natural, va modifica temperaturile, circuitul aerului, al apei, va intensifica eroziunea solului. Va determina modificarea debitului raurilor rezultand inundatii frecvente, caderea terenului. In cele din urma aceste lucruri vor modifica in sens negativ peisajul determinand astfel pierderea valorii turistice.

Mai mult decat atat va fi afectata baza economica a localnicilor (despre acest lucru voi discuta cu alta ocazie).

Modificarea mediului va afecta diferite plante si animale din zona, multe dintre ele fiind in pragul disparitiei.

2) Terenul dizlocat va genera caderi de pamant in zonele din jurul zonei de exploatare. Un astfel de scenariu s-a intamplat in Muntii Calimani. Pentru o astfel de situatie investitorii au propus construirea unui ”zid de protectie”, insa o astfel de masura si-a dovedit deja ineficienta in Muntii Retezat, unde datorita ploilor ”zidul de protectie” a cedat.

3) O alta problema ce tine de mediu este legata de infiltratiile in pamant, in ape subterane.
Procesul de izolare a aurului de restul materialelor este unul foarte lung (dureaza cateva luni) si nu poate fi intrerupt. Acest lucru face ca orice interventie de reparare a diferitelor brese sa devina imposibila.

4) Mediul inconjurator este afectat si in mod indirect. Fara obstacole naturale rata de degradare a terenului se va accelera. De asemenea vantul va purta praful de steril pe o zona mult mai larga decat cea destinata exploatarii. Exploziile ”contolate” care vor fi realizate vor fi facute pe un teren instabil, iar acest lucru va determina caderi de pamant si raspandirea de gaz asupra zonelor care depasesc zona de exploatare si ar trebui sa fie neafectate.

5) Tehnologia folosita este una bazata pe cianura, iar acest lucru este interzis in zonele in care se afla in apropiere populatie, asa cum este cazul in Rosia Montana.

Va continua ……

English

The project of gold ore extraction from Rosia Montana is promoted by a Canadian society (Rosia Montana Gold Corporation) with the participation of the Romanian state (20%). The association has begun in 1997, having multiple investors as Deva Gold, Euro Gold Corporation, Canadian Company Gabriel Resources, Rosia Montana Gold Corporation. The percentages held by the societies differed and the scope of activity was permanently enlarged, but now, Gabriel Resources Ltd. has the majority (80%). After some test-extraction Rosia Montana Gold Corporation concluded that in the area there are enough gold and silver ore reserves (1.56 gr. Gold/tone and 7.8 gr. Silver/tone) to make profitable an extension of the extraction site next to the settlements Rosia Montana, Corne and Bucium. The investment would consist of 400 million U.S. Dollars, and should take 15-16 years starting from late 2004, early 2005. I tis estimated to get about 300 tones of gold and 1600 tones of silver. Consequently, the company Rosia Montana Gold Corporation started to buy (offering good prices) land in the area from the locals and the Local Administration. After protests from different individuals the company held conferences (November 2002 and January 2003), where different experts were invited, to explain the technical aspects of the procedure, and the safeguards they took.

The society wanted 2120 hectares from the village Rosia Montana and 800 hectares from the village Bucium. Also the Society Rosia Montana Gold Corporation stated it will undertake a surface exploitation. This involved clearing all the area and move in other places about 2000 individuals, 800 living places (740 houses and 138 apartments), 8 churches, 9 cemeteries, schools, and archeological sites. So, basically about 3.000 hectares should be cleared in order to start the excavations. The Romanian Academic Society, refers to impact studies that consider, there will be produced about 200 million tones of sterile land, which must be deposited and 226 tones of sterile due to the process of technological transformation of the materials in the desired ore. Also there have to be created places to hold 180.000 tone of water for the process or ore transformation, and isolation of poisonous products for neutralization.

Taking into account the activities different experts consider the next main issues as affecting the environment:
· On a large area the trees will be cut down and will create the impression of a desert. This will affect the biochemical cycle modifying the temperatures, the circuit of air, of rain, will intensify the erosion process of the soil. It will also determine a modification of the flow of rivers which will determine frequent floods, land falling and consequently affecting the landscape and the turistic value of the region. Moreover is affected the economical basis of the locals, as they will be no longer able to use the woods or places to feed animals simply because those will not exist anymore. Also the modifications over the environment will affect different species of plants and animals in the area, most of the being at the moment rare or threatened with extinction. So, basically the area will be transformed in a sterile place.
· Due to the type of terrain the dislocated soil generates the danger to fall destroying the surrounding areas which are outside the excavation site destroying anything that encounter in the way. Such a scenario was encountered before in Calimani Mountains at another excavation site. For this situation the mining society gave a solution as they offered to build walls in order to strengthen the soil dump area. But this was replied with the situation in Retezat Mountains when the rain made possible for the river to destroy the protection walls. Even though this kind of scenario will not happen again the rain is still able to transfer the poisoned soil in the surrounding rivers, polluting the water.
· Next to this, another problem linked to polluting the environment, is linked to different leaks, due to infiltration of different chemical waste. The process of isolating gold from the rest of the materials is a long process that may take months and can not be interrupted; also it needs very large areas of land, which can not be acquired without eliminating the impediments. The long time of the process disables the possibility of intervention in case of different errors appears in the isolation walls. Another risk is the degree of poisonous substances in the air. This though the society estimated is under the limits accepted by the European law, still it supposes to persist over a long period of time enabling genetical modifications, heart diseases, or affect the nervous system. Different examples were presented to support the theory: Colorado (1990) and Southern Carolina (1992) in SUA, Papua Noua Guinee (1992), Guyana (1995), Ghana (1999). In Romania a similar situation happened in Baia Mare, on a much smaller area (6-8 hectares), which affected a large area, including parts of Hungary.
· The negative impact over the environment is also due to the indirect effects of the activities, which can affect the biological structures and the circulation of substances and energy. This will determine an increase in the temperatures, a decrease of the rains and an intensification of circulation of air in the area. The air will increase the rate of degradation of the environment in a zone without natural obstacles; also will be able to carry the sterile dust on a much larger area, affecting a territory much larger than the one supposed to be under the control of the excavation Society. Also the intentioned explosions in an unstable area determines the land to fall in an avalanche and increase the rate of spreading the nitrate and gas over what should be (according the project) unaffected settlements.
· Another problem is the type of technology used in the context of the existence of populated settlements nearby. The point here is that the cyanide based technology used by the Rosia Montana Gold Corporation for isolating the gold ore is forbidden when nearby settlements exists.