David Agren
The Ottawa Citizen

Tuesday, August 24, 2004

A Canadian mining company that struck a rich vein of gold in Transylvania has encountered strong opposition from environmental groups and local residents who are organizing an MTV-sponsored concert to try to thwart the development of a giant open-pit mine.

Organizers expect 2,000 protesters and fans to converge on Rosia Montana, a mineral-rich, but impoverished corner of western Romania this weekend for a concert headlined by hip-hop and alternative rock acts and a march to oppose to the project.

The Rosia Montana Gold Corporation S.A. (RMGC), 80-per-cent owned by Gabriel Resources Ltd. of Toronto, is spearheading the project to tap one of Europe's richest lodes. Minvest S.A, a state-owned mining company, and three Romanian firms hold the remaining 20 per cent of the joint venture.

The company says the new mine will yield 10.6 million ounces of gold over a 16-year period, create 400 to 600 mining jobs in an area plagued with 60-per-cent unemployment, and will clean up the region's contaminated environment.

"It's basically a concert to promote the area as being something else," said Stefania Simion, a volunteer and spokeswoman for Alburnus Maior, a Romanian organization that opposes the Rosia Montana mine project.

Since it was proposed in the late 1990s, disenchanted residents and environmental groups have castigated the project, taking all avenues possible to impede its development.

"We have some legal action against the responsible authorities for their authorizations," Ms. Simion said, adding that her group intends to test the patience of "nervous investors" by delaying the project's approval and construction.

Romanians will go to the polls in November, and she expects concerns over the mine to top the campaign agenda.

"The (Romanian) public at large is against it," she said.

Her group contends the new construction would flatten two, 1,000-metre-high mountains, replacing them with four, 300-metre-deep "craters." It would also relocate more than 900 families to "Canadian-style" homes in newly developed communities.

The Romanian government has classified the region as a "disadvantaged area." Most residents awaiting relocation survive on subsistence farming.

Dubbed Europe's most prolific mining district, prospectors have extracted gold from Rosia Montana since Roman times. More recently, a state-run company has operated an open-pit mine, lowering one of the hills in the process. In a bid to join the European Union in 2007, the Romanian government must slash the mine's subsidies, which could force it to close.

The cumulative results of mining over two millennia have poisoned the local environment, something RMGC promises its project will remedy.

"This new mine, with new technologies, it will clean up the environment and invest a lot of money into there," said Simon Lawrence, vice president of corporate development at Gabriel Resources, adding his firm will invest $500 million in the project.

"It's not a pristine valley that people make it out to be," he said.

Rainfall collecting in hundreds of old mining tunnels leaches minerals from the rocks, acidifying the local rivers.

RMGC is waiting for its environmental permits to be approved. It expects to begin construction in 2006.