Romanian govt backs draft law for gold mine project

Wed Aug 28, 2013 8:40am EDT
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* Govt approves gold mine delayed for 14 years

* Romania gets bigger share, higher royalties

* Govt decision angers critics; parliament vote expected

BUCHAREST, Aug 28 (Reuters) - Romania's leftist government has approved a draft law enabling Canada's Gabriel Resources to open Europe's biggest open cast gold mine after securing a bigger stake in the project, drawing the ire of local people who oppose the mine.

The 14-year-old project has been in limbo for years, awaiting a key environmental permit, but Prime Minister Victor Ponta said last month the mine was an economic priority and sped up the process, with parliament now expected to vote on the draft law in September.

Gabriel controls the project through its local unit, Rosia Montana Gold Corporation (RMGC), in which the government also owns a stake that will rise to 25 percent by the time construction starts, from the current 20 percent.

RMGC will also pay a royalty tax on gold of 6 percent, compared to the 4 percent applied to other mineral resource projects, the government said on Tuesday. The mine aims to use cyanide to extract 314 tonnes of gold and 1,600 tonnes of silver among a cluster of villages known as Rosia Montana.

The government also said the draft law gives the project "special national interest", which will make it easier for RMGC to expropriate the few locals who oppose the project and who own land needed for the mine.

"We will make it so that parliamentarians across the country know what they are voting for and that their vote is not without consequences," Eugen David, head of anti-mine organisation Alburnus Maior said in a statement.   Continued...