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Catalin Hosu

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Rosia Montana Gold Project: Debate Is Good

Posted: 10/10/2013 00:00

People have legitimate concerns about big industrial projects and these concerns need to be aired publicly and vigorously.

But the arguments over the Rosia Montana gold mine project in Romania have become strident, aggressive and badly misinformed.

The big losers if Rosia Montana were to be blocked would be the Romanian people themselves. Which is why those who have the facts are in favour of it - here are a few.

Firstly, cyanide has become a key theme of negative comment among agitators.

However the use of cyanide in gold mining is routine: over 95% of the world's gold production uses it, as will the mining at Rosia Montana. The question is not whether cyanide is used or not, but whether we can provide adequate safeguards.

We can and we do. Rosia Montana will - quite rightly - be constructed and operate under the most stringent safety regulations in the world, imposed by European Union law.

Critics point to the infamous Baia Mare disaster in Romania thirteen years ago, when a tailings dam burst and released toxic waste, including heavy metals and cyanide at a concentration of around 400mg/l, into a network of rivers.

But Baia Mare was in operation many years before Romania came under the strict EU regulatory regime. It had a defective design, was badly run, poorly policed and suffered a lack of contingency planning or risk mitigation. It is inconceivable that such an accident could happen at Rosia Montana, where the design has been risk assessed by international experts against natural disasters including earthquake and severe flooding, concluding that the probability of a dam breach is one chance in one million years. Even then, the cyanide concentration in the tailings pond will be less than 5mg/l - half the level allowed by the EU, twenty times lower than Baia Mare - and this will reduce through natural degradation in sunlight. Additionally the design incorporates contingency plans in the unlikely event of any accident.

It is possible to ban mine operations which use cyanide. A tiny handful of states and provinces globally have done so. But despite some wild claims in the media, there is no viable industrial scale alternative.

To ban cyanide means to ban the majority of gold mining. Is this what the protestors want? If so they should be aware that gold is an important industrial commodity, which has critical application in medicine, dentistry, aerospace, computers and telephony.

Secondly, employment.

Gold has been mined in the Rosia Montana area for two millennia. Accession to the EU, with its new regulations, closed down scores of mines in Romania and wiped out mining in this region. The area is now seriously disadvantaged, with unemployment running at well over 60%, significantly reduced by the high employment created by the hundreds of millions of dollars already invested by Rosia Montana Gold Corporation (RMGC).

When the project is given the final go-ahead the construction phase will create some 2300 jobs. On average, about 900 will be employed on the day-to-day running of the mine during its 16-year life, and thousands more will find work in supplier companies and service industries. New schools, roads, communications and utilities will be built. RMGC is already working to bring the area's heritage to life and building a new cultural centre which will boost tourism. A sustainable development plan has been devised that will allow the community to plan for the future success of the region long after mining has ended.

It's no surprise that local people and labour organisations in Romania overwhelmingly support the project - another point which is rarely reported.

Thirdly, the environment.

The protests over environmental issues at Rosia Montana are among the most puzzling. It is quite wrong to present Rosia Montana as a pristine wilderness. The area today is a wasteland of abandoned pits, non-rehabilitated waste dumps, acid rock drainage, rusting machinery and derelict buildings - the legacy of disastrous mining practices of the past. From the commencement of operations RMGC will launch a vigorous clean-up, bringing river and soil pollution down to safe levels from their present-day toxic highs. The area will get incrementally cleaner as the mine progresses.

So, far from ruining the environment, by the end of the remediation process the site and surrounding lands will be restored to a state of natural beauty which no inhabitant of Rosia Montana has seen for a hundred years. This is a commitment RMGC must keep to by international law, and must fund and implement the remediation program progressively at every stage of development.

Finally, the economy.

Romania is not required to invest any money into the project but will own 25% of it, receiving a quarter share of profits and a 6% royalty on sales of all gold and silver produced. Besides corporate and employee taxes, billions more will be pumped into the Romanian economy as RMGC and its suppliers buy goods and services. Over three-quarters of the project's total revenues will find their way into the public purse of Romania.

Perhaps more important still, the project will be a standard bearer for a revitalised mining sector, demonstrating that there is no "trade-off" between economic gain and strict environmental compliance, whilst highlighting that Romania is "open for business", encouraging other overseas investors to seek opportunities in Romania and boosting GDP in one of the EU's poorest member states.

Given all these advantages, it's a little hard to see how RMGC is cast as the villain in some media reports.

It is worth asking whether the protests, never as large as they have been reported, really do represent any significant body of public opinion in Romania. Recent polls suggest this is not the case. Or perhaps the protests are inflamed at least in part by professional agitators, often from overseas and well-funded from undeclared sources, pushing their own broad anti-free market agendas.

And if that is true, should they be allowed to hijack a debate with such profound consequences for the Romanian people?

 

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