THE BLOG
01/11/2013 10:56 GMT | Updated 31/12/2013 05:12 GMT

Rosia Montana: Will a Vocal Minority Deny Romania its Right to Huge Benefits?

Lively debate on the subject of the Rosia Montana gold project continues - some of which is informed and possesses a basis in fact, and some of which does not (as was highlighted in my recent Huffington Post article "Debate is Good").

The fact remains that the project has numerous tangible benefits and is able to directly address several issues not only in the area where the project is located but in Romania as a whole; however some of its opponents seem intent on disregarding these, without presenting any real alternatives to real issues.

It is not for me to suggest that Rosia Montana holds the only solution to Romania's problems; nor that it is the only project with the capacity to boost Romania's economy; nor that it will single-handedly solve the area's unemployment. However Rosia Montana is one possible solution to so many of these problems and therefore deserves, at the very least, proper consideration.

In our world, in Romania and more specifically in Rosia Montana, there are some undeniable truths. These exist, whether you are in favour of mining or against it, and should constitute the basis of any informed argument.

People need jobs

Romania's poverty rate is still among the highest in the EU - the fact is that Romanians need jobs. Unemployment in Rosia Montana stands at over 65%, a figure that would be much higher if it were not for the employment created by the hundreds of millions of dollars already invested by Rosia Montana Gold Corporation (RMGC).

Mining operations in Rosia Montana will create some 7,000 direct and indirect jobs during its construction phase and around 3,600 direct and indirect jobs during its operational phase. Most of these jobs will be in the immediate vicinity of the mine and will be given to Romanians.

A new and modern mining industry in Romania is a practical means of providing thousands of jobs for a very skilled and competent labour force. There has been much press speculation on emigration and the subsequent flight of labour from Romania, particularly when EU barriers are lifted at the beginning of 2014, but what has been done to ensure against this? Clearly any meaningful lowering of national unemployment needs to be part of a wider government strategy, but can we afford to dismiss an opportunity to instigate this process?

Foreign direct investment generates economic growth

It is commonly accepted that foreign direct investment (FDI) generates economic growth in its recipient countries through the creation of jobs, the advancement of skillsets, the transfer of technology and the encouragement of a competitive market.

Romania needs the economic growth offered by FDI. We need to stimulate industry and one of the ways to do this is to encourage foreign investment. In a recent article, one of Europe's leading businessmen, Sir Martin Sorrell, identified Romania as a particular success story within Central and Eastern Europe, a region in which WPP, the world's largest marketing communications group, sees significant growth. Should we encourage global companies, such as WPP, to operate in Romania or should we close our doors to the opportunities they provide?

Rosia Montana is just one of many projects which could bring significant economic growth to our country, with 78% of the direct benefits from the mine being received by Romania. Overall, the mine is forecast to generate over $24 billion for the Romanian economy (at an assumed gold price of $1,200/oz) and to have a real and sizable positive impact of the country's GDP. It is well known that economic growth in Romania is weakening so can we afford to dismiss foreign investment that has the capacity to stimulate this?

Rosia Montana (and Romania as a whole) has a rich mining heritage

Romania has a long tradition of mining which dates back thousands of years and it is generally accepted that we should protect this heritage. Should we not argue, however, that it is also right to continue this mining tradition? Unquestionably we must do so by adhering to the strictest environmental standards, but why let go of a tradition which has been the lifeline of so many in the past and could be again in future?

The question to ask when considering Rosia Montana's mining heritage is not whether it is worth protecting and preserving but rather who is capable of doing this, or perhaps, more specifically, who is currently doing this? There is evidence of Roman mining across many sites in Romania and other parts of the Roman Empire; however what is currently being done to preserve and exhibit these workings? Rosia Montana is only unique on account of the significant amount of money that a private enterprise, RMGC, has spent on cultural heritage activities.

In the case of the Roman galleries at Rosia Montana, David Jennings, an archaeologist with more than 25 years' experience of development-led archaeology at an international level, explains that the opportunity to explore the ancient mine workings in Rosia Montana "has only been possible because of the investment of RMGC and should be seen as an immense contribution towards the advancement of scientific understanding." Archaeological work of this kind requires significant investment. RMGC has committed and will continue to commit this investment. Furthermore, Jennings' overall conclusion, following examination of the project in the context of international best practice, was that the project has been executed in a professional manner and it attains standards of practice that are at least comparable with those undertaken on other major European projects. He further states "In a number of areas it is performing well beyond the normal expectations of developer-funded projects."

Rosia Montana is polluted by decades of unregulated mining

Rightly there is much debate on the environmental impact of mining in Rosia Montana; however the differentiation should always be made between the impact of historical mining on the region and the impact of future, modern mining on the region. There is a common misconception that Rosia Montana is a pristine wilderness which will be destroyed by mining. This is simply not true. Those who have visited Rosia Montana will testify to the pollution, environmental degradation and industrial wasteland left by historical, unregulated mining activities - I live here, I should know.

Every second a hundred litres of highly acidic, red water flow into the streams of Rosia Montana - toxic water with dangerously high levels of arsenic, iron and zinc. What are the viable options for solving this and, more importantly, who will pay? The Romanian Minister of Environment has stated that the cost to Romania should the project not go ahead could be more than €300 million.

RMGC has already invested over $10 million to tackle the immediate pollution problems and has committed over $150 million for rehabilitation efforts post-mining.

In a recent blog post on his website, Struan Stevenson, President of the European Parliament's Intergroup on Climate Change, Biodiversity & Sustainable Development, argues that regulated economic development can "maintain and even enhance biodiversity" and he highlights several of the key benefits of the Rosia Montana project and its commitments to corporate responsibility as examples of this. Mr Stevenson, MEP, notes that "RMGC wish to ensure that their project will have a minimum impact on biodiversity during the construction phase and will actually produce a net-enhancement of biodiversity during the mine's rehabilitation process."

No one would suggest that the Rosia Montana project is the only means of resolving Romania's national and regional issues. However it presents a number of viable solutions that deserve to be considered seriously. Rosia Montana has the potential to be a standard bearer for a revitalised mining sector, attracting local and overseas investment into Romania, and boost the Romanian economy - all while maintaining the highest environmental standards, with a sustainable future for Rosia Montana. The question is can we afford to ignore its potential?