By Daniel McLaughlin in Budapest
Published: 12 December 2007
A plan to exploit Europe's biggest gold deposit by flattening part of Romania's oldest recorded village is foundering amid legal setbacks and growing support for a law that would ban the use of cyanide in mining.
Gabriel Resources, a Canadian firm, has already spent £150m in the Transylvanian village of Rosia Montana, buying houses and land that would be pulverised to get at 330 tonnes of gold and 1,600 tonnes of silver that lie beneath.
Gabriel pledges to clean up pollution from the existing Communist-era mine and bring 6,000 jobs and £1.25bn to Romania but the planned open-cast, cyanide-leaching mine has become the bête noire of the country's fledgling environmental movement.
Opponents say the village would become a ghetto, shaken by explosions, shrouded in choking dust, and trapped between the vast maw of the pit and a valley filled with cyanide waste that could leak into local rivers and groundwater. Roman gold mining galleries dating back 2,000 years would also be destroyed, they argue.
And with the support of prominent activists such as the actress Vanessa Redgrave – who was given a plot of land in Rosia Montana after denouncing Gabriel Resources at a Transylvanian film festival that it sponsored – campaigners against the mine are clearly winning the battle.
Gabriel announced this month that it was scaling back operations and cutting about two thirds of 325 jobs at Rosia Montana, after Romanian courts annulled a vital permit clearing the way for the mine's construction and suspended its environmental impact review.
The company, whose shares have plunged by about 70 per cent this year, vowed to fight both decisions but the entire scheme could soon be dead in the water if a bill to ban the use of cyanide in mining continues to gain momentum in parliament and becomes law.
"There is a big chance that our proposed plan to ban cyanide in gold and silver mining will pass parliament," said the sponsor of the bill, Senator Peter Eckstein-Kovacs. "We have secured government backing ... and many opposition deputies back it."
Mr Eckstein-Kovacs belongs to the ethnic-Hungarian party which is a member of the Bucharest government, and has rallied opposition to the Rosia Montana project in Hungary, where the Tisza river was devastated by a cyanide leak from a Romanian mine in 2000.
Gabriel says using cyanide is the only economically viable way to leach gold from rocks in which it is present in low concentrations but insists the mine would be operated to the highest international standards and pose a minuscule environmental risk.
If the anti-cyanide bill became law, however, it would force Gabriel back to the drawing board and test its resolve to continue operating in Rosia Montana.
"The bill is now under debate in parliamentary commission. If it passes, Gabriel will need to bring a total change to their technical project," said Romania's Environment Minister. Attila Korodi. He also warned the company to expect delays even if it managed to overturn the suspension of the mine's environmental impact assessment. "If the court rules that a previous certificate obtained by Gabriel is valid, we can go ahead with reviewing the project," he said. "Such an assessment can take several months."
The company insists that it will not be driven out, however. "We are a financially strong and secure company," said Richard Young, chief financial officer. "And we are prepared to ride this out ... and take the necessary measures, however difficult they may be, to ensure the company's long-term viability to permit and build a model mine at Rosia Montana."