Why does Romania need the Roşia Montană gold mine?

Investment in mining would help stimulate the economy and create jobs. This is particularly the case in the Roşia Montană area, which also suffers from contamination from historical mining, poverty and a lack of basic infrastructure.The  Roşia Montană gold mine would:

  • create jobs for Romanians
  • provide direct and indirect investment to the country
  • help to safeguard the economic future of the Roşia Montană area
  • clean up the local environment, improving water quality and removing existing pollution
  • hugely improve local infrastructure by building access roads, bridges, electricity supply systems and communications systems

How much would Romania gain from gold mining at Roşia Montană?

Romania would receive 78% of the total benefits of the Roşia Montană gold mine, subject to a 2013 draft agreement yet to be finalized. This would come through:

  1. the Romanian State’s 25% ownership in the Roşia Montană mine, with the added benefit that Romania would not have to invest any money into the mine but will receive a quarter share of profits;
  2. a 6 percent royalty on sales of all gold and silver produced during the life of the mine;
  3. corporate and employee taxes; and
  4. job creation, through massive investment into the Romanian economy as Roşia Montană Gold Corporation (RMGC) and its suppliers buy goods and services in the country.

The Roşia Montană mine would contribute over $5.3 billion USD to the Romanian economy:

  • $2.3 billion USD – direct benefits for the Romanian State in the forms of dividends, salary taxes, royalties and other duties;
  • $3.0 billion USD – spent in Romania for human resources, electricity, transportation, construction, process reagents, spare parts and other related activities.

Overall the Roşia Montană mine has the potential to add more than $24 billion USD to Romania’s GDP over a three year construction period and sixteen year mine life. Perhaps more important still, the mine would be a standard bearer for a revitalised mining sector, highlighting that Romania is “open for business”, encouraging local and other overseas investors to seek opportunities in Romania and boosting growth in one of the poorest member states of the European Union.

The Company has already invested approximately $580 million USD in the Romanian economy to design and develop the mining project.

How many jobs would the mine at Roşia Montană generate?

The Roşia Montană gold mine is forecast to create over 3,600 jobs in an area where the majority of people are unemployed,  2,300 direct jobs during the mine construction phase, and 880 direct jobs during mining operations. Overall, the mine is forecast to generate more than 7,000 direct and indirect jobs in the region and a basis for sustainable economic development in the area.

Today Roşia Montană is classified as a ‘Disadvantaged Zone’ due to the high unemployment and low incomes in the region. The unemployment level in the Roşia Montană village is estimated to be more than 65 percent – a figure that would be much higher if it were not for the employment created by the hundreds of millions of dollars RMGC has already invested in the region.

Isn’t a 6 percent royalty too small? What are the royalties applied in other countries?

The Romanian Government has obtained an increase in the royalty for Roşia Montană from 2% to 4% in 2008, with legislation for further increase of 6% yet to be completed, of the value to be paid by RMGC, the operating company.  The royalty would be applied to the value of the mining output, irrespective of whether or not RMGC as the mining operator earns any profit.

This level of royalty would be the highest in Europe. Other countries have a much smaller level of royalties, for instance:

  • 0 percent in Sweden
  • 0 to 2  percent in Finland
  • 2  percent in Spain
  • 2.5  percent in Greece
  • 4 percent in Turkey and the United Kingdom
  • 2 to 5 percent in the United States of America
  • Russia is one of the only countries applying a 6  percent level of royalties.

The level of royalty in Romania, which would be a tax irrespective of profits of RMGC, would be among the highest in Europe and also high in a global comparison. None of Europe’s leading mining countries demands a free carried state participation in new mining ventures. On the contrary the governments in some countries, such as Finland and Sweden, support new mining projects with infrastructure investments and in other direct and indirect ways. The free carried share of the Romanian state in the Roşia Montană mine would be at a level higher than in most other countries around the world competing for global mining foreign direct investment.

What would the environmental impact be?

Mining in Roşia Montană would be conducted according to the toughest EU environmental and safety standards.

Some people have portrayed Roşia Montană as a beautiful unspoilt landscape that will be disturbed by mining. In fact, mining has already had a significant negative impact on the region’s environment.

The Roşia Montană mine creates an opportunity to rectify past damage, created by over 2000 years of mining in Rosia Montana. After mining operations have been completed, the environment would be fully rehabilitated and the region’s rivers will be cleaner than before.

Roşia Montană would be a modern model mine, designed to meet or exceed strict Romanian and EU legislation. EU-designated Best Available Techniques (BATs) will be used and internationally proven management practices for safe operation and environmental protection.

The Roşia Montană mine’s clean-up and restoration operation would:

  • restore water quality and ecology
  • remove pollutants originating from the site
  • remove high concentrations of various metals
  • treat current continuous acid rock discharge which is currently causing pollution in the regional water systems
  • produce significant benefits downstream.

Potential environmental benefits include:

  • Cleaner water: Large concentrations of heavy metals currently pollute the river system. Every second, over 20 litres of highly toxic waters flow from the galleries of the old mine into Roşia’s streams, which in turn travel downstream into the Abrudel River and on to the Arieş River, many kilometers away. The mining operation would clean up acid waters and help revive aquatic life.
  • More natural landscape: The former mine has left 100 hectares affected with 18 waste rock stockpiles and two major open pits, along with 140 km of underground mine workings which generate acid waters. RMGC would invest in redesigning 500 hectares of land. Three pits would be backfilled and re-vegetated and restored post-closure; one pit would be water-filled as per the environmental and legal obligations.
  • More biodiversity and wildlife: Biodiversity in the area is currently adversely affected due to past mining activities. The Roşia Montană mine would introduce biodiversity protection measures during the lifetime of its operation and initiate steps to include enhancing biodiversity on the site after mining operations have ceased.
  • Better quality soil: Currently the main soil contaminants are acid rock drainage and the 18 non-rehabilitated waste dumps from previous mining operations. The mining plan would take measures to restore soil quality whilst mitigating the impact on the soil during the operations.

Is it true that the Roşia Montană mine would result in the deforestation of many hectares of forest?

The development and operation of the mine would protect the environment, including the forests in and around Roşia Montană. In order to develop the mine, 255 hectares of trees in Roşia Montană would be felled. In exchange, the mining project provides for the planting of just over 1,000 hectares of forest before the mining operations even begins – 400 around the mine site and 600 outside the immediate mine area including designated biodiversity corridors.

How can we be sure that RMGC would rehabilitate the environment after the mining operations have been completed?

Modern mining means strict rules and procedures throughout all stages of the mine, including environmental rehabilitation.  The environment would be rehabilitated before, during, and after mining operations at Roşia Montană. From the very beginning, RMGC would deposit an environmental guarantee of $146 million USD for closure, environmental restoration and post-closure monitoring.

Annual updates would be established by independent experts and approved by the Ministry of Environment and the National Agency for Mineral Resources (ANRM), aiming at ensuring at any time, in the unlikely event that the mine is temporarily interrupted, that a sufficient Financial Guarantee for Environmental Restoration is in place, reflecting the costs associated with completing environmental restoration at that time.

Is it true that RMGC has polluted the environment at Roşia Montană?

RMGC has not carried out mining activities at Roşia Montană and has not polluted the environment. The current pollution in Roşia Montană is the effect of unregulated and underfunded legacy mining operations through past centuries and recent decades. The current acid waters and degraded environment are a consequence of these outdated past mining activities.

The Roşia Montană mine creates an opportunity to rectify past damage from historical mining.  History shows that mining operations in Roşia Montană have been carried out in various forms over the last 2000 years, and the mining methods used in the past have resulted in soil and water pollution with heavy metals and their compounds. In the Roşia Montană area, the waters are very acidic and have a red colour resulting from the high concentrations of dissolved heavy metals such as copper, iron, manganese etc.

Roşia Montană would be a model modern mine, designed to meet or exceed strict Romanian and EU standards and legislation. RMGC has established a detailed plan for the collection and treatment of toxic waters flowing from the abandoned mining galleries. Further measures would be taken to clean the water flowing into local streams so that it may support aquatic flora and fauna. From the very start the area would get incrementally cleaner as the mining operation conducts a detoxification over the entire lifespan of the mine, bringing river and soil pollution down to safe levels from their present-day toxic highs.

Why does the mine need to use cyanide?

Worldwide, 95  percent of the gold mining operations use cyanide technology, as would be the case for Roşia Montană where it is the most appropriate method due to the type of ore.

As gold is currently found in very small quantities in rock, mining companies need to use chemical substances to extract it from the ore. Cyanide is one of the few substances with the chemical properties required for gold extraction in safe and efficient conditions. After more than 100 years of cyanide use in the mining industry, experience, legislation, codes of practice and independent monitoring dictate how the safest management methods are to be properly implemented to transport, store, process and neutralize cyanide, so that the risks to the people and environment are minimized and carefully managed.

Today, there are no other viable alternatives with such a history of use and regulation that can be proven to be as safe, environmentally friendly and scaleable for application in the mining industry.

Amongst many other countries, mines from the USA, New Zealand, Canada, Finland, Spain and Sweden use this technology in their mining operations.  In a modern mining project, the quantity of cyanide which remains in the process tailings will be neutralized using a tested and efficient oxidation process. This process is currently used in more than 400 mineral processing facilities worldwide. After neutralization, the tailings with low cyanide content will be stored in a specially designed tailings management facility, where the cyanide concentration will be further reduced. Cyanide will naturally degrade when exposed to air and natural light.

Is cyanide as dangerous as people say?

In concentrated amounts, cyanide is harmful to people and other living organisms. In very small concentrations, as would be remaining after processing for the Roşia Montană mine, cyanide is not dangerous.

Approximately 90 percent of overall cyanide production is used in industries other than mining and is used to manufacture vitamins, jewellery, glue, computer electronics, fireproof insulation, cosmetics, nylon, dyes, medicines, and other products that we use every day.

Recycling of metals and minerals is effective only to a point, so exploration continues into less developed more remote, and sometimes more pristine areas within the world.  The goal is to apply best practices and state of the art technologies to allow mining to proceed in a manner that is worthy of the social license granted by the people. Through the well-established economic feasibility and environmental assessment process, marginal mineral deposits can be identified and eliminated from further consideration.  The environmental assessment process was designed to allow public scrutiny and debate of proposed mining projects in a civil manner to promote truth, trust and transparency. To simply state cyanide cannot be used safely is a falsehood, as it is and has been throughout the world for a century. Unfortunately, fear is often more marketable than knowledge.

The Roşia Montană mine would be designed to ensure the highest standards of safety, for both employees and the environment, in all activities related to cyanide. These activities include: transportation, storage, use and detoxification of cyanide, all undertaken in a “closed circuit” system.

There is an International Cyanide Management Code, requiring very strict obligations regarding the use of cyanide; RMGC is a signatory to this code and therefore undertakes to observe the internationally applicable obligations in respect of cyanide management.

In Roşia Montană, the average tailing management facility (TMF) concentration would be significantly lower by than the limits established by EU/Romanian legislation (10 ppm).  This would reduce in a limited period of time to an undetectable level as air and sunlight break any remaining cyanide content down completely.  To put this in perspective, one cup of coffee contains approximately 7 mg/l of cyanide, respectively twice the quantity per litre in Roşia Montană.

What are the European Union (EU) standards on cyanide technology?

The mine will be constructed and operate under the most stringent safety regulations in the world, imposed by European Union law and will be subject to independent monitoring.  The EU standards on cyanide technology provide that its concentration at the end of the technological process (ie. discharge to a tailings management facility [TMF]) does not exceed 10mg/l).

At Roşia Montană, the cyanide concentration would fall to a level much lower than required by the EU Mine Waste Directive. Once in the TMF the cyanide level would reduce to a level that can no longer be detected due to natural breakdown of cyanide in contact with air and sunlight, leaving a harmless area that can be reclaimed during and after the mining operation.

To put this in context, the current design of the mine has a concentration almost one tenth of the standard accepted in the USA and most other non-EU countries.

The tailings management facility (TMF) that would be created at the Roşia Montană mine seems very big, even bigger than the Vidraru reservoir. What would happen if the dam breaks down?

The mine’s TMF has been designed with increased safety and capacity to store extreme rainfall events. An unusually large additional storage capacity, in addition to other design parameters of the TMF, makes the dam system 100 times safer than most of the tailings dams in the world. The TMF 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 1 in one million years.

Roşia Montană has a history of 2,000 years. Is it true that once the mining operations start the heritage buildings from the area will be destroyed?

The heritage buildings from the area will not be destroyed. Not only would the Roşia Montană gold mine actively create growth, jobs and a strong economy, but RMGC would also save essential historical sites such as Roman mines and mediaeval buildings that are being degraded by time and have been destroyed by neglect. The preservation work would ensure that these aspects of our shared history and culture are saved for our children to enjoy, and would give people a reason to visit and put money into the local economy – something of which every Romanian can be justly proud.

RMGC has already invested hundreds of millions of dollars in areas such as archaeological research and protection, restoring historic buildings, improving housing and constructing community buildings.

To date, RMGC has invested over $30 million USD in the research and valorisation of the cultural patrimony from Roşia Montană.

The mining project includes a detailed plan for the protection, preservation, and restoration of the heritage in the area, which has been ongoing for the last decade. RMGC is committed to explore the vestiges of the ancient settlements from Roşia Montană through a complex heritage protection and preservation program.

The program would ensure that valuable historical relics in the area are uncovered, restored, and preserved and that the landscape and environment are remediated for the appreciation of this history and culture and for the advancement of tourism both during and after mining operations.

So far, the investment made by RMGC has been used to carefully excavate and preserve 2 miles of Roman galleries under the historical centre of Roşia Montană. It has also been used to build a museum in the historic town centre of Roşia Montană to honour the mining culture and heritage of the area. In addition, RMGC has restored old civic buildings (a school and a town hall) and is also working to preserve and restore over 300 houses in the historical centre of Roşia Montană.

The cultural heritage protection program proposed by RMGC (both above and under-ground) has been audited by the Oxford Archaeology Unit (Great Britain). They found that the archaeological works carried out here go beyond legal requirements and best practices in terms of quality.

How would the Roşia Montană mine affect the people who currently live in the area?

Of the 16 villages within the Roşia Montană area, four would be directly affected by the operation of the mine, with the centre of Roşia Montană remaining a protected zone.

RMGC has purchased residential properties offering both (i) relocation and (ii) resettlement options for purchasing a new house in one of two resettlement locations: one is situated in Recea (Alba Iulia), and the other is planned as a new community in the Roşia Montană area. At Recea, the entire infrastructure was completed in December 2008 and 124 of the 125 homes have now been occupied for over two years, providing access to employment opportunities and higher living standards and healthcare than previously available.

All the relocation and resettlement packages have been developed by RMGC after extensive consultation with the community and with Romanian specialists in valuing residential, farm and forest lands, and structures, in order to offer villagers new land packages as well as monetary compensation, all within the guidelines for relocation and resettlement set out by the International Finance Corporation, part of the World Bank.

RMGC retains an ongoing presence and close dialogue with the Recea residents to assist in ongoing social needs and integration in the wider community. RMGC has also provided special assistance to resettled and relocated families, and vulnerable individuals or families who live in the impact area but who do not own properties.

What would happen once mining is complete?

The Roşia Montană mine promises to play a pioneering part in the revival of Romania’s mining sector.  In the long term the sector would continue to create jobs, support local businesses, transfer technology and skills, and support new supply chains.  

After 20 years of modern mining, our vision is that the Roşia Montană region would be clean, biodiverse and have the infrastructure it needs to prosper and grow.

Cultural tourism initiatives are possible at Roşia Montană – but only after a serious clean-up of the environment and following considerable investments in infrastructure for the long term. RMGC has already taken a step in this direction in order to foster investments and encourage those activities which would contribute to the future employment and sustainability of the area, as well as the development of tourism.

Do Romanians Support the Roşia Montană mine?

Of those that voted in a December 2012 local referendum, over 78 percent of people living in Roşia Montană and 62 percent of those living in the larger surrounding area support the Project.  Local people see an opportunity for economic and community development, which they regard as absolutely essential for their community’s survival.

A recent nationwide survey conducted by CSCI showed that two thirds of Romanians agree that Romania needs mining investment in order to create jobs for the unemployed.