Why mining in Rosia Montana will be a pillar of sustainable development in Romania

Written by Catalin Hosu

A recent article by Raluca Besliu, published in the Politics in Spires blog, is typical of the misinformation and misinterpretations being put forward by activists campaigning against the Roşia Montană gold mining project. There is little that is either true or accurate in that article.

1. Roşia Montană will provide net economic, social and environmental benefit

First of all, if implementation of the Lisbon precautionary principle required policy that “cannot harm the public or environment” then no roads would ever be built, no buildings would ever be put up again, no vaccination policies would ever be implemented for fear of the occasional side effects and, arguably, people would never again be allowed to drive a car as it causes harm to the environment nor use a computer or cell phone as they all contain mined minerals. The appropriate precautionary principle test is one of net benefit and whether, overall, a policy is in the public interest. There is no doubt that the proposed Roşia Montană project fulfills these criteria. The project will bring net economic, social and environmental benefits both to the local area and to Romania in general. The local area is currently an environmental disgrace. It is the site of abandoned communist era mining operations that scar the landscape and leach millions of litres of toxic effluent into local waterways every single day.  The local rivers run bright red. The proposed operation will clean up the local waters and provide for full remediation of the whole area, without which this critical work is estimated to cost hundreds of millions of dollars. No party has stepped forward to provide an alternative source of funds or a plan to clean up the region.

2. A route to sustainable development

Without ‘development’ there can be no ‘sustainable development’. Activists who embrace the politics of saying ‘no’ to any development project without providing any viable and reasonable alternatives to improving the lives of ordinary people have no credibility. The Roşia Montană project will provide development opportunities to the area and provide both the funds and the infrastructure to create a sustainable local economy long after the mining operation has ceased. The company has already invested $550 million USD in Roşia Montană, including water clean-up operations and in restoring heritage sites so that they might become viable tourist attractions. The water purification technology developed at Roşia Montană is already being tested by the Romanian government for use in other polluted mining sites across the country. In addition, the project will pump some $24 billion USD into the Romanian economy at large – essential to a country that ranks at the bottom of EU development indices.

Absent this project, Romania’s route to economic and social development and to improving the quality of life of its people will be long and hard. The country recently required an IMF bailout. If the Roşia Montană project were to be turned down after 14 years of effort, it would likely freeze much future foreign investment in the country. Without such investment, the prospects for Romania and its people are dismal.

3. Mining operation exceeds the most stringent global standards

Apart from errors of interpretation, and misinformation on other issues raised, Ms. Besliu’s article is full of errors of fact regarding the safety of the proposed mining operation. Safety and environmental standards proposed at Roşia Montană will not only meet but significantly exceed both industry best practice and the stringent demands insisted upon by the European Union environmental directives. Cyanide, a word that is used as a cheap scare tactic, is routinely and safely used in industrial and mining operations all over the world – approximately 900 thousand metric tonnes of it annually, with less than 15 percent used in gold mining. At Roşia Montană it will be used only within a closed circuit system and moved only using certified transporters under specialist supervision. Residual concentrations will be less than a third of the minimum acceptable standard specified by the EU and less than a tenth of the minimum allowable in the US, Canada, and Australia.

The failed Baia Mare dam was constructed and operated to poor communist era standards, and the Baia Mare mining operation had residual cyanide concentrations that were more than 100 times those which will prevail at Roşia Montană. The proposed Roşia Montană dam designs have been subjected to a thorough hazard analysis by the Norwegian Geotechnical Institute. Their conclusion:  the dam at Roşia Montană will be among the safest dams in the world.

Ms. Besliu suggests without any supporting argument that too little of the profit is going to the Romanian state. Yet 78 percent of the project benefits will be received in country, through royalties, taxes and payments to Romanian suppliers. An independent report recently published by the Stockholm-based international Raw Materials Group has stated that ‘the level of royalty – which is a tax irrespective of the profits of the company – is among the highest in Europe, and also high in global comparison.’ The same report points out that it is unusual for nation states to hold any level of ownership in such projects, and it is almost unknown for a European country to do so. Romania and the Romanian people are getting an unprecedented good deal.

4. Protesters do not speak for anyone except themselves

Recent polls suggest that 70 percent of the Romanian people support the Roşia Montană project. A referendum in the Roşia Montană and surrounding areas also showed overwhelming support for the mining operation. While protestors can generate a lot of noise and boost their numbers through social media and using professional protestors to march with them through the streets, that does not make their vested interest position legitimate and neither does it make them representative of either the wider public interest or the views of the majority of the voting public.

The EC is right to state that it is not concerned about the environmental and other impacts which will all fall well within European regulations. The opposition of activists is not in the best interests of Romania or the Romanian people. Like the EC, right thinking people will realize that a major project that brings significant net positive economic, social and environmental benefits to Romania is an essential component for building a sustainable Romanian economy.