Rosia Montana was supposed to be Europe’s largest gold mine, now it became the reason Canadian project developer Gabriel Resources asks Romania huge damages of USD 4.4 billion. The lawsuit would be filed Friday with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
“Romania has taken this asset away from us, it’s tantamount to expropriation,” said Gabriel’s Chief Executive Officer Jonathan Henry. “If they want to do that it’s fine, but they have to compensate us.”
According to him, since early 2015, Romania has not responded to the company’s notice of dispute or request for arbitration. “Instead it has implemented tangential investigations, penalties and harassment,” Henry alleged. He pointed out that Gabriel would have injected up to USD 24 billion into the country’s economy.
Gabriel was on the verge of getting the go-ahead for the USD 1.4 billion project in 2013, when the Romanian government approved a draft law declaring the mine to be of “exceptional national interest.” But the prospect of the mine provoked huge environmental protests over the use of cyanide in the extraction process. Civic groups said it would damage Roman-era mining shafts and the government withdrew its support for the project in 2014. The mining project, near the village of Rosia Montana, was expected to produce 500,000 ounces of gold annually over 16 years of operation.
Gabriel, which has invested some USD 700 million in Romania, was first granted an exploration license in June, 1999. With no other mines, Gabriel will decide its plans after the case concludes.
“We are claiming that Romania has expropriated our project and we are left with no alternative but to seek compensation,” said Henry, adding that the project has been over-politicized. “Politics has got in the way of progress,” Gabriel’s CEO said.
Romania has to respond to the suit early next year. Arbitration is scheduled to start in 2019 and an outcome is not expected until 2020, the company also stated.