Edward Lucas

Here is a short piece from the business section about a gold mine in Romania. All the research was by my excellent stringer in Bucharest, Cristina Merrill.

Romania

No gold please, we're Romanian

Apr 6th 2006 | BUCHAREST
From The Economist print edition

A gold mine excites suspicion

A FOREIGN investor promising up to 1,200 jobs and a $2 billion boost to a poor country is normally welcome. But not when the investment is a gold mine, and the country is Romania.

The investor is Gabriel Resources, a Canadian mining company. It has been trying since 1997 to develop Rosia Montana, a region in northern Romania that, it reckons, contains 10.6m ounces of gold and 52m ounces of silver. This month Gabriel is due to publish a much-awaited environmental-impact assessment of the project.

Under communism, mining in Rosia Montana (as, indeed, everywhere else) was carried out without the least regard for the environment, or the region's archaeological heritage. The area is now badly polluted with cadmium and other heavy metals. In 2000 a cyanide spill from another mine in the region contaminated a river that flows into Hungary. That makes Romanians, normally apathetic about such things, twitchy about any new mining there—especially if it, too, involves cyanide, as the new project will.

The company has tried to assuage these worries. It says it has spent $160m on preparatory work, including advertising campaigns to highlight its high-tech and ultra-clean approach to mining, and on environmental and archaeological projects. It promises more once mining starts. But that has done little to convince the protesters. They are a mixed bunch, including anti-globalisation and Green idealists, as well as some dodgier characters who regard opposition to the project as a way of demonstrating their public-spiritedness.

A report in 2004 for the Council of Europe by Eddie O'Hara, a British MP, described the opposition to the project as “in part exaggerated” and “very much fuelled by outside bodies, presumably well-meaning, but possibly counter-productively”. The environmental objections “do not take account of modern mining techniques...in fact the project will help to clear up existing pollution.”

There are strong arguments in favour of the mine, though they rarely get a hearing in the partisan and excitable Romanian media. Average incomes in the region are only one-third the national average (itself a measly $270 a month). More than half of the workers there are unemployed; that will rise to 90% once another communist-era gold mine closes later this year. In a village of 2,000 people that will have to be demolished (the company plans to rebuild a modernised replica 5km away) more than half the homes lack running water. Some 42% of the villagers have already sold their homes to the company.

A local mayor, who supports the mine, was recently re-elected with a huge majority. Candidates opposed to the mine polled less than 10%. Romanian do-gooders may relish bashing multinationals. But the people directly affected see it otherwise.