FEATURE - Canadian cash lures Romanians in gold mining town ----------------------------------------------------
ROMANIA: August 20, 2002
ROSIA MONTANA - Lucretia Covaci says no money in the world could lure her away from her small, impoverished Transylvanian town.
"I was born here, I don't want to move," the 75-year-old said. She is in the minority. Most others in Rosia Montana, a town earmarked by a Canadian company for Europe's biggest gold mining project, are happy to take the money and run.
Gabriel Resources plans to relocate some 300 households as part of the $420 million project aimed at extracting 300 tonnes of gold and 1,700 tonnes of silver over 15 years.
As compensation, the company offers cash or to build modern, western-style houses near to the town in the western Carpathian mountains for those willing to move.
Local resident Nicolae Bar, 37, said he had already accepted a relocation package.
"The Canadians will give us jobs. There's too much fuss about the relocations. One cannot have the cake and eat it," he said.
Pointing to his shabby house covered with cardboard sheets, Bar said the Canadian company had paid 600 million lei ($20,000) for the property, a fortune considering the average monthly wage in Romania is about $100.
Since Gabriel Resources started drilling for gold last year, Rosia Montana residents have been split over the prospect of seeing part of their ancestral lands and 400 hectares of wooded hills nearby blasted away by dynamite and turned into a lunar landscape.
But resistance waned as residents decided the plan could be a godsend that would give new life to the industrial town of 3,800 people hit by unemployment.
CENTURIES OF MINING
Rosia Montana valley has a history of mining that dates back 2000 years to when Romans settled in what is also known as the Golden Quadrilateral. A large slice of the gold required to fund the expansion of their Empire came from the area.
Digging for gold was the only source of income for many generations living in Rosia Montana.
The industry flourished under late dictator Nicolae Ceausescu who needed gold - easy to convert into hard currency - to finance grandiose projects such as bulldozing a third of Romania's capital Bucharest to build a huge kitsch palace.
The Communist ruler planned a large-scale mining project in the valley, despite the high cost of digging for gold in the local currency, which was worthless on Western markets. But the project died with Ceausescu's execution in 1989.
Local critics of the Canadian project say the "capitalists" are succeeding where Ceausescu failed.
"Ceausescu also planned such a project but nobody dared to say anything," commented Paul Micla, Bar's neighbour.
Decades of poor maintenance of mines under Communist rule as well as under-investment and disregard for the environment have left ugly scars on the landscape near Rosia Montana.
Rusting skeletons of old equipment and mountains of waste lie next to crumbling buildings and tall chimneys.
In contrast to the wasteland near the village, the Canadians have built a model family house, with modern facilities most locals can only dream of, in the centre of Rosia Montana, to lure residents to accept the package.
"The relocation process is smooth...40 families have already moved out, while others sort out their title deeds needed for the legal proceedings," company spokeswoman Dana Golea said.
POLLUTION FEARS
Despite giving their consent, some residents still fear that water waste containing cyanide, used to separate gold from ore, could leak to the surface through old mine shafts.
Two years ago, the mining town of Baia Mare near the border with Hungary was the site of an ecological disaster after a dam at a local gold smelter collapsed and spilled lethal cyanide and heavy metals into the Danube river.
"We don't want another Baia Mare here," one said.
But project manager Gabriel Dumitrascu said there was no risk of that.
"Our processing plant will have a cyanide destroyer, the sole one in Europe. There won't be any danger...toxic levels will amount to only 20 percent of those allowed by European Union norms," he said.
Dumitrascu also said the company had earmarked $100 million to clean up 2,000 hectares around Rosia Montana damaged by the communist-era mines.
And even some opponents of the project say they could be persuaded to give up their fairy-tale landscape - for a price.
Alexandru Berecki, a pub owner and leader of a local group opposing the project, while vowing to fight to the bitter end to "keep the environment intact", says cash could soften his stand.
"I'm very concerned over the effects this project could have on the environment. But if these guys come up, let's say, with $400,000 for my property, I would just go," Berecki said. "I would leave this place without looking back."
Story by Adrian Dascalu
VTI Price at posting:
0.0¢ Sentiment: None Disclosure: Held
(20min delay)