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Rosia Montana mine stopped, Canadian company sues using UK-Romania investor-state provision

Rosia Montana

Rosia Montana

A controversial Canadian mine appears to have now been definitively stopped, but an investor-state dispute settlement (ISDS) challenge is already underway.

The Guardian reports, “A Romanian village where a Canadian firm is planning a controversial open-cast goldmine has been declared a site of historical interest, granting it protection from mining activity. ‘Rosia Montana village has been designated a place of historic site of national interest which has a radius of two kilometres [just over a mile]’, said Adrian Balteanu, the Romanian culture ministry’s adviser on cultural heritage. ‘At such a site, all mining activity is prohibited’, he said on Thursday [Jan. 15]. The step is a new blow for Canada’s Gabriel Resources which has been trying for 15 years to get an environment ministry permit…”

In Dec. 2013, Romania’s ministry of culture had also made public a report it had commissioned that deemed “Rosia Montana worthy of consideration as a UNESCO world heritage site and that its galleries are ‘the most extensive and most important underground Roman gold mine known anywhere’.”

The Whitehorse-based company had wanted to construct a massive open-pit mine in the Carpathian mountains that would use cyanide to mine about 314 tons of ton of gold and 1,500 tons of silver. It would destroy mountainsides, displace about 2,000 villagers and create a 300-hectare toxic tailings pond.

As popular pressure moved the Romanian government against the mine, the company has been threatening an ISDS challenge.

In Sept. 2013, the company threatened it could seek up to $4 billion “for multiple breaches of investment treaties” if the mine were blocked. At that point it had reportedly spent “more than $500 million” on the mine. In May 2014, after a Dec. 2013 Romanian parliament vote effectively rejected the mine, the company said it was preparing an international arbitration case against the Romanian government. In a Jan. 2015 media statement, the company said, “Gabriel has issued the Notice as it asserts that it has not been afforded the treatment by the Romanian Authorities that is stipulated by investment protection treaties signed by Romania.”

Early last year the company also stated, “The Gabriel Group is prepared to present its claims to international arbitration in order to compensate fully for its rights to develop the Project that have been denied by Romania’s treaty violations.” And by Aug. 2015, the Ecologist reported that Gabriel Resources had “filed a $2.56 billion claim in a World Bank trade court against Romania after its rejection of a huge gold mine at Rosia Montana. …Although Gabriel Resources is Canadian, it is taking the action under a bilateral trade agreement between Romania and the UK, which includes ‘investor-state dispute settlement’ (ISDS) clauses…”

Today’s news report notes, “Gabriel Resources … declined to comment on the move [by Romania’s ministry of culture].”

The Council of Canadians has supported Romanian opposition to the Rosia Montana mine. In Dec. 2013, we joined with MiningWatch Canada, MiningWatch Romania, Greenpeace Canada, Greenpeace Romania and other groups in an open letter that called on the federal government to “withdraw Canadian government support for Gabriel Resources’ mining project in Romania at Rosia Montana”. We have also expressed our strong opposition to the ISDS provision in free trade agreements like the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Trans-Pacific Partnership (TPP) and the United States-European Union Transatlantic Trade and Investment Partnership (TTIP).