Romanian mining revives: From the black hole of the economy to profit
The mines closed one by one by the Romanian state, as owner, are starting to be reopened by foreign companies. Pulled out of bankruptcy, they are put to work again using the latest technologies. The most illustrative example is that of gold mines that the Romanian state has renounced to exploit since 2005 on the grounds that the deposits were exhausted. Now, foreign companies show that things are quite different.
OFZ has bought a manganese mine
Slovakia’s OFZ has recently bought a manganese quarry. Located in Vatra Dornei, the quarry had been part of the defunct company MinBucovina, entered into bankruptcy in 2008 and it was subsequently taken over by another company that, in turn, went into insolvency. Against a price of EUR 1mln, the representatives of the Slovak company, which produces ferro-alloys, say that this quarry will provide about one-fifth of the manganese demand for at least 20 years.
According to the Slovak company, the mine is a stable source of manganese for the company, and purchasing it will allow OFZ to annually make savings of half a million euros.
Vast Resources continues investments
British company Vast Resources will invest USD 2.6mln to develop the metallurgical complex near Sucevita mine, in Suceava County.
Vast Resources, company listed on AIM market of the London Stock Exchange, owns in Romania 100% of the gold project Manaila, Suceava County, and 80% of the polymetallic mine from Baita, Bihor County, for which it is waiting to get the operating license from NAMR. The money announced to be invested represents part of the first instalment of the financing agreement of USD 9.5mln concluded in January this year by the British company with Mercuria Energy Trading SA.
“By concluding this first phase of the agreement, Vast Resources will allocate USD 2.6mln to develop the mines managed in Suceava and Bihor counties. Company’s priority for this year remains the construction of the metallurgical complex near the mine in Suceava, whose purpose is to contribute to reducing transport costs, streamlining the entire process and increasing the production capacity,” a communique of the British company reads.
The second instalment of the agreement signed with Mercuria Energy Trading, worth USD 5.5mln, is expected to be traded in July this year, according to the plan announced by the company, which reported early this year through the voice of Andrew Prelea, CEO of the company, that for 2018 the investment budget allocated for Romania was USD 9.5-10mln. Shareholders of Vast Resources, a company listed on the alternative market of London Stock Exchange, include internationally renowned companies such as Barclays or Investec Wealth & Investment.
The Australians eye the mines in Maramures
Australia’s Okapi Resources Limited wants to develop mining projects with gold mining potential in Cavnic area, Maramures County.
Company’s manager, Nigel Munro Ferguson, has recently met with local authorities to find together the possibilities of reopening the mines in the area. Ferguson is not at the first attempt to take over mines in Romania, initially targeting a number of copper mines, but the discussions carried out at the Ministry of Economy haven’t been completed yet.
SAMAX to mine for gold in Apuseni Mountains
SAMAX Romania could soon start gold mining from Rovina perimeter, located in Hunedoara County.
For now, the Executive is expected to approve the concession license for the activity of mining for copper ore with gold content in Rovina perimeter.
SAMAX Romania will have to pay taxes and royalties. The annual tax on mining exploitation is RON 34,180/sq km. Royalty is 5% of the value of mining production for non-ferrous ores and 6% for noble metals. Moreover, local taxes also have to be paid. The surface of the mining site is 27.678sq km.
“Consequently, the annual value of the tax on mining activity is RON 946,034.04. The value of the mining production estimated for the concession period of 20 contractual years is USD 3,697,911,600 for gold and USD 1,772,194,945 for copper. Consequently, the value of royalty owed to the state budget for the concession period is USD 221,874,696 for gold and USD 88,609,737.25 for copper,” the decision prepared by the Government shows.
In total, the Romanian state would have to collect from royalties during the 20 years of concession a value of USD 310,484,443.25.
The deposit in Rovina, near Rosia Montana, contains gold-copper ore of porphyry copper type, easier to exploit through the floatation method – a technology that does not involve the use of cyanide. The gold deposit in Rovina is the second largest in Europe and is valued at around USD 5 billion.