Dirty Gold: Crisis Has Europe Clamoring to Mine – by Luke Dale-Harris (Spiegel Online International [Germany] – April 26, 2013)


In a bland and brightly lit ballroom in the center of Zurich, the leaders of a hundred of the world’s largest gold exploitation companies looked on as the European Gold Forum opened with a slide show of bank notes from Weimar Germany. One hundred marks, 500, 10,000, 1 million, 100 million, 500 million. It cut to some text, left hanging on the screen as the audience applauded. “Currency destruction through Hyperinflation. Will history repeat itself?”

Over the next three days of last week’s conference, many seemed to hope the answer would be “yes”. With the price of gold driven by economic instability, the current grim outlook suggests a bright future for gold, as investors shift their money into the relative safety offered by the precious metal.

Around the world, mining companies have been gearing themselves up accordingly and, for those at the conference, even the recent dramatic drop in the value of gold couldn’t hamper the optimistic atmosphere. “The price drop will be temporary,” insists Tim Wood, executive director of the forum’s host, Denver Gold Group. “The expectation is that gold will resume its climb and go to new record highs as ultimately the monetary policy of all these countries is going to fail.”

A markedly different mood became apparent on the street outside the venue, where a group of anti-mining protesters held banners and waved the flags of their home countries, the colors of Greece, Portugal and Bulgaria conspicuous among them. Breaking through the crowd, a funeral procession of masked figures delivered a gold colored coffin to the doors of the ballroom, chanting as they walked. “Rosia Montana will not be destroyed for gold. Stay out of Romania!”

‘Digging for Cash’

Though small, the protests resonate widely across Europe. As the sovereign debt crisis continues to grip the Continent, governments have become increasingly responsive to the mining companies’ proposals to tap gold reserves. In recent years, environmental regulations, local opposition and high costs have mostly kept foreign mining companies away. Instead, they have focused on large reserves in the developing world. Recently, though, much of Europe has seen what Theodota Nantsu of the WWF calls “an avalanche of regulation rollback” and an opening of gold reserves previously deemed unacceptable for mining.

There is gold to be found across Europe, but the correlation between those countries now moving to exploit, and those hit worst by the sovereign debt crisis is clear. Since last year, the Portuguese government has signed 95 separate contracts with mining companies, with the priority given to gold and silver. In Greece, the government’s opening up of its gold deposits to a Canadian company has sparked violent protests reported around the world. In Bulgaria and Turkey, gold mining has been growing exponentially since mining laws were recently liberalized.

“For governments, it’s a case of beggars can’t be choosers,” says Wood. “If you need to raise revenue for your country, then mining is a very good way to do it as you are essentially digging for cash.”

Europe’s Largest Gold Deposit

In Romania, the extractable gold buried beneath the small Transylvanian town of Rosia Montana is estimated to be worth, at today’s prices, somewhere close to €16 billion ($20.8 billion), making it the largest known gold deposit in Europe and third largest worldwide. The joint venture Rosia Montana Gold Corporation (RMGC), which is 80 percent owned by Canadian mining firm Gabriel Resources and 20 percent by Minivest, a government enterprise, secured the license to extract the deposit. RMGC officials the mine would inject a much-needed $4 billion into the Romanian economy and create 3,600 jobs.

Despite this, the majority of Romanians stand against it and, after 16 years of planning, the mine remains unopened and has become a highly contentious issue for the government.

For the rest of this article, click here: http://www.spiegel.de/international/europe/romanian-mine-a-symbol-of-new-push-for-resources-in-europe-a-896857.html#ref=rss

Comments are closed.