Romania eyes 78 pct of revenues from delayed gold mine project – by Luiza Ilie (Reuters U.S. – July 11, 2013)

BUCHAREST, July 11 (Reuters) – Romania aims to bank as much as 78 percent of revenues from Europe’s biggest open cast mine being developed by Canada’s Gabriel Resources and will finish renegotiating terms of the long-delayed project by September.

Gabriel controls the project which aims to use cyanide to mine for a total 314 tonnes of gold and 1,600 tonnes of silver among a cluster of villages in the Carpathian mountains, known as Rosia Montana. It owns 80 percent in local unit Rosia Montana Gold Corporation (RMGC) with the Romanian government holding the rest.

The mine has been stuck in limbo for years, waiting for a key environmental permit, but Prime Minister Victor Ponta promised his cabinet will ask parliament to vote on whether to give the 14-year-old plan the green light in the fall.

On Thursday, the government said it aims to secure larger benefits for Romania from its natural resources, including “a bigger stake and higher royalty taxes on gold resources,” according to the national infrastructure ministry. “The government is renegotiating the Rosia Montana project in its entirety to ensure Romania gets maximum and fair benefits,” the ministry said. “We will get … 78 percent of what revenues the project generates.”

The revenues include royalties and other taxes, the state’s share in the project as well as indirect gains from new jobs, but the ministry did not offer more details.

“Given our calculations and the current state of negotiations, the level of taxes and levies plus royalty plus dividend, contractors and suppliers and local workforce creates a net benefit of at least 75 percent for Romania of the project’s value added,” an RMGC spokesperson told Reuters.

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