The final stake in the Roşia Montană case - several billion dollars in damages?

The Romanian state may have to pay several billion dollars in the form of damages to Canadian company Gabriel Resources, if the draft law which would allow the mining of gold at Roşia Montană doesn't get through the Parliament, according to yesterday's statements by Prime Minister Victor Ponta. As the contract between the Canadian company and the Romanian state is still a secret, it would be interesting to say the least to know how prime minister Victor Ponta to know the contents of the contract and the amount of the damages that the state would have to pay, specifically 2 billion dollars, according to his statements over the last two days.

In this context, it would bear reminding the close friendship between Victor Ponta and Dan Şova, the minister of Major Projects, who is in charge of this investment. Moreover, the step mother of the minister is a lawyer at NNDKP, the law firm that has represented RMGC in all of the lawsuits conducted so far.

After running into the opposition of Crin Antonescu in the Parliament, prime minister Victor Ponta said yesterday that the project of Roşia Montană "is closed" and that the street protests have reached their goal.

Victor Ponta said: "I was required by law, and I am trying to explain it to those who want to hear me, that according to the current law, I had to give an approval for the Roşia Montană project to start. They have fulfilled every requirement of the law. Precisely because I thought that it wasn't a good thing to do, I have sent the law into the Parliament in order to have a true debate. That's the way things are and because of that, if I hadn't done anything, I was going to pay don't know how many billions in damages to the company in question. I don't want to pay, out your money, the citizens', damages for some contracts signed since 1998 until the present day. I want to have a decision of the Parliament".

This is not the first time that the prime minister brings up the issue of damages to be paid to the Canadian company, as he has expressed his decision to send to the Parliament the law of gold mining for fear of damages that the state would be forced to pay, if the project doesn't start.

According to some market sources, the final stake of the entire scandal is represented by the damages of 2 billion dollars which the prime minister brought up.

There are some voices that have complained that, since the contract between Roşia Montană Gold Corporation and the Romanian state is secret, the prime minister could not know its terms, particularly when it comes to the amount of the damages which the Canadian company could get in the event of the termination of the project.

Furthermore, when Victor Ponta was making the statements in question concerning the amount of the damages, nobody asked for the cancellation of the contract with RMGC, but only with the rejection of the law approved by the Government, as this claim this appeared during the protests of the activists across the country.

Our sources told us about a scenario that, in the end, would be the final stake of the row focused on the "Roşia Montană" topic.

Thus, amid the accelerated drop in the price of gold, and the fact that lately, the costs of mining gold have increased compared to its price, the project of Roşia would no longer be viable.

Numerous international experts have said that the drop in the price of gold (in June, the approximate price of gold was 1270 dollars per ounce) below the price of the marginal cost of gold of 1300 dollars per ounce) will eventually lead to a drop in the investors' appetite for mining exploitations.

This trend is already visible, as Eldorado Gold, the Canadian company which holds the licenses for the exploitation of Certej, has postponed many of the mining projects in countries such as Greece or Turkey.

A low price of gold, corroborated with the outrage of the civil society as well as the possibility of the project being "deadlocked" for a long time, mostly due to the alleged irregularities concerning the exploitation licenses, it would have determined the representatives of the Canadian from the Canadian company to negotiate its "exit" from the mining project in Apuseni, our sources told us.

According to their statements, this way, everybody would be happy: the Canadian company would walk away with two billion dollars, and the prime minister and the USL alliance would win part of the electorate, by claiming that they have carried out the will of the people, by canceling the contract.

According to the latest financial statement of the Canadian company, it would have to recoup about 472.4 million Canadian dollars.

The alternative to the impossibility of recouping the amount "depends on the ability of the company to divest its stake in advantageous conditions", the report in question, from March 2013, states. Our sources also told us that the whole damages scenario began after the transfer of the block of shares (19.3%) from the Ministry of the Economy to the Department for Infrastructure Projects and Foreign Investments, led by Dan Coman Şova, a close friend of Victor Ponta.

The press has repeatedly written about the friendship between the two officials, the press repeatedly wrote about the affair of the Turceni Energy Complex.

At the time, the justifications of the authorities concerning this transfer of shares have been correlated with the need for investments in Roşia Montană and with the transformation of the project of one of national interest.