A Canadian mining company that secured the development rights for Ro?ia Montan? in Romania, home to Europe's largest gold mine, suffered a complete defeat in a damages dispute against the Romanian government, which halted the project citing environmental protection, demanding compensation of about 8 trillion won.
According to foreign media on the 8th (local time), the International Centre for Settlement of Investment Disputes (ICSID) under the World Bank ruled in the arbitration case where Canadian mining company Gabriel Resources (hereafter GR) sued the Romanian government for damages up to $6.7 billion (about 8.84 trillion won), stating that "no compensation is required," siding with Romania.
On September 6, 2013, at the World Cup qualifying match between Romania and Hungary held in Bucharest, Romania, Romanian football fans are holding a banner that reads "We Save Rosia Montana." [Image source=Yonhap News]
The decision came nine years after the related dispute began in 2015. Rather, ICSID ordered GR to pay millions of dollars in arbitration and partial legal costs to the Romanian government.
In 1999, GR obtained the rights to use Ro?ia Montan?, a mountainous region in western Romania, and started a project to build Europe's largest gold mine. GR promoted the construction project as one that would develop the local economy and create employment opportunities. Ro?ia Montan? was estimated to contain about 314 tons of gold and 1,500 tons of silver.
However, concerns spread that the project would destroy ancient Roman mining ruins and cause an ecological disaster. The company’s use of millions of tons of sodium cyanide (cyanide) for mining caused severe environmental damage. As a result, in 2013, Romanian citizens and environmental groups held large-scale protests in succession, strongly opposing the project, and the Romanian government withdrew support for the mine construction in 2014.
In response, GR filed for arbitration with ICSID, a World Bank-affiliated arbitration body, in 2015, claiming that "the Romanian government failed to carry out administrative procedures despite its obligation to act." However, ICSID dismissed the claim.
Romanian Prime Minister Marcel Ciolacu stated in a press release, "It was unfair for Romanian citizens to bear such high costs," and expressed gratitude to the legal team representing Romania.
GR said, "We regret that Romanian citizens missed out on the economic benefits this mining project could have brought," and added that it is reviewing all legal actions, including appeals.
Meanwhile, the 'Ro?ia Montan? Mining Landscape' was added to the UNESCO World Heritage list in 2021.
Reporter Johanju, Legal Times
※This article is based on content supplied by Law Times.
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