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Town Mulls Risk in Golden Opportunity

Jobs: Foreign investment in a 2,000-year-old Romanian gold mine has split locals. Some see an economic boom; others fear they'll get the shaft.

July 22, 2001|ALISON MUTLER | ASSOCIATED PRESS

ROSIA MONTANA, Romania — Deep in the Apuseni mountains of western Romania, this town is sitting on a gold mine. But not everyone's happy about it.

Will poverty-stricken locals get well-paid, safe jobs and new homes if the 2,000-year-old mine--which contains some of Europe's largest gold reserves--is fully exploited? Or will the mine, two churches and 600 houses be wiped off the map to create a modern open-pit operation that might not last two decades?

Gulping a glass of local beer, a cigarette hanging from cracked fingers, veteran miner Simion Sicoe, 39, ponders these questions. "The Romanian state is capable of exploiting its own assets," he grumbles. "Most people are against this."

The stench of bug-repelling creosote in the dank bar halfway up the mountain overpowers the aroma of strong tobacco and weak beer. Sicoe earns $131 a month at the state gold company, which employs 700 people. He's joined at the bar by locals who berate the arrival of an ambitious new mining company--and lament what they see as a dark future.

Suspicion is an inbred characteristic of the rugged people who live in these mountains of western Romania, where gold mining has been about the only industry for two millenniums. Even the Romans invaded the area to plunder the gold reserves.

Former Communist dictator Nicolae Ceausescu demolished some of Rosia Montana's old houses in the late 1980s and moved locals into shoddy apartments in a misguided scheme to urbanize Romania's rural population. About half of Romania's 13,000 villages were up for "systemization," the name for Ceausescu's plan.

After the 1989 revolt that toppled Ceausescu, Romanians were duped by fraudulent investment schemes, insolvent banks and crooked privatization deals. Now some locals suspect outsiders have come to do the same thing with the mine--exploit them and leave them empty-handed.

Others view the $350 million that the majority Canadian-owned Rosia Montana Gold Corp. wants to sink into the mine as an economic lifeline to a depressed and isolated region wracked by 25% unemployment.

The government has designated the area a "disadvantaged zone," which means tax breaks for investors. If the feasibility test is successful, the company will raise most of its investment from foreign banks, it says.

Ethnic Hungarian cobbler Koloman Zlotski, 72, whose children have moved away, says business is not good and he would gladly move if the mine expansion displaces him.

"In China, they moved 2 million people for jobs," he says as he stitches a broken strap to a leather bag.

State mining is in decline. Government subsidies to the industry decreased from $528 million in 1990 to $100 million in 1999. In Ceausescu's time, Rosia Montana gold mines produced about 105 pounds of gold per month, compared with 50 pounds today.

"The investment will help socially, economically and environmentally," Gary O' Connor, the company's manager in Romania, says, pointing to a World Bank program which foresees the closing of unprofitable mines. "If there is resettlement of people, this will only be based on what people want to do."

The new company is making heady promises of hundreds of jobs and safer mining methods. Many miners in the Transylvanian town die in their late 40s of silicosis, a fibrosis of the lungs caused by inhalation of dust.

It acknowledges that for the open-pit mine to function, 600 houses and buildings, and maybe a Roman Catholic and Orthodox church, will be demolished, although there are tentative plans to preserve part of the town's historical center.

The village boasts a handful of bars, a couple of grocery stores, and dilapidated, dusky pink-and-ochre Austro-Hungarian-style mansions that suggest a richer past. Transylvania was awarded to Romania in 1918 after centuries of rule under the Austro-Hungarian Empire.

"I am in a delicate position," says Mayor Virgil Narita, sporting a thick gold necklace and a gold ring as big as an acorn on his little finger. "Gold Corporation has paid their taxes and sponsored some projects . . . but if they don't compensate people properly, there could be protests."

The mayor, who owns three shops and a house with a swimming pool, notes that the government supports the investment. Some of the villagers accuse him of betrayal--running for office on a ticket opposing the relocation, while now pursuing a more diplomatic line.

He claims public opinion has shifted and that as mayor, it is his duty to represent public opinion.

"Everyone wants investment, but they don't want to move. You can't say you agree to investment but not to move," says mining engineer Paul Gruber, who lives in a cramped two-room apartment and hopes for a better-paying job and a new home.

But some argue that following short-term profit is shortsighted.

"Instead of this village, there will be a hole," says Ruxandra Manta, a history professor and one of the town's most vocal critics of expanded mining operations.

"They have been mining here since before Christ. What do they want to do? To destroy the cemetery and five churches?" Manta says. "I'm not against the investment, but I want them to mine underground as they have for thousands of years."

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