Alro Slatina announced cuts in aluminium production of 44,000 tonnes from 260,000 tonnes for 2009

Romania Mining Report 2009 -The two main gold projects in Romania saw numerous developments throughout the year. The Certej gold project, backed by European Goldfields, made advancements in the permitting process to allow for further exploration and mining in the Certej area. The Technical Feasibility Study attached to the project was approved by the National Agency for Mineral Resources and its Environmental Impact Study Business The two main gold projects in Romania saw numerous developments throughout the year. The Certej gold project, backed by European Goldfields, made advancements in the permitting process to allow for further exploration and mining in the Certej area. The Technical Feasibility Study attached to the project was approved by the National Agency for Mineral Resources and its Environmental Impact Study was in the latter stages of assessment. Though permits have not yet been approved, the company is confident in the progress being made for a favourable outcome. The other notable project is the proposal for the development of the Rosia Montana gold mine. If approved, it would be the largest of its kind in Europe, with estimated resources of 10mn ounces. Gabriel Resources, the Canadian-based mining company backing the project, have faced more obstacles in what has become a long and bitter battle between the mining giant on one side, and the government and public of Romania on the other. The Rosia Montana area is rich in resources, with high-value gold readily available for extract from its deposits. A quick resolution to the debate between Gabriel Resources and other interested parties looks unlikely amidst the controversy caused by the project?s proposal. Local inhabitants and environmentalists have a bitter distrust of mining companies due to their experience of areas being damaged by the mining process. Gabriel Resources? promise to not only clean up any areas damaged by them, but also by mining prior to their operations, does little to assuage the public?s suspicions. There is huge potential for economical benefit for the country, including a wealth of employment prospects, if Gabriel Resources were permitted to begin the project. However, economic gain alone is not enough to persuade those in Romania who believe there is more value in an untarnished landscape and environment. It would appear that the company is prepared to exhaust every avenue to achieve a go-ahead. Cyanide leaching is a large part of the contention being the most efficient way of extracting the gold from its ore. Gabriel Resources are promising low levels of just 2-3ppm, far below the EU regulation of 10ppm, but this has yet to convince those who remember the disastrous cyanide spill at Baia Mare in 2000, which devastated the environment surrounding the spill for 100s of kilometres, including cross border pollution into Hungary. Though an immediate resolution seems unlikely, it is also unlikely that the gold deposits will remain untouched in the long run. The government continues to voice support for coal mining companies and in November 2008 Romanian President Traian Basecu stated that in order to assist industrial companies, an expansion of the domestic markets and bank lending for production must be achieved. The state wanted to encourage banks to be more forthcoming with loans to companies wanting to expand production. In July 2008, Minister of Economy and Finance Varujan Vosganian said that the coal mining company CNH could be profitable if it was allowed to be debt free. For this reason the government decided to intervene and block foreclosure procedures for 6 months, which had been launched in a bid to retrieve 844mn LEI to the state budget. In June 2009, the government also announced intentions of granting state aid of 200mn LEIT to SNLO stating that the company would benefit by receiving compensation for its current debts. Many sectors of the mining industry have been detrimentally affected by the ailing global economy. Falling prices in metals saw a decrease in output across many companies producing aluminium, zinc, lead, coal and steel, with many companies downsizing production and personnel in preparation for the expected period ahead before the market recovers. Foreign investment is expected to slow down as further effects from the economy are realised. Alro Slatina announced cuts in aluminium production of 44,000 tonnes from 260,000 tonnes for 2009. In December 2008, the company also announced that they were considering 1,200 job losses in 2009. Alro Slatina had already reduced its work force by 93% from 2007 with just 3,392 employees at the end of 2008. Mechel Targoviste and TMK Resita, the two biggest steel producers also stated expected production cuts and redundancies for 2009 and in January 2009, zinc and lead production firm Mytilineos temporarily suspended their production lines and announced redundancy plans for 1,050 employees which accounted for 80% of the workforce. Resumption of higher production and employment levels is heavily dependent on the conditions of the global market and the metal prices which currently mean metal production is not as profitable. Many metals such as lead, aluminium and zinc have fallen around 50% of their value in 2008. Out of about 170,000 miners registered in 1997, only about 49,000 were still employed in the field by October 2006. Further redundancies were experienced in the mining sector, particularly towards the end of 2008 as demand for steel, aluminium and coal began to wane. Further cuts in personnel were expected to occur in 2009. Only on recovery of the economic climate could an increase in employment be expected.