September 25, 2013 / 4:58 PM / 6 years ago

Romania PM says spurning gold project would deter investors

BUCHAREST (Reuters) - Romania would send a catastrophic message that it is not open for investment if it rejects a gold mining plan by Canada’s Gabriel Resources GBU.TO, Romanian Prime Minister Victor Ponta said on Wednesday.

Romania's Prime Minister Victor Ponta speaks at a joint news conference with European Commission President Jose Manuel Barroso after a meeting at the European Commission headquarters in Brussels February 4, 2013. REUTERS/Yves Herman

Romania’s parliament is debating a law permitting the Rosia Montana project, which would be Europe’s biggest open-cast gold mine. It would provide much-needed investment but has triggered street protests by people who say it will hurt the environment.

“If parliament decides not to make this project it is not going to be a big issue (economically) but if Romania gives the message that we are ... against foreign investors, against using our potential, that would be a catastrophe for Romania,” Ponta said at a Reuters Investment Summit.

“Rosia Montana is a very important project as a symbol, not first of all economically,” Ponta said in English.

“We need to take advantage of our natural resources, of course respecting all environmental standards, but if these are respected we should be in favor of exploring.”

POLITICAL COURAGE

Ponta has, in the past few weeks, expressed muted support for the project and it was his decision to give parliament a vote on the project. On Wednesday he gave his strongest signal in some time that he wanted to see the mine go ahead.

He said it was a controversial project and it was right society should have a debate. But he said he would urge his supporters in parliament “to prove once again that Romania is not denying its own right to development”.

“It’s our right to development and I will keep fighting for this.”

The Rosia Montana project, which was proposed 14 years ago, is viewed by some investors as a test case for other natural resource projects, including shale gas. Chevron (CVX.N) has permits to explore for shale gas in eastern Romania.

The U.S. Energy Information Administration estimates that Romania has sufficient recoverable reserves of shale gas to meet domestic demand for more than 100 years.

“Lack of courage by previous governments to deal with controversial projects, I think it was a mistake,” Ponta said.

Ponta also said he would not allow any loosening of fiscal discipline over the next three years, despite likely political pressure linked to a presidential election next year.

“We will resist all sorts of populistic approaches. Our government will be very stable and rigid,” said Ponta, who came to power last year and at 41 is Romania’s youngest prime minister.

He said his government, which has just finished talks on a new IMF stand-by agreement, would press ahead with a privatization program, starting with an initial public offering of hydro-electric power firm Hidroelectrica early next year.

He also said any tensions between his party and its coalition partners would not threaten the government’s stability.

(For other news from Reuters Russian and Eastern Europe Investment Summit, click here)

(Follow Reuters Summits on Twitter @Reuters_Summits)

Editing by Keiron Henderson

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