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Balkan Gold: Intrigue, Enrichment and Danger (Part 2)

September 21, 2004

By Christopher Deliso

The protests seen this week in Bulgaria (and documented in part 1 of this article) were not the first of their kind, and will certainly not be the last. In February 2000, the Romanian Baia Mare gold mine suffered a cyanide leak, which killed thousands of fish in the Tisza and Danube Rivers. It swiftly became an environmental disaster for Romania, Bulgaria, and especially Hungary and Serbia.

While the Australian owners of the mine, Esmeralda Exploration, were quick to deny any wrongdoing, local residents burying thousands of dead fish begged to differ. Serbia’s Environment Minister at the time, Branislav Blazic said it would take “at least five years” for the river to recover: “…the Tisza has been killed. Not even bacteria have survived… this is a total catastrophe.”

The next month, the Australian company went into receivership with undisclosed debts. Hungary and Serbia threatened lawsuits against both Esmeralda and the Romanian government, which owned 45 percent of the mine. The latter flatly rejected the possibility of compensation for what was called Europe’s worst environmental disaster since Chernobyl.

However, four months later, the mine reopened with Esmeralda claiming a new devotion to environmental safety. New modifications to the physical structure of the mine and smelter were announced – after it had been revealed that at the time of the accident they were not up to EU standards. Indeed, according to a damning report from Greenpeace, the warning signs that such a disaster could occur had been apparent well before the time when the accident took place. The Australian company had been negligent in living up to its responsibilities, the report charged.

After having been suspended from the Australian stock market in March 2000, Esmeralda was re-instated in the end of 2001, with legal cases begun earlier that year against it in limbo. In the interim, however, it had been able to get back to work, continue to turn a profit, and so repay some outstanding debts to NM Rothschild & Sons and Dresdner Bank AG.

The company was able to later flee the bad PR with a quick name switch. Reincarnated as “Eurogold,” the Balkan’s biggest polluters were soon able to get back in action and further capitalize on their monopoly position in Romania. In 2003, the company released an updated report on its activities in Romania. The only mention of the disaster was in small letters at the very bottom, when Romanian subsidiary Transgold was named as

“…the subject of various claims arising from a tailings dam breach in January 2000. Eurogold is confident that the eventual outcome of these proceedings will have no substantial bearing on Transgold’s financial position.”

According to the Rainforest Information Center, an Australian environmental group, gold extraction using cyanide – “heap-leaching, as it’s called” – has helped fuel a boom in the gold mining industry over the past decade. Only problem being that this method has inevitable and catastrophic environmental effects for the whole area in which it is used.

Meanwhile, the world’s biggest gold mining operation, Denver-based Newmont, recently purchased 19 percent of the Toronto-based Gabriel Resources Ltd.- something which caused this aspiring Balkan investor’s stock to rocket by 48 percent overnight.

Gabriel has its sights set on Rosia Montana, a mine project located in the heart of Romania’s historic Transylvania region. According to the International Herald Tribune, the controversial project

“…will require the relocation of 900 villagers and heavy metal waste has already polluted some valleys and rivers. The company said it was satisfied after ‘performing extensive due diligence’ at the Romanian site that ‘environmental and social responsibility standards’ were being met.”

Romanians disagree. On August 28 a symbolic march wrapped up in Bucharest, which saw local protesters as well as environmental activists from Austria, Germany, Ireland and France cover 140 km in 6 days. Starting in the northwestern city of Cluj, the marchers continued to Rosia Montana and passed through 20 affected villages on their way to Bucharest.

The protesters object to a plan that would not only “…rip out a swathe of the mountain range,” but also force the relocation of almost a thousand people.

The project is under fire not only from environmentalists, but from archaeologists and historians too. Even Prime Minister Adrian Nastase and other top Romanian officials have expressed unease with the plan. Now, the company has stated delays will force it to begin work next May. However, buttressed by the lobbying muscle of a heavy hitter such as Newmont, Gabriel will probably be able to steamroll the protesters’ objections in the end.

Yet could tragedy similar to the Baia Mare affair happen again? It just has.

On September 4th, at yet another Romanian gold mine – the Baia Borsa – a pipeline gave out, causing the release of toxic heavy metals into the Cisla River. The disaster caused neighboring Ukraine to cut off water supplies to 5 towns. A local television station advised hospitals to store drinking water for 3 days in advance. Residents were also warned not to fish “for the time being.”

It becomes hard to argue with the idea that the Balkans are exploited for their riches and left as a waste dump, just so that greedy foreign corporate bosses can fatten their wallets.

In every corporate report one reads, the concepts of efficiency and comprehensiveness are stressed insofar as exploration techniques go. What the Romans did only patchily, what antiquated technologies could unearth only in spots, all of this failure is a boon for modern corporations.

Yet the dream of globalization is far from the one that has always captivated the imaginations of treasure-seeking individuals, fired with the excitement of the hunt, the thrill of discovery, the salvageable sadness of coming up empty-handed. After all, even if one tries his luck and comes up with nothing, there’s always next time.

Industrial excavation, on the other hand, leaves little room for singular thrill. And the price of its “success” is often too high, as the Romanian river disasters clearly show. Yet in a battle between Balkan villagers and global giants, there’s not much doubt as to who will win out.

In the end, the Macedonian superstition about bad luck tormenting the treasure-seeker seems to have come true – but on a global scale – with the mining industry today.

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