Announced a few days ago as a big success of the current government, the privatization of the Cupru Min mining company has failed, as negotiations with Roman Copper have ended with the parties reaching no agreement whatsoever. Two weeks ago, the Canadian company won the tender for the selling of the full share package of Cupru Min, which exploits the Rosia Poieni mine, in central Romania, where over 60% of Romania’s copper reserves are concentrated. Participating in the tender were another three companies, from Australia, the Netherlands and Bulgaria, though the latter one was disqualified.
The purchasing price was set at 200.8 million Euros, 3.5 times more than the starting price, of 57.3 million Euros. According to experts with the Romanian Ministry of the Economy, though, the value of the copper resources in Rosia Poieni stands at 13-14 billion Euros. The controversial contract for the selling of Cupru Min was not signed, because the Romanian state’s demands regarding the full payment of the contract, the transparency of the contract and fulfilling environmental obligations were not met. According to the Canadian party, that were surprised to hear about the negotiation team’s refusal, the parties did reach a verbal agreement, which allegedly included terms that had not existed in the initial form of the contract.
Roman Copper claims it is ready to observe all the conditions imposed by the Government for the take over of the mining company, but the Romanian authorities say negotiations have ended irrevocably. Actually, the Romanian state called on the Canadian company to set up a collateral deposit of 32.27 million Euros for environmental investment and to pay the amount with which the shares were bought, that is 200.7 million Euros, within 30 days since getting the Competition Council’s endorsement and the environmental permit. The Canadian company, though, refused those conditions, so privatization did not happen.
Roman Copper was set up in Toronto, late last year, specially for the take over of Cupru Min by Bayfront Capital Partners, a company that provides financial consultancy services. Declared by the Romanian state as bankrupt, in 2011 Cupru Min reported a net turnover of 150.6 million lei, that is 34 million Euros, and a net profit of 30.7 million lei, that is 7 million Euros. Cupru Min can currently extract 1.5 million tons of ore per year, and the processing activity is only carried out with one technological line, out of a total of four.
Approved back in 2006, the privatization of Cupru Min will be resumed in the coming period, in keeping with the commitments made by the Romanian authorities to the IMF. Also this year, other state-owned companies will be privatized, such as Transelectrica, Transgaz, Romgaz, Hidroelectrica and Nuclearelectrica.
|
2025-04-04
Print
Listen again