Gabriel Resources (TSX-V:GBU) lawsuit against Romania for $4.4 billion in alleged losses related to the company’s stalled Rosia Montana gold and silver project, suffered a setback this week as the country told international arbitrators they can’t hear the Canadian miner’s claim.
Romania’s government said a recent, ground-breaking court decision had slammed the door on certain investment arbitration cases involving European Union members, so Gabriel’s case can’t be solved that way any longer, legal news site Law360.com reported, without elaborating further on the verdict.
Earlier this month, Gabriel Resources said it expected the hearing on the merits of its suit, filed last year at a World Bank’s tribunal, to take place in December 2019. The new development, however, may mean the company will have to wait longer than anticipated to find out whether Romania will pay the demanded figure or anything at all.
The company’s President and CEO, Jonathan Henry, told MINING.com that while he was unable to comment on “media speculation,” he could confirm Gabriels’s case remained “very much alive and active.” He added that Romania’s challenge was only against one of the bi-lateral treaties the company is using.
After spending about 15 years and $700 million trying to build its flagship $2bn Rosia Montana mine, the Toronto-listed company locked-horns with the government of the European country, which yielded to environmentalists’ pressure and halted the project on concerns over the use of cyanide in the extraction process.
Opponents to the project also claimed that Rosia Montana Gold Corporation (RMGC), majority owned by Gabriel Resources, incurred in money laundering and tax evasion.
Bucharest officially withdrew its support for the project in 2014, after revoking a bill that would have allowed the mine to go ahead.
The open pit operation would have been Europe’s largest gold mine and, according to the company, it would have injected up to $24 billion into Romania’s economy.
The damage claim represents roughly 2% of the nation’s gross domestic product of about $220 billion (187.5 billion Euros) recorded last year, based on data from its National Institute of Statistics (INS).