Gabriel Resources gets no WB funding for Rosia Montana project

It does not look as if Canadian mining group Gabriel Resources Ltd. will get funding for its Rosia Montana gold project in Romania, according to reports. Earlier, the World Bank's lending arm, the International Finance Corp. (IFC), and Gabriel Resources said in a joint statement that talks were finalised and if everything worked out accordingly, they would have seen the bank join a consortium of creditors to subsidise the project, which is valued at USD 400 million. The project's first phase will cost USD 250 million and another USD 150 million will go to the last phases.

But things seem to have taken another turn. The Wall Street Journal said in a report that World Bank President James Wolfensohn met with two Romanian environmentalists, who are against the project, and allegedly told Peter Woicke, head of IFC, to finalise talks with Gabriel Resources. But IFC officials were quoted as saying that the talks ended because Gabriel Resources could subsidise Rosia Montana quicker than if it had the bank's support.

"In light of the indications from the sponsor that there is available commercial financing for the project, and our concern that IFC's involvement may require the company to proceed with the project more slowly than they wish, we have concluded that it is in everybody's best interests that we do not pursue discussions with the company regarding IFC's involvement in the project," IFC was quoted as saying.

The gold project is situated 85 kilometres north of the Deva town in the Carpathian Mountains and would develop into the biggest open-pit mine in Europe. Reports suggest that it holds reserves of some 10 million ounces of gold and 50 million ounces of silver.

With a life span of 17 years, Rosia Montana forces the relocation of 2,000 people and the destruction of over 900 homes, according to the reports. Construction of the mine is scheduled to end in 2005 with production starting right after.