After the National Agency for Mineral Resources (ANRM) denied the request of Roșia Montană Gold Corporation (RMGC) for a 5-year extension of the Roșia Montană mining license, which expired on June 20, Canadian company Gabriel Resources, the majority shareholder of RMGC and former developer of the stalled gold mining project, threatens Romania with a new lawsuit at the International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC.
The exploitation license was issued by ANRM in 1999 for Minvest Deva, valid for 20 years, and was later transferred to Roșia Montană Gold Corporation (RMGC). In 2019, RMGC obtained a 5-year extension of the license, which expired on June 20, 2024. On March 6, the company requested another extension. After reviewing the documentation, ANRM decided to reject the extension request.
“Following the evaluation of the documentation submitted under Article 20 of Mining Law 85/2003 by Roșia Montană Gold Corporation SA and the correspondence exchanged during this period, the National Agency for Mineral Resources decides not to extend the validity of the concession license for the exploitation of gold-silver ores in the Roșia Montană area,” stated ANRM on June 20.
The majority shareholder of RMGC is Gabriel Resources Jersey (an island near Great Britain) – a subsidiary of Canadian company Gabriel Resources Ltd. This entity holds over 80% of the shares, while the remainder is held by the Romanian state through Minvest Roșia Montană.
The inability to exploit the license was the main argument used by Gabriel Resources in its 2015 lawsuit against Romania at the Washington Arbitration Tribunal, where it claimed to have been “expropriated” of the rights resulting from the exploitation license. However, on March 8, the arbitration tribunal ruled that the Romanian state had not harmed the company.
RMGC had not obtained the environmental permit for gold exploitation, and the archaeological discharge certificate for the Cârnic massif—the main area where the investment was to take place—was the subject of several court cases and was irrevocably annulled in 2022 by the Ploiești Court of Appeal.
Gabriel Resources issues official dispute notice to the president and prime minister of Romania
Gabriel Resources has sent an official dispute notice to the President and Prime Minister of Romania based on two bilateral treaties for the protection of investments to which Romania is a party, following ANRM’s announcement that the concession license for the Roșia Montană gold-silver area, initially issued in 1999 and extended in 2019, expired on June 20 and would not be renewed for a second time.
The company specifies that this issue is separate from its effort to annul the ICSID decision favorable to Romania from March this year, which dismissed Gabriel Resources’ claim for billions of dollars in damages for the alleged abusive blocking of the gold mining project by the Romanian state.
“The company considers this arbitrary and unjustified decision (by ANRM, to refuse the license extension) contrary to Romanian law, to be yet another outrageous violation by Romania of the rule of law and Gabriel Resources’ established investment rights protected by multiple bilateral treaties. The timing of the decision, just 3 months after the completion of the company’s arbitration proceedings against Romania, strongly confirms a calculated and politically motivated decision to irrevocably prevent Gabriel Resources and RMGC from developing the Roșia Montană project, without respecting legal rights and without just compensation,” say Gabriel Resources.
They consider it “significant” that Romania, in its defense at ICSID, continuously asserted the validity of the license, citing the 2019 extension, and argue that the ICSID decision in March was significantly based on the uninterrupted validity of the license. According to Gabriel Resources, ANRM tried to justify its refusal by claiming, among other things, that the documentation submitted by the company did not meet legal requirements. However, the Canadians argue that the documentation was similar to that submitted for the 2019 license extension and even more detailed.
According to ICSID regulations, after issuing the dispute notice by Gabriel Resources, there is a 90-day period during which the company must decide whether to initiate a new arbitration procedure. This period aims to allow the parties to reach an amicable resolution of the dispute. “Gabriel Resources has reiterated its willingness to engage in high-level discussions with the Romanian Government to reach a mutually agreeable solution. To facilitate this, Gabriel Resources has sent an official invitation to the Government for good-faith negotiations regarding the refusal to extend the license,” the Canadians conclude.
As of mid-year, Gabriel Resources had cash amounting to 2.5 million dollars, plus 1.5 million dollars set aside for the costs of filing the request to annul ICSID’s favorable decision to Romania in March. This follows the receipt of 3.25 million dollars from investors in May, from a private placement of shares. In April, the Romanian state, through ANAF and the Ministry of Finance, began enforcement proceedings against Gabriel Resources to recover the 10 million dollars in costs from the 9-year arbitration process in Washington. Gabriel Resources has contested the enforcement in court. Previously, the tax authorities had placed a lien on Gabriel Resources’ over 80% stake in RMGC, which was also contested by the company.
