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Romanian Government Prevails in Legal Battle Against Gabriel Resources Over Failed Gold Project

Canada’s Gabriel Resources faced a setback as the Romanian government emerged victorious in an arbitration trial on Friday. The trial centered on Gabriel Resources’ claim for compensation following the failure of its ambitious plan to construct Europe’s largest open-cast gold mine in Rosia Montana, a town in western Romania.

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Gabriel Resources had initiated legal proceedings against Romania in 2015, seeking damages totaling at least $4.4 billion for losses incurred due to the stalled project. However, the Romanian government, which held a 20% stake in the venture, successfully defended against the claim at the World Bank’s International Centre for Settlement of Investment Disputes.

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The Romanian government’s decision to withdraw its support for the project in 2014, following widespread protests across the country, played a pivotal role in the legal battle. Socialist Prime Minister Marcel Ciolacu’s cabinet expressed gratitude for the favorable outcome, contrary to initial expectations of a negative ruling.

Gabriel Resources had secured concession rights to the Rosia Montana area in 1999 but faced fierce opposition from civil rights and environmental groups throughout the project’s development. Critics argued that the proposed mine would devastate ancient Roman mine galleries and villages, posing significant ecological risks.

The contentious project involved the use of cyanides and the excavation of four quarries, threatening to obliterate mountain peaks and displace residents from surrounding villages. Despite the considerable mineral wealth estimated in Rosia Montana, including 314 tonnes of gold and 1,500 tonnes of silver, concerns over environmental degradation and cultural heritage preservation fueled opposition to the venture.

In light of the legal ruling, Prime Minister Ciolacu pondered the possibility of revisiting plans for gold extraction in the region. However, UNESCO’s designation of the ancient Roman mining area in Rosia Montana as a protected World Heritage Site in 2021 presents a significant obstacle to any future mining endeavors, underscoring the complex intersection of economic development and environmental conservation.

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