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The Baia Mare Tailings Retreatment Project is run by Aurul SA, a Romanian-Australian
joint stock venture company. The Australian company, Esmeralda Exploration,
owns 50 percent, the Romanian State Mining Agency, Remin SA, owns 45 percent
and
five percent is held by a "number of small local Romanian companies."
Esmeralda retains
management of the project with an annual management fee of four percent.
Mining in the Baia Mare area goes back to Roman times. Remin SA has produced lead, zinc, copper, gold and silver in the area for some sixty years and still processes some 350,000 tonnes per year from its mines. "We believe that the area still remains one of Europe's most untouched and promising prospective areas," said Aurul before the spill. Aurul got into the deal expecting to produce 50,000 ounces of gold as well as 250,000 ounces of silver from the project. "It has taken nine years and considerable patience to bring the project to fruition," said Esmeralda after the deal was made, adding that they "overcame the numerous obstacles that face foreign start-up operations in Romania." To get Romanian government support for the deal, Esmeralda raised project financing of USD 17 million from Australian bank Rothschild & Sons and German Dresdner Bank AG. "We also take comfort that Esmeralda has taken out comprehensive political risk insurance," they add. Earlier, the European Bank for Reconstruction and Development (EBRD) decided not to finance the mine. "The Bank did hold discussions with the company in 1994-95 and again in 1997-98, but it took no further action," said the EBRD. Esmeralda says that it held a public forum to present the project's activities and risks. "Keen interest was shown by ecological societies and the public and some political groups used the forums to gain publicity with the media reports being hostile toward the project," says Esmeralda. Construction work began in October 1997 and was completed by March 20, 1999, with the first gold pouring on April 9, 1999. Work included the design and construction of a number of emergency overflow ponds. "These ponds have been constructed to cater to the strict environmental criteria set down for the process plant," said Esmeralda. A tailings dam was also constructed.
The facility reprocesses ore material from
Remin's local gold mines. The process, "cyanide
heap leach mining," is highly controversial, used to
extract small amounts of gold from large amounts
of "low-grade" ore. A cyanide-and-water solution is
sprayed over the ore, binding the gold to the Esmeralda also has mining and exploration rights to the immediate surrounding area. Explorations have already uncovered six priority targets, from which ore will be blended into the tailings feed at Baia Mare, "considerably boosting production" there. The company has mining concessions in the entire surrounding area, covering 20 square kilometres, and was also negotiating for 55 more square kilometres. Esmeralda says that it is a "low-cost producer" which places them "at the lower end of the industry's cost curve and allows the company to maintain attractive profit margins during these times of historically depressed gold prices." Following construction completion, they said: "In general, the site safety standard was maintained at a high level, although it must be mentioned that the existence of significant cultural barriers required that additional management effort be applied in order to achieve the standards that would be expected in Australia," said Esmeralda. The WWF says that other accidents have occurred at the site since operations began in 1999. Three weeks into operations, a broken pipe contaminated four hectares of soil — an event that was never made public. Former Aurul chief executive Philip Evers admitted that the company's predecessor had been responsible for cyanide leaks, and that Aurul had been fined for minor offences before the February disaster. A Romanian official report stated that Aurul experienced no "major accidents" before the spill.
July 1997- Construction approvals achieved |
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The
Baia Mare Project - Timeline |
     
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