Canadian firm seeks arbitration over Romania gold mine

A general view of Carnic in Rosia Montana village, 430km west from Bucharest on September 20, 2011 (AFP Photo/Daniel Mihailescu)

Bucharest (AFP) - A Canadian company said Wednesday it is seeking damages from Romania through international arbitrage after being blocked from creating an open-pit gold mine over environmental concerns.

"Gabriel Resources Ltd announces that today it has filed a request for arbitration before the World Bank's International Centre for Settlement of Investment Disputes (ICSID) against Romania," the company said in a statement.

The company, which holds an 80 percent stake in the Rosia Montana Gold Corporation, accused Bucharest of violating international treaties.

Gabriel Resources has been trying for 15 years to get an environment ministry permit to launch the project, which would entail using cyanide and levelling four mountains in the historic area of western Transylvania.

The operations to extract 300 tonnes of gold and another 1,600 tonnes of silver over 16 years would also destroy well-preserved 2,000-year-old underground Roman mining galleries -- a potential UNESCO World Heritage site.

In addition, environmentalists warn that the use of some 12,000 tonnes of cyanide each year in the project could contaminate ground water.

Gabriel has claimed the mine would bring hundreds of jobs and boost Romania's economy.

"Through its actions and inactions, Romania has blocked and prevented implementation of the project without due process and without compensation, effectively depriving Gabriel entirely of the value of its investment," the company said.

It said it has sought a resumption of the talks several times in recent months to no avail.

"Gabriel is seeking the full relief owed to it under the provisions of the treaties," it said, without mentioning the sum it is seeking.

Parliament in late 2013 rejected a bill introduced by the government that would have paved the way for the mine.

The vote followed an unprecedented nationwide wave of opposition to the project, and it has been on hold ever since.

Gabriel had earlier said it might seek damages totalling $4.0 billion (3.6 billion euros) if the bill failed.