CupruMin privatization Take 2: Romania to seek an investor for association, minimum funding EUR 50 mln

copperRomania will have another try at privatizing its copper mining company CupruMin, after the failed attempt last year, but this time the privatization will take the form of an association with a private investor, rather than a sale. The investor would bring in cash, and the company would provide the final product.

The Government has asked the Economy Ministry to find an investor, either a trader or a producer, which would finance the company with at least EUR 50 million. CupruMin needs new equipment, as well as needing to spend on environmental improvements and expanding its exploitation area. The privatization however will have to be done as an association with an investor, and not as a regular buy out, as the company is involved in several law suits, including with the first winner of the failed privatization, Roman Copper.

“On the investors side, we expect them to supply a certain amount if there are traders, or even bring in technological infrastructure, if they are producers. The funds will be used to modernize equipment, pay out for environmental improvements and continue expansion. A minimum would be at some EUR 40 to EUR 50 million,” said Romania’s Economy Minster Varujan Vosganian.

He did not give any details about how this investor will be selected, but said the deadline for identifying an investor is mid-2013.

Romania offered CupruMin in spring last year for some EUR 57.3 million, but the privatization was canceled because of misunderstandings with the winner of the bid, Roman Copper, which later sued the state. Privatizing CupruMin is on Romania’s to-do list as agreed with the International Monetary Fund, the country’s main international creditor.

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