The result of the negotiations between the Romanian state and Canadian Roman Copper for the privatization of Romania's copper mine Cupru Min show that the Romanian state is powerful and the privatization process will be re-started, with the existing environmental permits and with an evaluator, said Romania's Prime Minister Mihai Razvan Ungureanu (in picture).

The buyer, which was elected winner in the tender for Cupru Min failed to reach an agreement with the Romanian state, in a saga which kept local and international headlines, featuring contradictory statements. The Romanian PM said the contract negotiation “didn't work very well”.

Roman Copper won the bid over Cupru Min at the end of March this year, in a deal wroth some EUR 200 million, 3.5 times above the starting price.

The country's Economy Ministry said on April 7 that the negotiations failed as the buyer rejected the conditions imposed by Romania and that it was planning to re-start the privatization process, while the buyer claimed to have agreed in full with all clauses.

Roman Copper requested a meeting with Economy Ministry representatives to try to salvage the deal, but the talks were unsuccessful and, in the end, the meeting was to no avail. The group of investors representing Roman Copper included representatives of Valhalla Resources, Bayfront and the Turkish group KENZ Mining, as well as lawyers from local law firm NNDKP – one of the largest law firms in Romania – and a team of geologists, according to the Romanian media.

Roman Copper was set up in Canada in November 2011 by the investment bank Bayfront Capital Partners to participate in the Cupru Min privatization.

Cupru Min Abrud has estimated reserves of 900,000 tonnes of copper at Rosia Poieni. However, only a small amount of of it can be extracted every year. The investor needs to pay a royalty on copper extracted, of 4 to 6 percent, to the Romanian state. Romania’s Cupru Min ended 2011 with EUR 37.9 million in sales, 41 percent above the 2010 level, and a single functional production line of the existing four.

editor@romania-insider.com

(photo source: Gov.ro)