Bid winner for Romania's Cupru Min pulls out big guns to save deal but talks fail, privatization to re-launch

Roman Copper, the company that won the bid to take over Romania's copper mine Cupru Min but which failed to reach an agreement with the state, met representatives of the country's Economy Ministry in an attempt to salvage the deal. However, the talks were unsuccessful and, in the end, the meeting was to no avail. The state has announced it will re-start the privatization process, as previously stated.

A 17 strong delegation of representatives from Roman Copper attended the meeting, according to Mediafax newswire, quoting sources that took part in the discussion. The group of investors 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. Bayfront is the owner of Roman Copper and Valhalla Resources, with mining activities in Romania and Turkey, has been mentioned in the media as the possible owner of Bayfront Capital. In March this year, Valhalla Resources entered into a strategic alliance with Kenz Mining, creating a company called Valken. More about the strategic alliance here. The Calinos Group, based in Istanbul/Turkey, is the largest of Kenz Mining's founders. The group is active in media, agriculture, and mining industries in Turkey, the Balkans and Central Asian countries. Roman Copper's management said a week ago it wanted to have a meeting with Romania's Prime Minister and with the Economy Minister, to clarify the misunderstandings in the privatization process. This came after the Economy Ministry and the winning company had issued contradictory statements. The Ministry said the negotiations ended without any agreement and the buyer refused some clauses, while the buyer claimed to have agreed in full with all clauses. Roman Copper was set up in Canada in November 2011 by the investment bank Bayfront Capital Partners to participate in the Cupru Min privatization. The company won the bid for copper mine Cupru Min Abrud in Romania, in a deal worth some EUR 200 million. Three other companies signed up for the bid: Australian OZ Minerals, Bulgarian Ellatzite-Med AD and Dundee Holding from the Netherlands. The Bulgarian firm was disqualified just before the start of the bid. The starting price in the bid on March 26 was EUR 57.3 million. 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.