Roman Copper goes to court against Romania after failed Cupru Min privatization

After the failed privatization of copper mine Cupru Min, the bid winner Roman Copper, with whom the state cancelled talks, has taken Romania to court. Roman Copper claims it has always acted in good faith during the talks for the Cupru Min privatization. The investor is trying to protect its rights after it won the bid in the Cupru Min privatization, according to its statement.

“Roman Copper expects the local authorities to respect their promise, follow the law and finalize the Cupru Min Abrud privatization process, in the terms agreed in the bid we won,” said Joel Hayes, the president of Roman Copper. As a result of inconsistent actions by the Romanian government and its relevant bodies, Roman Copper Corp. has engaged legal representation consisting of leading local and international law firms to ensure that the rights of its shareholders are protected. The Canadian company, backed by Valhalla Resources Ltd. and Bayfront Capital Partners, entered the tender announced by the Romanian State at the end of 2011. In March, Roman Copper Corp., was declared the tender winner of the Cupru Min Abrud SA privatization process. The tender was an open outcry auction, based on the criterion "best price": Roman Copper Corp. bid EUR 200.77 million, well above the starting price of EUR 57.3 million, and was declared the winner of the auction. The investor and the Romanian state representatives failed to achieve an agreement on the deal and the state stopped the process, announcing it will re-launch the privatization in four months. The then Prime Minister Mihai Razvan Ungureanu said the failed privatization showed the Romanian state is strong. 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 each 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