Romanian Economy Minister Lucian Bode announced at the end of negotiations late Friday that Romanian authorities asked the Canadian company to make a bank deposit of EUR32.27 million to guarantee environment investments, pay EUR200.7 million for Cupru Min shares within 30 days from obtaining an environment permit and an authorization from the Competition Council.
Romania also demanded that the privatization contract be made public immediately.
“Roman Copper did not accept these conditions. The Economy Ministry will analyze the situation and is ready to resume privatization procedures, said Bode.
The privatization contract was to be signed by Friday, April 6.
The Economy Ministry said in a press release Saturday afternoon that negotiations with Roman Copper on the privatization of Cupru Min are irrevocably ended, as the Canadian company rejected the conditions laid down by Romanian authorities.
Romanian Prime Minister Mihai Ungureanu said Thursday the government had to sell the copper producer Cupru Min because the company wasn’t profitable and turning it around would have entailed a huge effort from the state budget.
According to an official document obtained by Mediafax, Cupru Min’s appraisers only factored in the company’s assets value and the potential quantity of copper that could be mined following a series of investments which were evaluated by Cupru Min itself and not by an independent evaluator. The value of the estimated copper ore was not considered when the auction price was set.
Late March, Canadian-based Roman Copper Corp. won an outcry auction to buy Cupru Min with a EUR200.77 million bid, over threefold higher than the EUR57.3 million starting price. Roman Copper outbid Australian Oz Minerals and Dutch-based Dundee Holding BV in the auction.
Cupru Min is Romania’s largest copper producer. The company’s main asset is the Rosia Poieni mining perimeter, which is estimated to hold 60% of the country’s copper reserves. The company has a social share of 24.18 million lei (EUR5.53 million) and had its shares in the hands of the Economy Ministry.
Roman Copper Corp. is founded by Canadian investment banking company Bayfront Capital Partners.