In 2011, the company had its best first half in years, posting a RON26 billion gross profit, after sales rose to RON75 million, Cupru Min officials said.
The company ended 2010 with a RON36 million gross profit and RON130 million sales.
Still, the debt that had accumulated in previous years when the company halted operations on several occasions, drew the attention of the International Monetary Fund, which requested that government put it on the privatization list.
The government decided to comply and put Cupru Min up for sale, as it has outstanding debt worth about RON60 million, especially to power supplier Electrica. The company also needs to invest about EUR16 million to EUR18 million to address current environmental problems and comply with European Union requirements.
The Economy Ministry decided to go by a government decision of 2006 and sell Cupru Min Abrud by open outcry auction, thus ignoring the National Reform Program for 2011-2013 the government approved in April 2011, which said it would be privatized via the stock exchange in the second half of this year.
The ministry officials did not reveal the name of the company, which conducted the valuation of Cupru Min, merely saying it was a member of the National Association of Valuers in Romania.
The liquidator of copper mining company Moldomin Moldova Noua recently sold to Switzerland’s Mineco said copper reserves are not taken into account when a company in this business is sold.
The amount of copper that could extracted from the Rosia Poieni mine of Cupru Min might reach 3.6 million tons, which would be worth EUR20 billion at the current market price of about $7,600/ton.
Yet the company can only mine a limited amount of copper every year, no more than 6,000 tons, with the existing equipment. The management says that if EUR120 million investments were made, production would go up to 21,600 tons. Therefore sales would triple to about EUR118 million a year.
The companies interested in Cupru Min include Canada’s Barrick, world’s largest gold producer, and Mineco. Cupru Min is entirely state-held via the Economy Ministry. (EUR1=RON4.315)
(English version by Loredana Fratila-Cristescu)