The terms cannot be negotiated, reads the document.
The Executive refused to offer environment protection guarantees or pay damages for problems concerning environment protection and water administration.
Romania required Canada-based Roman Copper Corp., the company which won an outcry auction to buy Cupru Min with a EUR200.77 million bid late March, to create a bank deposit of EUR32 million for environment protection investments. The company refused this condition during negotiations late Friday and the privatization of the state-owned copper producer failed.
Environment protection investments have been evaluated by Romania at EUR32.27 million, of which at least EUR17 million to be ensured this year to extract non-ferrous and rare ores.
Technological investments have been estimated at EUR67.3 million, of which EUR61 million by 2015.
The prospective buyer will meet all environment protection requirements stated in privatization documents, and will carry out additional works to upgrade the Valea Sesei dam, rehabilitate road infrastructure and build new roads, in strict compliance with the current environment legislation, reads one of the draft contract’s terms.
If environment protection responsibilities require an investment higher than the one estimated initially, the buyer will ensure the difference.
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.
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.