“There hasn’t been a single profitable state-run mining company in the past 20 years. Supposing we had invested billions of euros or US dollars (to turn Cupru Min to profit – e.n.), then we would have created a huge deficit,” Ungureanu told Romania’s public radio channel.
Ungureanu said Cupru Min, like other state-owned mining companies, has been nothing but a pump that sucked up government money just to stay afloat.
Asked whether Cupru Min’s buyer had detailed an investment plan for the company, the head of the government simply said that no one buys something only to sell it to a third party the next day.
“No one buys something just to sell it in their turn. I mean, yes, they can sell it, but the endgame is clearly to make a profit, because otherwise this is just money thrown out of the window,” Ungureanu said.
He said the sale price for Cupru Min was based on “an accurate evaluation.”
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. The purchase contract will be signed tomorrow (April 6), officials with Romanian state privatization office told Mediafax reporters.
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.