Despite the scandal surrounding the privatization of Cupru Min to an unknown Canadian company and then the overturn thereof nobody has paid any attention to who the company buying all the copper from Cupru Min is so far.
According to the information provided by the Economy Ministry, the buyer in question is a limited liability company, Ronefer Voluntari SRL, a six-employee business, which posted EUR39.4 million revenue in 2011.
ZF talked with Maria Gherghe, 53, the majority shareholder of Ronefer (95%), who invited ZF over to talk about her business but would not have her photo taken.
“I have nothing to hide. I will explain to you why a company headquartered in an apartment building can successfully engage in export and why I do not need a large staff,” Maria Gherghe says.
The meeting took place in an apartment in a residential building close to the Obor market of Bucharest, which did not have any logo by the front door.
She buys the entire copper concentrate production of Cupru Min, Romania’ largest copper producer via Ronefer Voluntari, in which she owns 95%. Cupru Min has been in the spotlight lately because of the privatization process and the large copper deposits it mines in Rosia Poieni (central Romania). This mine could yield 0.9 million tons of copper currently valued at EUR5.6 billion and 36 tons of gold, valued at EUR1.5 billion.
Gherghe says she sells the Cupru Min production to some of the leading traders of the world, such as Trafigura, Marc Rich and the Swiss-held Werco Trade, and then the copper concentrates go to China via Constanta harbor or to Bulgaria by train.
Marc Rich has been doing business with Romania for a long time, as he is one of the most powerful but also controversial names in the metal, grain and oil trade. He was accused of tax evasion in the US but the then president Bill Clinton pardoned him.
She says she used to bid against the “copper bankers” Horia Simu and Horia Pitulea, owners of Cuprom during the auctions organized by Cupru Min to sell its copper concentrates. Horia Simu and Horia Pitulea are two powerful businessmen in Romania who have kept a low profile throughout this whole privatization scandal, declining comment.
The two men, who had worked for Citibank at some point, had bought Cuprom in the previous decade, which was processing the copper supplied by Cupru Min, hence their nickname of “copper bankers” that the media gave them. The two bankers also had a partnership with the government to operate Cupru Min at some point.
Judging from all these facts, the “copper bankers” used to fight over Cupru Min’s copper with Maria Gherghe. The answers to many questions about this privatization may very well rest with either Horia Simu and Horia Pitulea or with Maria Gherghe, all of whom have stayed out of the public eye thus far. Horia Simu declined comment about the privatization, merely saying he had nothing to do with it.
The company Maria Gherghe owns has six employees and exported 167 million lei (EUR38.22 million) worth last year, RON149.3 million of which accounting for copper concentrates sold by Cupru Min. Ronefer posted EUR612,000 profit in 2011, up about 27% compared with the previous year. In 2010, it posted RON136 million revenue and RON2 million in net profit, while in 2009 revenue stood at merely RON11.1 million and the net profit reached RON1.3 million. The ten-fold increase in revenue in 2010 was because of the restart of Cupru Min’s production and the termination of the partnership contract of Cupru Min with the “copper bankers”.
How does Maria Gherghe explain her ending up buying Cupru Min’s entire production?
“Nobody had showed any interest in Cupru Min for a long time and that’s probably why I got to buy the entire production by myself, because I have no backing and I’ve never had any political involvement with anyone. I don’t need many employees to export because I have contracts signed with specialized companies that handle cargo transportation by truck or train, hedging against the copper price fluctuation risk, collection, inspection and preparation of samples and safety,” she said, adding, “It’s no easy job and is a huge responsibility. I’m almost always on the road and I am only free of the responsibility for the cargo when it is loaded on the boat.”
Maria Gherghe says she had the money to start her own business because jobs in the non-ferrous metal industry were very well paid before the fall of communism.
As for the privatization of Cupru Min to Roman Copper Corp, a vehicle established by Bayfront Capital Partners, which offered EUR200.8 million during the bidding for 100% in the Romanian company, but was eventually disqualified for failing to prove it has the money for environmental standards compliance investments (EUR32 million) she says:
“Back when I was working for the Metallurgy Ministry there was no company, which did not have its creditworthiness checked. Normally, the Intelligence Service should have checked all companies participating in the privatization auction of Cupru Min. I did not expect anyone to participate in it because no one had shown any interest in the company until then.”
(English version by Loredana Fratila-Cristescu)