Romania Relaunches Sale of Copper Mine

After talks with the first Canadian buyer broke down unexpectedly, Bucharest said it was relaunching the privatization of the country's biggest copper mine

Romania on Wednesday announced it was re-launching the privatization of the country’s largest state-owned copper mine, after negotiations with a Canadian buyer failed unexpectedly.

In a last attempt to salvage the previous deal, representatives of Canada’s Roman Copper, the company that won the previous bid to take over Cupru Min, met on Tuesday with Romanian government officials.

But the talks were unsuccessful and, in the end the government announced it would re-start the privatization process.

Late last month, Roman Copper won the bid for the Cupru Min mine in a deal worth some 200 million euro, beating three competitors.

But after ten days of negotiations the privatization process stalled when the government on April 9 said it could not not agree on a contract to be signed that day with the Canadian company.

The conditions were that all privatisation contracts had to be made public, payment had to be settled within 30 days and the company had to put up a collateral deposit of 32.27 million euro as a guarantee of future environmental investment.

The Canadian company said it had “verbally” agreed to all the requests of the government, but it maintained that they were not initially included in the contract presented in the privatization package.

The state-owned mine has estimated reserves of 900,000 tonnes of copper, representing around 60 per cent of Romania's estimated copper reserves.

Facing a growing need for cash, Romania is largely dependent on foreign borrowing to finance its investment plans.

Bucharest is planning the sale of several energy concerns as part of a larger government plan to raise money under the terms of a €20-billion bailout loan led by the International Monetary Fund, IMF.

Romania is also planning to sell a minority stake in the natural gas producer Romgaz via the stock exchange, though this company is not yet listed.

On Tuesday the government also started a process to sell the state’s controlling 54.8 per cent stake in the main chemical company Oltchim.