Romania updates mining law

In 1998, as part of an effort to revive its struggling economy, the government of Romania enacted a new mining law. The statute allows both foreign and Romanian entities to obtain exploration and exploitation concessions in the mineral-rich nation.

The mining law covers all minerals contained within a concession. An exploration concession can be obtained for up to five years, with a right of renewal for a further three years. After the first two years, the holder must relinquish half the ground, followed by a further half after four years.

An exploitation concession is granted for an initial 20 years and is renewable for further 5-year terms. An environmental impact study and rehabilitation plan must be submitted and approved before an exploitation concession is granted.

An exploration concession can be converted into an exploitation concession once a feasibility study has been filed and approved.

The government of Romania has agreed to take responsibility for environmental liabilities at all mining projects it privatizes. Accordingly, companies such as Gabriel are required to carry out careful baseline studies to ensure that all areas requiring remediation are well-documented.

All producing mines are subject to a 2% net smelter royalty payable to the government. The country offers various economic incentives, such as exemptions from value-added tax and custom duties for import of capital assets at new mines. There are no restrictions on repatriation of capital.

Most of Gabriel’s projects are in “disadvantaged zones.” Companies working in these areas are exempt from paying income tax for a period of between three and 10 years.