Bulgaria's Cabinet sitting on a gold mine

Bulgaria's Cabinet sitting on a gold mine

by Sofia Echo

20th February 2006

CANADIAN company Dundee Precious Metals said on February 9 it might abandon its two gold and copper mining projects in Bulgaria if the Cabinet continued to delay environmental permits for the mines.

Dundee urged the Cabinet to review its projects and said the delay was a bad signal to foreign investors.

"We are concerned that if the current delay in administrative procedures is not corrected there is a risk of discontinuation of the projects - a situation that would be damaging to all concerned," Dundee said in a statement.

Dundee operates the Chelopech gold and copper mine in western Bulgaria and has a project for a gold mine near the southern town of Krumovgrad, where works should start after the Environment and Waters Ministry grants the necessary permits.

The company said that the Bulgarian authorities have not completed an approval process for the Ada Tepe mining project near Krumovgrad, due last November, although the Environment and Water Ministry's Djevdet Chakurov had said the company's environmental study of the mine complied with the country's laws.

"As a result, the schedule for development of the project may be at risk," Dundee said.

Dundee said last year it planned to invest about 200 million euro in the construction, exploitation, closure and recultivation of the Ada Tepe gold mine. The company wanted to start construction works at the beginning of 2006 and proceed with mining at the beginning of 2007.

The project has triggered public protests in and around Krumovgrad, where people fear the gold mine would be dangerous for the environment and the people in the town.
Dundee said that the Environment and Waters Ministry had postponed its final resolution on the environmental study of the Chelopech mine until March.

The Canadian company's resolve was, meanwhile, supported in a letter to Prime Minister Sergei Stanishev by the Bulgarian International Business Association (BIBA), the American Chamber of Commerce (AmCham) and the Union of Employers in Bulgaria.

The three organisations said Bulgarian institutions unreasonably hampered Dundee's projects, which was a bad sign for foreign investors.

The three business organisations, whose members are mainly foreign investors, are seriously concerned by the passive attitude of the state. This puts at risk not only the implementation of the projects, but also the economic development and employment situation in the respective municipalities, the statement said.