Gabriel threatens Romania with billion-dollar lawsuit – by Eric Reguly (Globe and Mail – September 12, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

ROME — Canada’s Gabriel Resources Ltd. is issuing a stern ultimatum to the Romanian government: Approve the Rosia Montana gold mine or face a lawsuit for billions of dollars.

The strategy marks a stunning reversal for the Toronto Stock Exchange-listed company, which until recently had expected the government would approve a draft law that would allow the $1-billion (U.S.) mining development in Romania’s Transylvania to go ahead.

Then, on Monday, Romanian Prime Minister Victor Ponta said parliament would likely reject the draft law, a move that would kill Europe’s largest gold project. Gabriel shares went into freefall. The same day, Gabriel said it would “assess all possible actions open to it, including the formal notification of its intentions to commence litigation for multiple breaches of international investment treaties.”

On Wednesday, Gabriel chief executive officer Jonathan Henry vowed that the legal action would go ahead if the government does kill the mining project, and attached a big number to it.

“If the lower house [of parliament] does reject the project, we will go ahead with formal notification to commence litigation for multiple breaches of international investment treaties for up to $4-billion,” Mr. Henry said in a phone interview. “Our case is very strong and we will make it very public that Romania’s effort to attract foreign investment will suffer greatly.”

Mr. Henry said he expected the government’s upper house, the senate, on Tuesday to reject draft legislation that would allow the mine to open. But any decision, for or against, would not be binding unless the bill also goes to a vote in the much more powerful lower house, the chamber of deputies.

While Gabriel holds out some hope that the lower house will hold a serious debate that will result in a “yes” vote, Mr. Ponta suggested that it was game over for the Canadians.

Mr. Ponta noted that a majority of lawmakers oppose Gabriel’s plan, which would reopen and greatly expand mines that were exploited by the Romans almost 2,000 years ago. “As long as it is obvious that there is a majority opposed to the bill, it is useless to waste too much time on it,” he said.

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