An embattled Canadian mining company said Thursday it will go after the Romanian government for blocking its attempts to develop a massive gold mine that could bring in billions of dollars.
Gabriel Resources is seeking $4.4 billion in damages over the long-stalled plans to develop Europe's largest gold mine in Romania's Rosia Montana region, in its complaint filed with the World Bank arbitration panel, the company said.
The $24 billion gold mine is the company's sole asset, and it has been battling for two decades for permission to develop it. The delays have caused Gabriel's share price to plummet nearly 100 percent from its peak in 2011, CEO Jonathan Henry said.
"We were a $3-billion company when Romania was telling us that everything was okay and we were going to get an environmental permit," he told AFP.
"Now Romania's not even talking to us."
The Romanian government granted the company a license in 1999 to mine in the area, where gold has been extracted since Roman times, but domestic political tussles continually stalled the project, making arbitration the last recourse, the firm said in a statement.
Gabriel Resources had hoped to produce 500,000 ounces of the precious metal annually from an area holding 17 million ounces, but local authorities have repeatedly refused permits and violated the company's commercial rights while ignoring efforts at conciliation.
Gabriel said it planned to lodge its claim on Friday with the World Bank's International Center for Settlement of Investment Disputes, taking the most significant step in a process that started in 2015.
The World Bank arbitration body is one of a small number global institutions created to resolve international business disputes. Business contracts frequently mandate that any complaints be handled by these panels, to avoid the domestic court system.
Romanian authorities will have until February to respond to the company's demand, with a hearing not expected until 2019, and a decision not until 2020.
Gabriel Resources share price on the Toronto Stock Exchange increased more than seven percent following the announcement to CAN $0.30.
The company had planned to use cyanide to extract the precious metal but pledged to meet strict environmental standards.
In 2000, a tailings dam at an unrelated project near Baia Mare, Romania burst, flooding local rivers with cyanide-tainted effluent in the worst European ecological disaster since the Chernobyl nuclear accident in the former Soviet Union.