Blessed with an abundance of minerals, for 1000s of years Romania’s Hunedoara County was always one of the Europe’s most industrialised and commercially active areas. However for various socio and political reasons, since peaking during the communist period (1990s), there has virtually been no regional economic development and consequently, the county has suffered significantly. This is reflected by having the highest unemployment rate of 9.6% in Romania, compared to the 5.5% national average.
Population Growth = Future Economic Sustainability
One of the highest risks to long-term European sustainability remains population decline as evidenced in Italy, Greece and parts of Spain. Regretfully this phenomenon is also significant in many parts of Romania. With limited opportunities and decades of economic stagnation, population demographics have changed in Hunedoara County as young people and families have simply left towns and villages to find better lives elsewhere. Now straddled with one of the oldest populations in the country, Hunedoara County is characterised by a shortage of skilled labour and infrastructure collapse. In fact none of the 7 county towns now boast a population above 60,000 people.
Romania’s population trends. These trends are mirrored in Hunedoara County, where population growth and investment are needed for economic sustainability.
Changing the Trend
With a resurgence in world mining to meet energy transition demands, and the necessity for European critical mineral security to protect the continent’s long-term economic future, the Euro Sun Mining (ESM) opportunity has the potential to be THE European test case for the gentrification of a region achieved through mining.
Aligned to modern environmental protection practices and international governance standards, this test case will also be judged by its ability to deliver responsible mining practices that limit environmental impacts and create a positive legacy.
Responsible mining involves ethical practices, transparency, and accountability at every stage of the mining process, from exploration to post-closure, and strives to meet the needs of current stakeholders without compromising future generations.
The Benefits
The benefits that the ESM project will deliver for community stakeholders revolve primarily around economic opportunities, infrastructure development but overall, improvements to the quality of life. Holding the second biggest measured European deposit of copper in a region steeped in mining tradition, the project is now ripe for execution. In what is arguably one of Europe’s most principled investment projects, and with the backing of the local communities, the project offers minimal environmental disruption and will add immediate value to the surrounding communities.
Economics
ESM’s Rovina Valley Project will generate direct employment for over 2000 local Romanian residents, ranging from skilled labour positions to entry-level jobs over a sustained period. Indirect jobs will also be created in supporting industries such as transportation, food services, and equipment supply.
As miners and their families settle into the area, local businesses, including retail stores, restaurants, and service providers will benefit from increased demand. Related sectors also benefit from economic stimulation. Typically these industries include the construction, manufacturing, and engineering sectors due to the need for mining infrastructure, equipment, and logistics.
Crumbling infrastructure with large scale population decline is evident throughout the Hunedoara County as economic opportunities have dwindled since mining operations ceased.
Infrastructure Development
The ESM opportunity will require investments in building and transport networks which ultimately benefit the entire community by improving accessibility and transportation. Energy and water supply will also come into focus, and if any improvements are necessary, these will then be shared with surrounding communities.
Social and Community Development
In accordance with international Corporate Social Responsibility (CSR) practices, ESM will continue to contribute to the development of local health, education, sports and cultural services. Various programmes supported in the past for schools, clinics, heritage sites, sports clubs and scholarships will be ramped up as the economic benefits of extraction filter through the system.
One of the most important benefits will be the project’s skills development and capacity building programmes aimed to build the skilled workforce, to the advantage of the broader business community.
Increased Government Revenues
In accordance with Romanian financial legislation, the Rovina Valley Project will generate significant tax revenues and royalties to be paid at local, county, and national levels. These funds will be used for public services, infrastructure, and community programs.
The payments also allow for long-term economic diversification as the influx of funds into local economies from taxes and royalties can be used to support other sectors, potentially leading to a more diverse and resilient economy over time.
Local Empowerment
The ESM opportunity will naturally support local business for the supply goods and services. This encourages entrepreneurship and the creation of supporting small and medium-sized enterprises (SMEs). Local village centres have also been used in the past by ESM to actively engage with the local communities in decision-making processes to prioritise needs.
With an influx of workers and investment into the region, improvements to housing standards, either through new residential projects or by refurbishing existing structures characterises new mining projects. As these communities grow, additional amenities such as recreational facilities, markets, and public spaces may also become available, improving the overall quality of life.
With the second biggest measured copper and gold resource in Europe, and a project ready to start, the opportunity to mitigate decades of economic stagnation and population decline for the benefit of people of Hunedoara County can be realised quickly. The need for critical mineral security in Europe is arguably the catalyst to kick-start development.
Long-Term Economic Opportunities
The end-of-life or rehabilitation of the mine site once the mine closes will offer other opportunities for land use such as agriculture, tourism, or renewable energy projects. With the improved infrastructure, this reset can create sustainable economic opportunities for future generations. This includes lasting impacts in infrastructure (e.g., roads, hospitals, schools) that continues to benefit the community long after after the mine’s operational life ends.
Putting European Mining on the International Stage
The ESM opportunity places Romania firmly on the European copper and gold trading stage which will also enhance trade opportunities beyond the mining sector. Coupled to this, with foreign investment, ESM attracts additional foreign direct investment (FDI) into the region, again creating further opportunities for economic development.
THE Perfect Test Case
With the introduction of the Critical Raw Materials Act and a fully-developed project plan, ESM’s Rovina Valley Project is well positioned to start delivering the perfect economic test case in regional upliftment. Once final mining permitting approvals are gained, and through responsible mining practices, the project is set provide both long-term economic and community prosperity to Romania’s Hunedoara country and overall, support critical mineral security for Europe.
Through the ESM opportunity, the drivers to ignite the Hunedoara County economy are primed, it is now up to European regulators to light the fire.
References:
- https://www.cia.gov/the-world-factbook/countries/romania/
- https://www.worldometers.info/world-population/romania-population/
- https://population.un.org/wpp/Graphs/DemographicProfiles/Line/642
Written by Richard Dolamore, with views expressed his own