MINING INDUSTRY OF ROMANIA MAI 2006

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MINING INDUSTRYOF ROMANIA MAI 2006
MINISTRY OF ECONOMY AND COMMERCE General
Directorate for Mineral Resources

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THE AREAS COAL MAINING SPREADING
1 CNH SA PETROSANI 2 SNLO Tg. Jiu 3 SNC
Ploiesti 4. SC BANAT Anina 5 COMPLEX EN.
ROVINARI 6 COMPLEX EN. TURCENI 7 COMPLEX EN.
CRAIOVA
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4
2
5
3
6
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THE AREAS OF ORES , SALT, MINERAL WATER SPREADING
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1 CN MINVEST DEVA 2 CN REMIN BAIA MARE 3 SC
CUPRUMIN ABRUD 4 SC MOLDOMIN MOLOVA NOUA 5 SC
MINBUCOVINA V. DORNEI 6 SC BAITA STEI
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6
3
2
4
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THE PRESENT STRUCTURE OF THE MINING SECTOR
There are 17 mining companies/societies, as
follows

• for cool  1 national company, CNH Petrosani
• 2 national societies, SNLO Tg. Jiu and SNC
  Ploiesti
• 1 commercial society, Miniera Banat Anina
• 3 energetical complexes Rovinari, Turceni si
  Craiova
• for nonferrous ores 2 national companies, C.N.
  MINVEST S.A. Deva si C.N. REMIN S.A. Baia Mare
• 4 commercial societies, S.C. MOLDOMIN S.A.
  Moldova Noua, S.C. CUPRUMIN S.A. Abrud, S.C.
  Baita S.A. Stei si S.C. Bucovina Min Vatra Dornei
• for uranium 1 national company, CNU Bucuresti
• for salt  1 national
  society, S.N. Sarii Bucuresti
• for mineral waters 1 national society,
  SNAM Bucuresti
• For closing maining 1 commercial society SC
  CONVRESMIN SA Bucuresti

The current mining activity is ongoing in 88
mines, open pits and processing plants

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THE STAGE OF REFORM IN MINING SECTOREvolution of
coal and salt production
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THE STAGE OF REFORM IN THE MINING SECTOR
Evolution of nonferrous concentrates production
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THE STAGE OF REFORM IN THE MINING
SECTOREvolution of employees number

-persons nr.-
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THE STAGE OF REFORM IN THE MINING SECTOR
Evolution of redundant people from the beginning
of the restructuring process in the mining sector
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THE STAGE OF REFORM IN THE MINING SECTORThe
situation of the mines approved by the Government
for the ceasing activity
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STRATEGIC OBJECTIVES OF THE MINING SECTOR

• TO DEVELOP MINING PRODUCTS ACCORDING TO THE
  MARKET DEMANDS
• CUTTING DOWN DIRECT INVOLVMENT OF THE GOVERNMENT,
  IN SUSTENABILITY MINING ACTIVITIES, BY GRADUALLY
  REDUCING OF THE STATE ALD
• UNDERTATE OF MINING ACTIVITIES IN COMPLIANCE WITH
  MINING PROTECTION CRITERIA
• ALLOTING THE FUNDS FOR MINING CLOSURE AND
  ENVIRONMENTAL REHABILITATION (FROM BUGETARY AND
  EXTERNAL SOURCES)
• MITIGATION OF THE SOCIAL IMPACT DUE TO MINING
  CLOSURE AND REDEVELOPMENT OF THE MINING AREAS

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RESTRUCTURING OF THE MINING SECTORMAIN
OBJECTIVES

• REASSESS OF THE MINING PERIMETERS AND
  CONCENTRATION OF THE ACTIVITY IN THE MOST
  FAVOURABLE AREAS
• ALLOTING OF THE BUGETARY CAPITAL EXPENSES ONLY
  FOR THE MINING OBJECTIVES HAVING A GOOD VIABILITY
  AND PRIVATIZATION CHANCES
• CUTTING DOWN SUBSIDIES AND SOCIAL TRANSFER FUNDS
  IN THE ORE AND UNDERGROUND MINES FOR LIGNITE,
  STARTING WITH YEAR 2007
• ALLOTIONG OF THE SUBSIDIES FOR HARD COAL
  PRODUCTION TILL YEAR 2010, ACCORDING TO THE
  PROVISIONS OF THE CE DIRECTIVE 1407/2002.
  REGARDING THE STATE AID FOR COAL SECTOR
• FINANCIAL RESTRUCTURING OF THE MINING COMPANIES /
  SOCIETIES, BY
• - SEPARATION OF THE NONVIABLE UNITS, IN ORDER TO
  BE CLOSED
• - LEGAL LIQUIDATIOIN OF THE MINING UNITS
  APPROVED BY THE GOVERNMENT TO BE CLOSED
• - COMPENSATION TILL YEAR 2006 OF THE LOSSES AT
  THE MINIES WHERE REVENUES ARE LESS THAN
  EXPENSES
• SOCIAL PROTECTION FOR REDUNDANT PERSONNEL FROM
  THE MINING ACTIVITY

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RESTRUCTURING OF THE MINING SECTOR(CONTINUATION)

• RESTRUCTURING OF PRODUCTION CAPACITIES AND
  IMPROVEMENT OF TECHNOLOGICAL PERFORMANCES, CEASE
  OF ACTIVITY AND CLOSURE OF NON-VIABLE MINES
• PRIVATIZATION OF VIABILE MINES AND OF THOSE WITH
  REVIVAL POTENTIAL TO BECOME VIABLE. ENSURE THE
  FINANCING SOURCES NEEDED FOR THEIR DEVELOPMENT
  AND MODERNIZATION
• UNDERTAKE OF MINING ACTIVITIES IN COMPLIANCE WITH
  MINING PROTECTION CRITERIA
• - MAKING THE INVENTORY OF THE ENVIRONMENT
  DISTURBANCES PRODUCED SO FAR
• - ESTABLISH THE OBLIGATION FOR THE MINING
  COMPANIES / SOCIETIES
• - AND FOR THE PRIVATE LICENSE HOLDERS, FOR
  ENVIRONMENT REHABILITATION
• - PROMOTE AN ENVIRONMENTAL MANAGEMENT AT
  EUROPEAN STANDARDS

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SOCIAL PROTECTION OF THE PERSONNEL AFFECTED BY
RESTRUCTURING PROCESS

• BASIC ORIENTATIONS
• FOR THE MINES THAT ARE OR COULD BE VIABLE, THE
  PROTECTION MEASURES WILL BE A PART OF
  REHABILITATION PLAN OF THE MINE
• FOR THE MINES THAT WILL BE CLOSED, THE MEASURES
  OF THE SOCIAL PROTECTION WILL BE OBJECT OF THE
  PLANS IMPLEMENTED BY MINISTRY OF LABOUR SOCIAL
  SOLIDARITY AND FAMILY AND NATIONAL AGENCY FOR
  OCCUPY OF LABOUR FORCE
• MAIN MEASURES
• PROMOTION OF INDIVIDUAL AND COLLECTIVE DIALOGUE
  FOR THE INFORMATION OF EMPLOYEES WITH REGARD TO
  THE CURRENT AND FUTURE SITUATION OF THE COMPANY
• PROFESSIONAL TRAINING FOR THE STAFF EMPLOYED IN
  THE MINING INDUSTRY TO INCREASE HIS CHANCES ON
  THE LABOR MARKET
• SOCIAL PROTECTION OF MINERS LAID OFF
• SUPPORT COMMUNITY WORKS PROGRAMS, HAVING AS
  OBJECTIVE TEMPORARY EMPLOYMENT OF LAID OFF
  PERSONS IN ORDER TO KEEP THEM ACTIVE AND
  FACILITATE ACCESS TO THE LABOR MARKET
• STIMULATING EMPLOYERS TO HIRE PEOPLE LAID OFF
  FROM THE MINING ACTIVITY, WITH A VIEW TO THEIR
  REDEPLOYMENT, TRAINING AND KEEPING ACTIVE, IN
  ORDER TO MAINTAIN THE ABILITIES TO FIND A NEW JOB
• ESTABLISHING VIABLE ALTERNATIVES FOR YOUTH
  GENERATION TO PROVIDE CONDITION FOR THEIR
  DEVELOPMENT IN THE SAME AREAS

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THE STRATEGY OF THE MINIG INDUSTRYThe economic
reconstruction of the affected mining arreas

• Ensuing the local and commentary consensus for
  changing the mining closure process and the
  ecological rehabilitation, into an action aimed
  to attracting investments
• Transforming the localities from areas where the
  existing mining facilities should be closed into
  favourable zones for private sector
• Improvement of the environment and of the
  infrastructure by execution of public works
• Reusing of the available spaces, assets and
  surfaces for development of alternative economics
  activities
• Ensure the economic frame in order to facilitate
  the financing processes and actions for
  development of new businesses
• Making use of local resources from agriculture,
  forestry fishery and touristy sectors
• Improvement the living conditions by
  rehabilitation of the housing and public
  services
• Promoting a positive image of the mining regions,
  in order to attract investors and investments
• Reviving the viable mining units and making free
  economic activities in the region

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THE STRATEGY OF THE MINING INDUSTRYFinancial
resources for the acomplishment of the strategys
objectifs
Mill.
USD
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THE STAGE OF REFORM IN THE MINING SECTORThe
impact of the mining restructuring on the mining
zones economy and on their habitants

• Results from the poverty evaluation study in the
  mining zones, financed by the BIRD
• Decline of the economic activities comparing to
  1997 was of above 35. In some zones as Jiu
  Valley, Motru, Balan, Borsa, Baia de Aries,
  Zlatna the decline was of over 55.
• Reducing of the employed people in the affected
  areas with over 40 compared to 1997.
• Reducing of the populations income in the
  affected areas with 25 compared to 1997.
• Increasing by 28 of the number of families whose
  condition are bellow the minim standards.

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THE STAGE OF REFORM IN THE MINING SECTORThe
impact over redundant people

• 7 have not job
• 30 can find a temporary job (without working
  contract)
• 5 have developed their own business
• 46 have a stabile job
• 12 have been normally retired, with anticipation
  or for the illness cases

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THE PERSPECTIVE FOR DEVELOPMENT OF THE MINING
INDUSTRYThe tendencies in the development of
mining industry at the international level

• COAL INDUSTRY
• Will cover 23 from the global energy needs
• Will generate 38 of the world electricity in
  the period 2007 - 2025
• For the hard coal marked its estimated a medium
  growth of about 2 annually
• The marked for lignite will remain constant until
  2020
• The delivery prices until 2020
• For energetical hard coal 2,8-3 USD/GJ price
  at the beneficiary
• For lignite 2,6-2,8 USD/GJ price at the
  beneficiary

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THE PERSPECTIVE FOR DEVELOPMENT OF THE MINING
INDUSTRYThe tendencies in the development of
mining industry at the international level

• Mining ores industry will be under a strong
  influence till year 2020, by 
• Transforming of European Union into the biggest
  region for processing and consumption  
• Transforming of Eurasia region (of former Soviet
  Union) in the most important producer and
  exporter of minerals
• Renouncing at nonferrous metals mining in Western
  Europe
• Privatisation of ores open-pits in Easter Europe
• Putting into exploitation the gold deposits
  (Poland, Romania, etc.) economically viable
• Nonferrous metals market
• Its estimated an increasing tendency for demand,
  of about 3 - 4/year
• Only 30 of this demand could by covered by
  increasing of the mining production.
• Price levels at the international market
• -cooper in concentrates 1550 /t in year 2000
  3850 /t in year 2005
• -zinc in concentrates 650/t in year 2000
  1490 /t in year 2005
• -gold in concentrates 319/ounce in year
  2000 519 /ounce in year 2005

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THE PERSPECTIVE FOR DEVELOPMENT OF THE MINING
INDUSTRYProduction
if will be a successful privatization process
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CONCLUSIONS

• RESTRUCTURING OF THE MINING INDUSTRY IS A VERY
  IMPORTANT OBJECTIV OF THE GOVERNMENT, IN THE
  CONTEXT OF HIS GENERAL SOCIAL AND ECONOMIC
  POLICIES REGARDING THE ACCESSION OF OUR COUNTRY
  TO THE EUROPEAN UNION
• RESTRUCTURING PROCESS IN THE PERIOD 2004 2010
  HAS TAKING IN CONSIDERATION THE OBJECTIVES OF
  THE MINING STRATEGY APPROVED BY THE GOVERNMENT
  DECISION NR. 615/2004
• THESE OBJECTIVES ARE ORIENTED TO THE PRINCIPLES
  OF A SUSTAINABLE ECONOMY DEVELOPMENT, ESPECIALLY
  REGARDING PROVIDING OF RAW ENERGETICAL RESOURCES
  FOR THE ENERGY SECTOR
• STATE INVOLVEMENT SUPPORTING THE MINING INDUSTRY
  WILL BE
• - TOTALLY ELIMINATED STARTING WITH YEAR 2007,
  FOR THE MINING UNITS FROM ORE SECTOR AND
  UNDERGROUND LIGNITE MINES
• - TOTALLY ELIMINATED STARTING WITH YEAR 2011,
  FOR THE HARD COAL SECTOR (ACCORDING TO THE
  EC DIRECTIVE 1407/2002
• - DESTINED FOR THE MINING CLOSURE PROGRAMMES OF
  NON VIABILE MINES AND FOR ENVIRONMENTAL
  REHABILITATION OF THE AFFECTED AREA, ACCORDING TO
  THE REGULATIONS OF EUROPEAN UNION

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CONCLUSIONS(CONTINUATION)

• VIABLE MINES AND OPEN PITS WILL BE MODERNIZED, BY
  THEIR OWN SOURCES, BY ATTRACTING PRIVATE FUNDS
  AND / OR BY PRIVATIZATION PROCESS
• FORMER MINING AREAS WILL BE REHABILITATED IN
  ORDER TO ASSURE THE BEST INFRASTRUCTURE
  CONDITIONS FOR NEW INVESTMENT PROJECTS
• FOR THE MINING PERSONNEL LAID OFF, WILL BE
  IMPLEMENTED PROGRAMMES, FOR SOCIAL PROTECTION,
  FINANCED BY THE STATE AND BY ATTRACTED EXTERNAL
  SOURCES
• WILL BE ACCELERATED THE ACTIONS FOR PRIVATIZATION
  OF
• - ENERGETICAL COMPLEXES ROVINARI , TURCENI,
  CRAIOVA
• - SC CUPRUMIN ARBUD AND SC MOLDOMIN SA
  MOLDOVA NOUA, MAIN PRODUCERS OF COOPER
  CONCENTRADES
• - SUBUNITS OF NATIONAL COMPANY MINVEST SA
  DEVA
• - LIGNITE OPEN PITS FROM THE STRUCTURE OF
  NATIONAL SOCIETY OLTENIA SA TG. JIU AND
  NATIONAL SOCIETY PLOIESTI
• - SUBUNITS OF NATIONAL SALT SOCIETY.