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Cunico Resources operations in Macedonia & Kosovo, links with Gabriel Resources-Romania Rosia Montana

The mining tycoons behind the controversial Rosia Montana gold project in Romania have run other operations in the region for years now, and many locals warn that their presence has been deadly.

When the red dust rises and collects over Kavadarci in a thick cloud, some say the city looks like Mars. Residents brush copper-colored ash from windshields and windows, and breathe air that leaves a metallic taste on the tongue.

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They know the caustic plumes come from the FENI industries ferronickel plant, located in this city of about 30,000 in south-central Macedonia. But the facility’s operators won’t acknowledge it. One man who asked the plant’s management about the strange dust was told it was harmless Saharan sand, carried over from Africa by a strong northerly wind.

But as the man told the major Macedonian media outlet Nova, invoking the names of two nearby towns, “Africa is not Negotin or Kamen Do.”

Other residents of Kavadarci aren’t entirely convinced the plant is safe either — not with so many new cases of respiratory disease or cancer, especially among the children. But the plant’s Amsterdam-based owner, Cunico Resources, is notoriously secretive, and doesn’t like to answer questions. My own attempts to reach the company’s marketing offices in Dubai were unsuccessful.

Cunico Resources acquired FENI industries in 2005, and another ferronickel mining and smelting complex in Kosovo, NewCo Ferronikeli, in 2006. According to the company’s website, Cunico Resources “came about as a joint venture between Beny Steinmetz Group Resources (BSGR) and International Mineral Resources (IMR).” (BSGR is registered in the tax-avoidance island of Guernsey.)

Right now, Beny Steinmetz is trying to gain an even stronger hold on the region’s resources through his investment subsidiary, BSG Capital Markets. The Israeli tycoon, who owns a private jet and a small fleet of mega-yachts, is one of the major shareholders in Gabriel Resources, the company that’s been prompting thousands of people in Romania to take to the streets in demonstrations against the Rosia Montana gold project, in what have been called “the largest protests in the country’s post-communist history”.

The three largest shareholders in Gabriel Resources (as of September 19th) are BSG Capital Markets, Electrum Global Holdings and hedge fund Paulson & Co. Each owns a 16 percent stake in the company, which is more than the Newmont Mining Corporation — the only gold company on the S&P 500.

For nearly 15 years, Gabriel Resources has been angling for permission to access and exploit Europe’s largest untapped gold reserve in the green mountains of Transylvania, which it plans to do by literally moving mountains, razing the village of Rosia Montana, digging up its dead, and mixing the earth’s ore with cyanide.

Gabriel Resources says it will build “a state-of-the-art mine using the best available techniques and implementing the highest environmental standards whilst preserving local and national cultural heritage.” But Romanians aren’t buying it. They’re concerned the gold mine will pose a major threat to both the environment and human health. They fear the billionaires behind such an enormous operation won’t answer to local people or be held sufficiently accountable when problems arise. And looking at the other facilities operated by companies bearing Beny Steinmetz’s name around the region, their fears don’t appear entirely misplaced.

Cunico Resources is currently the largest ferronickel producer in Europe, and FENI industries in Kavadarci operates the biggest electric furnace of its kind in the world. When Cunico Resources acquired the plant, its output was just 5,000 tons of nickel per year. Now that operations have been ramped up, the plant’s annual nickel production capacity exceeds 22,000 tons. Ferronickel is primarily used to make stainless steel, which is fashioned into the gleaming cutlery, cookware, and fixtures found in high-end kitchens around the world.

But all that nickel output, it seems, may have come at a price. This summer, Nova reported that between 2011 and 2012, the number of cancer diagnoses in Kavadarci and the surrounding villages rose significantly, from 981 to 1,332. According to the local medical clinic, pediatric cancers are also on the rise. Last year, there were 17 children under the age of six diagnosed with cancer.

While it’s impossible to ascertain just how many cancer cases can be attributed to the presence of the FENI plant, environmental groups like Eco Life say there’s no question that a correlation exists. Roberto Parizov, who works for the organization, explained, “We have an increased presence of heavy metals in the air, water, soil. It is a public secret that nobody wants to tell. We have an increased concentration of oncology patients from Kavadarci. These are facts from the field.”

Some independent inquiries seem to support the ecologists’ claims. Scientists from Skopje tested the level of air pollution in Kavadarci by collecting moss samples from the surrounding area. The results were troubling: The median value of nickel found in moss from Kavadarci was about 15 times higher than in Macedonia as a whole. The report concluded: “This fact confirms the influence of the air pollution with dust from the ferronickel plant in the larger region of city of Kavadarci.” Meanwhile, representatives of the plant insist the levels of air pollution in the area are normal.

The average monthly salary of a FENI factory employee is $657, which is high for Macedonia, where the average worker earns just $461 a month. According to Eco Life, this alone is enough to keep many workers quiet.

But even those employed by the mining company cannot be certain they will keep their jobs. Earlier this year, Cunico Resources decided to close its mine in Rzanovo, and 30 workers were laid off. It turns out the company had acquired a new ferronickel mine in Guatemala.

In November 2011, Armend Fejzda fell into an open boiler at the Ferronikeli mining and smelting plant, located just 34 kilometers from Prishtina near the city of Drenas (Glogovac in Serbian). The 24-year-old sustained third-degree burns over most of his body. It took him several days to die.

A few months later, Halim Morina, another Ferronikeli worker, was seriously injured when he fell into the same open boiler. Luckily, the water only reached as high as his waist. While receiving treatment for severe burns in a nearby hospital where he lay paralyzed for three weeks, Morina thought about suing Cunico Resources but decided against it for fear of losing his job. “I did not have the courage to ask for reparations since I was afraid I would be fired,” he told local media. Six months later, he was laid off. Morina, who is in his 50s, was the sole breadwinner in his family of eight. The burns he suffered have so harmed him he can no longer perform the same work that sustained his family for decades.

Though the Beny Steinmetz Group and others who stand to benefit from the Rosia Montana gold project in Romania have stated their commitment “to operate with respect for the safety, health and welfare of its employees and partners in the community”, the city of Drenas has experienced something somewhat different with the Ferronikeli plant. In Kosovo, BSGR and its partner, International Mineral Resources, have run an operation beset by explosions, fires, and dangerous levels of pollution.

Late one evening in June 2011, residents living in and around Drenas were awakened by an explosion so deafening some would later say they believed NATO — which targeted the plant in the Kosovo War in 1999 — was “bombing the town again”. When the smoke cleared, locals learned what had happened: A furnace used in the smelting complex had exploded, injuring five workers and damaging dozens of nearby homes.

The explosion so disturbed area residents that they began protesting against the plant, which employs some 1,000 workers. Demonstrators blocked the entrance to Ferronikeli’s facilities, disrupting production for several days.

But the plant has presented other, quieter dangers to Drenas. In September 2011, the Hydrometeorological Institute of Kosovo released a report indicating that air pollution from the mine and smelting plant was nine times the legal limit, and “posed a serious risk to the health of the population”. The institute’s director, Professor Syle Tahirsylaj, was very candid in expressing his views on the findings. “I would not live in Drenas for all the money in the world,” he said at the time. The report prompted Kosovo’s environmental inspectorate to initiate a lawsuit against Ferronikeli.

Then in October, a Drenas court fined the operators of the plant $54,000 for failing to report “emissions dangerous to the ecosystem of the area”. The ombudsperson’s report for the year concluded that “huge projects of the public and private economic operators…such as Ferronikeli, pollute the environment without any mercy and cause irreparable consequences”.

Meanwhile, the response from most Western observers was predictable in its praise for the mining companies: They applauded the privatization of Ferronikeli and FENI and their new foreign owners while paying little attention to potential local problems like pollution or disease because (presumably) poor people living in countries with high levels of unemployment should be grateful just to have a job earning a few hundred dollars a month.

Unsurprisingly, these are the same attitudes that have been expressed by Western supporters of the proposed Rosia Montana project in Romania: Strict environmental standards and labor rights are for wealthy countries where Priuses are popular, lawyers profit from workplace accidents, and human life has a greater estimated value. Eastern Europe, on the other hand, is the site of the Chernobyl nuclear disaster; a “wasteland of abandoned pits, non-rehabilitated waste dumps, rusting machinery and derelict buildings” — all of the ecological terrors of communist industrialization. As such, it should accept “unlikely” environmental accidents or “remote” health concerns as a minor consequence of being “open for business”.

But of course, BSGR is only one half of Cunico Resources, a company lauded for creating jobs and good corporate social responsibility programs in the Balkans, even as Steinmetz’s dealings — especially as a diamantaire — have become increasingly controversial in Africa. For his mining and metal processing operations in Macedonia and Kosovo, the Israeli tycoon with an eye on Romania is partnered with International Mineral Resources, a Zurich-based subsidiary of the Eurasian Natural Resources Corporation (ENRC), a controversy-causing company in its own right.

ENRC is owned by Alexander Mashkevich, Patokh Chodiev, and Alijan Ibragimov, three multi-billionaire biznesmeni often referred to as “the Troika”. The trio got rich in Kazakhstan before forming ENRC, a company which Forbesjust announced is about to delist from the London Stock Exchange.

Steinmetz’s business partners are a rather colorful bunch: Mashkevich recently spent $20 million at a Daniel Hirst auction at Sotheby’s, and studied literature in his native Kyrgyzstan before entering the world of mining and metals. Meanwhile, Chodiev, who was born in Jizzakh, Uzbekistan, is now the second richest man in Belgium. Ibragimov is a Kyrgyzstan-born Uyghur who lives in London with his six sons, one of whom the British tabloid press has linked to the mysterious 2010 “spy-in-a-bag” death of a 31-year-old M16 codebreaker.

The company’s assets, including its share of Cunico Resources, were frozen in July, as a Dutch court examines allegations that the company engaged in fraud. More recently, it was announced that ENRC is “being investigated by the Serious Fraud Office over claims of fraud, bribery and corruption in Africa.” Steinmetz and BSGR have likewise been accused of a host of misdeeds across the African continent: The president of Guinea even claims the Israeli tycoon and Gabriel Resources shareholder has “played a role” in purposefully fomenting unrest in the country.

Meanwhile, back in Kosovo, former Ferronikeli employees continue to tell their stories. If their testimonies are accurate, Rosia Montana’s potential gold miners (the project is frozen for now due to widespread public opposition in Romania) can get a preview of how one of its major investors operates — and not in Guinea or Guatemala, but in the region, just half a day’s drive away.

Story by balkanist.net

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